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TMI Blog2023 (3) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the order of reassessment under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 3. The CIT (Appeals) went wrong in recording the findings in this regard from para 7.2.1 to 7.2.20 of the impugned order without assigning proper reasons and justification. 4. The CIT (Appeals) erred in sustaining the taxation of monies received from M/s ELNET Technologies Limited in the hands of the appellant without assigning proper reasons and justification. 5. The CIT (Appeals) went wrong in recording the findings in this regard from para 7.3.1 of the impugned order without assigning proper reasons and justification. 6. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 7. The Appellant craves leave to file additional grounds/ arguments at the time of hearing." 2. Ground No. 1 is of general in nature requires no adjudication and accordingly, the same is dismissed. 3. Ground No. 2 & 3 is relating to reopening of assessment under section 147 of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income. Therefore, the Assessing Officer has issued notice under section 148 of the Act as there is an escapement of income from taxation. Before the Assessing Officer, the assessee company has submitted as under: "....M/s. Elnet Technologies Ltd was leased out land for establishing a Software Technology Park for 90 Years. It is a fact that Elnet was accorded permission to pay the Lease deposit in quarterly instalments with an interest rate of 10.50% p.a. As pointed out in our earlier correspondences, the Lease Deposit amount along with interest had been remitted to the Government of Tamil Nadu except the amount receivable from the Income Tax Department by way of refund which was deducted by M/s. Elnet Technologies Ltd. ELCOT was entitled to levy service charges @ 3.5% on the leased amount which had been recognised as income during the years concerned. As such, the interest accrued on the deposits was also shown under "Other Liabilities" Account as we were liable to pay the same to the Government of Tamilnadu. Hence we request you not to include the interest income of Rs.50.01 lakhs to the total income for the assessment year 2001-02." After considering the submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer rightly reopened the assessment under section 147 of the Act. On appeal, the ld. CIT(A) has noted that there is no information that the Assessing Officer has examined either issues in the original assessment order or any questionnaire was issued on the matter or any submission was furnished by the assessee inviting the attention of the Assessing Officer on the issue. The ld. CIT(A) has further observed that no case was made out to show that there was opinion already expressed by the Assessing Officer on the matter which is sought to be reviewed under the reassessment proceedings. He further noted that while hearing took place on 24.04.2017, the AR of the assessee was requested to furnish copy of the questionnaire issued by the Assessing Officer during the course of original assessment proceedings regarding the issue of assessability of interest income, in response to which, on 09.06.2017, when the AR appeared, has stated that such questionnaire could not be produced. Accordingly, the ld. CIT(A) has held that reopening was based on the tangible material and there had been reasons to believe that the income has escaped assessment from taxation and the reopening is in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oof for payment of amounts received from Elnet to Government of Tamil Nadu. The assessee has not filed any of the details before the Assessing Officer. Accordingly, the Assessing Officer added the above amount received from M/s. Elnet Technologies Ltd. as income of the assessee. On appeal, since the assessee has not filed any of the details, the ld. CIT(A) confirmed the addition made by the Assessing Officer. 7.1 Before us, the ld. Counsel for the assessee has submitted that the assessee has received the amount from M/s. Elnet Technologies Ltd. as an intermediary and therefore, it is not correct to say that it is income of the assessee and thus, it cannot be taxed in the hands of the assessee. 7.2 On the other hand, the ld. DR has submitted that the assessee has received the interest amount of Rs..50,01,000/- from M/s. Elnet Technologies Ltd. and paid TDS. Thus, the amount received by the assessee from M/s. Elnet Technologies Ltd. is income of the assessee. He further pointed out that the assessee has not been able to file payment receipt from the Government of Tamil Nadu and therefore, it has to be taxed in the hands of the assessee. 7.3 We have heard both the sides, perused t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Year under consideration without assigning proper reasons and justification and ought to have appreciated that the order of reassessment under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 3. The CIT (Appeals) went wrong in recording the findings in this regard in para 8.1.2 of the impugned order without assigning proper reasons and justification. 4. The CIT (Appeals) erred in confirming the disallowance of depreciation on the property at Nandanam in the computation of taxable total income without assigning proper reasons and justification. 5. The CIT (Appeals) went wrong in recording the findings in this regard in para 8.2.2 of the impugned order without assigning proper reasons and justification. 6. The CIT (Appeals) erred in sustaining the taxation of monies received from M/s ELNET Technologies Limited in the hands of the appellant without assigning proper reasons and justification. 7. The CIT (Appeals) went wrong in recording the findings in this regard in para 8.3 of the impugned order without assigning proper reasons and justification. 8. The CIT (Appeals) failed to appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng into the guideline value of the land as on 03.01.2006 which was Rs..811/- per sq. ft. The total undivided share of land is 3463 sq. ft. and accordingly by applying the rate of Rs..811/- per sq. ft., the value of the land was arrived at Rs..28,08,493/-. The depreciation claimed at the rate of 10%^ on the land worked out to Rs..2,80,849/- was withdrawn in the assessment year 2006- 07. Since similar depreciation on undivided share of land is claimed by the assessee for the assessment year 2003-04, the Assessing Officer has reopened the assessment under section 147 of the Act. Against the notice issued by the Assessing Officer under section 148 of the Act, the assessee has not filed the return of income. However, the assessee made submissions by filing a letter dated 27.10.2010 before the Assessing Officer. After considering the submissions of the assessee, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 147 of the Act dated 27.10.2010 by disallowing the depreciation claimed of Rs..2,80,850/- and brought to tax. 11. The assessee carried the matter in appeal before the ld. CIT(A) and submitted that the Assessing Officer reopened the assessment without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. We have gone through the assessment order and also appellate order and find that the Assessing Officer has perfectly decided the issue and the ld. CIT(A) has confirmed the same. We find no infirmity in the order passed by the ld. CIT(A). Accordingly, ground Nos. 4 & 5 raised by the assessee are dismissed. 15. Ground Nos. 6, 7 & 8 raised by the assessee relates to interest income received from M/s. Elnet Technologies Limited. Similar issue has been raised by the assessee in the assessment year 2001-02 in I.T.A. No. 2429/Chny/2017 and adjudicated hereinabove from para 7 to 7.3 and our findings are mutatis mutandis applies to these grounds of appeal raised in the assessment year 2003-04 as well. Accordingly, the ground Nos. 6, 7 & 8 are dismissed. 16. Ground No. 9 raised by the assessee relates to confirmation of addition of Rs..19,86,480/-. In the assessment order, during the course of reassessment proceedings, the Assessing Officer has noted from the Accounts - significant Accounting Policies 3.01.L(ii) that Rs..19,86,480/- being the interest on term loan due from Joint Venture Companies for the current year have not been included in the Profit & Loss account. As judicially h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is only in those circumstances that the interest income is not taxable. It is not correct to hold that the monies advanced are not recoverable on the basis of how other financing institutions who also lent monies to those companies treated such loans in their books of account. Just because others treated such loans as NPA, the assessee also giving the same treatment without undertaking independent worthiness of the lendee will not support the contention that such monies advanced are not recoverable. Thus, by holding that as long as the loan is subsisting, the interest which is due on such loans on accrual basis must be brought to tax, the ld. CIT(A) has confirmed the addition made by the Assessing Officer. 18. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. The arguments of the ld. Counsel for the assessee is that the interest income is not recoverable from the joint venture companies on the ground that the debt is already bad. In the assessment order, the Assessing Officer has noted that the assessee has not written off the loans in its books of account and the same figure is continuing even in subs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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