TaxTMI 
TaxTMI 
2021 (6) TMI 892
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....sed the order u/s. 143(3) on 28.11.2006 wherein assessed income Rs. 756,14,140/-. That the assessee Company has worked for HSCL in Libya in 1984. That due to some dispute the assessee company has approached the Arbitrators and the original Arbitration Award was passed on 28.11.1998 wherein the Ld. Arbitrators have awarded amounting to 2250000 Libyn Dinar. That the Decree was passed on 20.6.2005 which was modified on 31.8.2005 and as per the modified Decree the assessee Company was awarded interest from 28.11.1998 to 19.6.2005 amounting to Rs. 9,17,67,244/-. That against the said Decree HSCL went to the Hon'ble Calcutta High Court and the assessee Company was awarded further interest from 20.6.2005 to 31.3.2008 amounting to Rs. 1,40,57,779/-. The total interest awarded to the assessee Company Rs. 10,58,25,023/-. The Hon'ble Calcutta High court has passed the order on 17.4.2008 wherein they have asked HSCL to pay Rs. 1.5 crore from the month of May, 2008 in twelve equal instalment, totalling at Rs. 18,50,00,000/-. The assessee Company has offered Rs. 7,78,13,692/- in the Profit & Loss a/c. The assessee has not offered interest income on Arbitration ....
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....d to the reasons of reopening and the findings of the ld. CIT(A) in his order dated 20.07.2016 for the AY 2009-10 and submitted that the reopening of these assessments based on the directions of the ld. CIT(A) is bad in law. For this proposition, he relied on the judgement of the jurisdictional High Court in the case of R.H. Dave vs. Commissioner of Income-Tax reported in 140 ITR 1035 Cal. He further relied on the decision of the Kolkata 'D' Bench of the Tribunal in the case of Shalini Agarwal vs. ITO, Ward-45(4), Kolkata in ITA No. 957/Kol/2017 and submitted that the decision of the Honourable Kolkata High Court has been applied by these Bench of the Tribunal. He further relied on the decision of the Kolkata 'C' Bench of the Tribunal in ITO, Ward-1(2), Kolkata vs. Sri Biswajit Chatterjee in ITA No. 565/Kol/2013. He prayed for relief. 4. The ld. D/R on the other hand relied on the order of the AO as well as the ld. CIT(A) and submitted that the reopening of the assessments is valid and has to be upheld. He referred to page-9 of the order of the ld. CIT(A) and relied on the same. He submitted that the order of the AO as confirmed by the ld. CIT(A) has to be upheld....
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....utside the period from which the amendment to section 145A was effective, the same was to be dealt with on merits. According to the A.O. the assessee's claim to receive principal and interest had accrued only when the favourable Court verdict was delivered on 17.04.2008 and the assessee could not have accounted for receipt of interest prior to the Court verdict because the right to receive interest came into being only with passing of the Court order. The A.O. further stated that interest was not an item of compensation for the period 28.11.1998 to 31.03.2008, i.e., for the period of delay in payment from the date when the original Award was awarded nor was it in consideration for the work done by the assessee. Payment of interest was provided by the Court on account of delay in payment of compensation by HSCL. Therefore, he was of the view that the interest income got crystallized in the hands of the assessee only during the year under appeal, hence, that amount also was taxable in the year under appeal. According to the A.O., the facts of the present case are totally distinguishable from the decision of the cases of Rama Bai Vs. CIT (supra) and C.I.T. Vs. TNK Gobinda....
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.... "This amendment has been made applicable with effect from 1st April, 2010, and will accordingly apply in relation to assessment year 2010-11 and subsequent assessment years." Following the above referred to judgements as well as the amendment of Sec. 145A and the CBDT's Circular, it is amply clear that the interest on delayed payment of Arbitration Award amount cannot be assessed to income-tax in one lump-sum in the year under appeal in which the same was received, rather it is to be assessed in the respective years in which the same had accrued. Hence, the A.O. is directed to delete the addition of Rs. 10,58,25,030/- made by him. Grounds No. 2, 3 and 4 are, thus, allowed." 6.2. We do not find any directions in this order of the ld. CIT(A). Only the issue of year of taxability of interest income was decided. 6.3. The issue is whether the reopening of assessments for both the assessment years is legally valid on the facts and circumstances of the case, based on the deletion of an addition of Rs. 10,58,25,030/- by the ld. CIT(A) in this order for the AY 2009-10. There was no direction in this order of the ld. CIT(A). The reasons for reopening are based o....
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....to A. Here, we have noticed the language of Clause (a) of Sub-section (1) of Section 251, which empowers the AAC to set aside the assessment and refer the case back to the ITO for making a fresh assessment in accordance with the direction given by the AAC. This power must be limited to the assessment year in question. In view of the categorical ratio of the Supreme Court in the aforesaid decision, in our opinion, the Tribunal having already held that the AAC had no jurisdiction to direct the ITO to bring the amount to tax in the correct assessment year, the Tribunal was in error in declining to delete the direction, because the ITO, according to the Tribunal, had the same power under Section 153(3) of the Act. Whether the AAC has the power under that section is another matter but if the authority holds that the AAC had no jurisdiction to come to a finding that the income could be taxed in a particular year, then whether that amount could be brought to tax by resort to some other provisions, irrespective of the finding of the AAC is, in our opinion, irrelevant. In that view of the matter, we are of the opinion, that the Tribunal was in error in coming to t....
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.... Bench of the Tribunal held as follows: "11. Now the Revenue has agitated before us that Ld. CIT(A) erred in not giving direction to reopen the case of earlier years of the assessee in which investments were made. In this regard, we find that Ld. CIT(A) has been given power u/s. 251 of the Act to confirm the order of AO reduce, enhance or annul assessment order under the provision of Act there is no power available to Ld. CIT(A) to give direction to AO for reopening the case of other years. The Income Tax Act provides different schemes wherein the AO is empowered to assess or re-assess the income which has escaped assessment. So at the most, if the Revenue wishes to tax the escapement of income then it has followed the scheme provided under the Act. The relevant provisions for taxing the escape income are given u/s. 147/263 of the Act. In holding so, we find support and guidance from the judgment of Hon'ble Supreme Court in the case of ITO vs. Murlidhar Bhaghubabu reported in 52 ITR 335 (SC). The relevant extract of the judgment is reproduced below:- "Section 33(4) of 1922 Act only refers to a finding or direction made by an appellate authority and does not it....