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IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "D", MUMBAI
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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,
Borivali,
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/-"
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ITA No.38/Mum/2011
AY:2007-08
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
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ITA No.38/Mum/2011
AY:2007-08
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
SA
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
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ITA No.38/Mum/2011
AY:2007-08
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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