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Radial Tele Solutions P Ltd. A/1, Gr. Floor, Ramdev Park, Chandavarkar Road, Borivali, Mumbai- 400 013 Vs. The ACIT (OSD) 2(3), Mumbai
October, 31st 2014
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                 MUMBAI BENCHES "D", MUMBAI

     [^ .. , Ú¢,  ^ .. ,                        
     Before Shri H L Karwa, President, & Shri B R Baskaran, AM

                   ./ITA No.38/Mum/2011
              ( [ [ / Assessment Year : 2007-08)

     Radial Tele Solutions P Ltd.       Vs.    The ACIT (OSD) 2(3),
     A/1, Gr. Floor, Ramdev                    Mumbai
     Park, Chandavarkar Road,
     Mumbai- 400 013
     PAN AABCR5295A
         ( /Appellant)                             (× / Respondent)

            Appellant by         :      Dr. K Shivaram
            Respondent by        :      Shri Neil Philip

     Date of Hearing : 30.10.2014             Date of Pronouncement : 30.10.2014

                                  / O R D E R

Per H L Karwa, President :
      This appeal filed by the assessee is directed against the order of the CIT(A)-6,
Mumbai, dated 16.11.2010, for the assessment year 2007-08.

2.    In this appeal the assessee has raised the following grounds:

      "1.    On the facts and in the circumstances of the case and in law the
      learned Commissioner of Income Tax (Appeal) erred in confirming the
      addition of Rs. 67,36,309/- u/s. 40(a)(ia) of the Income Tax Act, 1961,
      made by the assessing officer.

      2.     On the facts and in the circumstances of the case and in law the
      learned Commissioner of Income Tax (Appeal) erred in confirming
      disallowing interest expenditure of Rs.93,32,011/-"
                                                                     ITA No.38/Mum/2011

Shri Umesh Kantharia, Director of the assessee company, vide his letter dated
29.10.2014 submitted a brief note, which reads as under:

      "1.    A search and seizure action u/s. 132 of the Income tax Act,
      1961 was carried out in the case of M/s. Global Telesystem Limited
      Group, its group concerns etc on 28/09/2010. During the course of
      search action, documents belonging to assessee company were found
      and seized and as such the case was covered under the provisions of
      section 153C of the Act and notices were issued and returns were filed
      pursuant thereto.

      2.    The Assessment years covered under the provisions of S 153C
      01 the Act are from A.Y. 2005-06 to A.Y. 2010-2011 and A.Y. 2011-
      2012 being the assessment relevant to the search year.

      3.    Assessee filed the settlement Application for A.Y. 2005-06 to
      A.Y. 2012-2013 on 26/3/2013. Besides the Assessee, 5 other
      companies related to GTL had also filed Settlement Application.

      4.     Vide order dated 8/4/2013 passed u/s. 245D(1), Assessee's
      Settlement Application was admitted and allowed to be proceeded
      further. Vide order dated 23/5/2013 passed u/s. 245B(2C) it was held
      that the Settlement Application of the Assessee was not invalid and the
      Application was allowed to be proceeded further.

      5.     The matter with respect to financial expenses namely
      discounting charges, processing charges and interest was raised by the
      commissioner in his report under Rule 9. Assessee had responded to
      the objections of the commissioner in its reply under Rule 9A giving
      details of the financial expenses. Hereto enclosed as Annexure "A" is
      the copy of Report of the Commissioner under order Rule 9 and
      Annexure "B" is the copy of Reply of Asses see order Rule 9A.

      6.     Under Section 245D(4) of the Income Tax the Settlement
      Commission passes final order on the matters covered by the
      application as well as any other matter relating to the case riot covered
      by the application but referred to in the report of the Commissioner

      7.      The Settlement Commission in its final order u/s. 245D(4) after
      considering the Report of Commissioner and reply of the assessee
      accepted the income returned by Assessee for A.Y. 2007-08 in its
      Settlement Application. Hereto enclosed as Annexure "C" is the copy of
      tile order of Settlement Commissioner passed u/s. 245D(4).

      8.     As per section 245-1 of the Income Tax Act, the order of the
      Settlement Commission passed u/s. 245D(4) shall be conclusive as to
      the matters stated therein. Further as per section 245F(4) only matters
      not before Settlement Commission remain unaffected by the final order
                                                                      ITA No.38/Mum/2011

       of Settlement Commission passed u/s. 245D(4).

       9.      In the facts of the present case, the issue of Financial Expenses
       were raised by the Commissioner in its report under Rule 9 and hence,
       the income assessed by the Settlement Commission for the A.Y. 2007-
       08 is final. The A.O. has also accepted the same by passing order
       giving effect u/s. 245D(6). Hereto enclosed as Annexure "D" is the
       copy of the order passed u/s. 245D(6). The learned CIT(A) had passed
       the order on 16/11/2010 i.e., before the order of the Settlement
       Commission and hence the learned CIT(A) had no occasion to go
       through the same. Ground No. 1 & 2 raised in the present appeal is
       thus covered by the order of the Settlement Commission. Hence, for
       A.Y. 2007-08 the impugned order of CIT(A) and A.O. has become a
       nullity in view of the final order of the Settlement Commission and the
       consequential order of A.O. passed u/s. 245D(6)."

3.     In view of the above submissions and also after hearing the learned DR at
length, we hold that the issues raised vide ground nos. 1 & 2 of the present appeal
are covered by the order of the Settlement Commission. Hence, the impugned order
for A.Y. 2007-08 will not survive.

4.     The appeal is disposed of in the manner stated hereinabove.

       Order pronounced in the open court on this 30th day of October, 2014.

                   Sd/-                                           Sd/-
             (B R Baskaran)                                  (H L Karwa)
          ACCOUNTANT MEMBER                                  PRESIDENT

MUMBAI, Dt : 30th October, 2014
Copy forwarded to :
   1. The Appellant
   2. The Respondent
   3. The C.I.T, concerned
   4. The CIT (A)-concerned
   5. The DR, Mumbai "D" Bench
                                                        BY ORDER

             //True Copy//

                                                 ASSISTANT REGISTRAR
                                              ITAT, Mumbai Benches, Mumbai
                                                                        ITA No.38/Mum/2011

Sr.No.   Details                                            Date   Initials   Designation
1        Draft dictated on                                                    Sr.PS/PS
2        Draft Placed before author                                           Sr.PS/PS
3        Draft proposed & placed before the Second Member                     JM/AM
4        Draft discussed/approved by Second Member                            JM/AM
5        Approved Draft comes to the Sr.PS/PS                                 Sr.PS/PS
6        Kept for pronouncement on                                            Sr.PS/PS
7        File sent to the Bench Clerk                                         Sr.PS/PS
8        Date on which the file goes to the Head clerk
9        Date on which file goes to the AR
10       Date of Dispatch of order
11       Draft dictation sheets is enclosed
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