TMI Blog2020 (6) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction entered by the assessee seems to be genuine and within the business dealings. It is also relevant to note that as soon as the period given for carrying out due diligence over, Assessee modified the MOU entered and accordingly purchased only those lands which are as per agreement terms and for the balance advanced amount claimed interest @18.5%. AO has calculated the interest from the date of entering the agreement (MOU) and date of payment on 10.10.2007. But, it is natural for the assessee to allow time to the other party to carry out due diligence as per terms of MOU. It is between the parties to decide, how much time to allow in the execution of contract. Therefore, assessee has given time up to 05.04.2008. Beyond that, assessee has claimed penal interest and declared the same in its financial statement in the subsequent assessment year. In our view, the action of the assessee in this transaction is within the business acceptable practices. Therefore, we are inclined to accept the findings of Ld. CIT(A). - Decided against revenue. - I.T.A. No. 3929/Mum/2013 - - - Dated:- 26-6-2020 - SHRI C. N. PRASAD AND SHRI S. RIFAUR RAHMAN, JJ. Appellant by : Shri R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has refuted the same but as the same are not material to the assessment of income, on the facts of the case, the same do not require adjudication in the Income-tax Appeal Proceedings. As the appellant has shown the interest of ₹ 159.39 Crores, received and receivable, in the AY 2009-10, the AO's action to assess not accrued interest @ 12% for the period 09.10.2007 to 31.03.2008, is not valid. The addition of ₹ 97,80,82,190/- is therefore, deleted. 4. Aggrieved with the above order, revenue has preferred the appeal before us on the ground mentioned herein below:- 1. The order of the CIT(A) is opposed to law and facts of the case. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that interest of assessee has accrued for F.Y. 2008-09 ignoring that fact the funds were lent by the assessee to M/s United Ltd. in October 2007 and therefore, interest income was taxable in the previous year 2007-08. 3. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the AO restored. 5. Before us, Ld. DR submitted that assessee had paid to its sister s concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores. It is fact that Unitec Group is subsidiary of TATA Group companies and the group entered into an agreement with Unitec group to acquire the shares and Land in their possession. It had arranged funds through issue of rights shares etc. These funds were made available to the assessee. From the records we notice that it was submitted before CIT(A) that the funds were arranged by TATA sons and no interest bearing funds were utlilized to advance. In order to facilitate the transfer of lands from Unitec Group to the assessee, it was agreed to conduct due diligence and accordingly MOU was entered. We notice that AO observed that these funds were utilized to acquire the UAS License and it is only make to believe transaction. We do not agree with the AO that how the funds were utilized by Unitec group is irrelevant and what is relevant is, whether Unitec held the lands as per MOU on the date of transaction and whether due diligence activities were carried on or not. In the records, we found that there is evidence of existence of above said conditions and no contrary evidence was brought on record by revenue. In our view, the transaction entered by the assessee seems to be genuine an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tribunal in the case of JSW Ltd in ITA Nos. 6264 6103/Mum/2018 dated 14.5.2020, wherein this issue has been addressed in detail allowing time to pronounce the order beyond 90 days from the date of conclusion of hearing by excluding the days for which the lockdown announced by the Government was in force. The relevant observations of this tribunal in the said binding precedent are as under:- 7. However, before we part with the matter, we must deal with one procedural issue as well. While hearing of these appeals was concluded on 7th January 2020, this order thereon is being pronounced today on 14th day of May, 2020, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that rule 34(5) of the Income Tax Appellate Tribunal Rules 1963, which deals with pronouncement of orders, provides as follows: (5) The pronouncement may be in any of the following manners:- (a) The Bench may pronounce the order immediately upon the conclusion of thehearing. (b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date forpronouncement. (c ) In a case where no date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that In case the limitationhas expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown . Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made time- bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly . The extraordinary steps taken suomotu by Hon ble jurisdictional High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily ,inthelightoftheaboveanalysisofthelegalposition, theperiodduringwhich lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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