Shri Shreyans S. Shah, Ahmedabad V. The ACIT.,Cent.Circle-1(3), Ahmedabad

CO 51/AHD/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8427 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIVYANG J SHAH
• Assessee Lawyers: Y P VERMA
• Keywords: Rectification of order
• Section: 143(3); 14A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI A. K. GARODIA, AM AND SHRI KUL BHARAT, JM) ITA NO.2903/AHD/2012 (AY: 2004-2005) ACIT,CENTRAL CIRCLE 1(3), 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD AHMEDABAD. VS SHRI SHREYANSBHAI SHANTILAL SHAH, GUJARAT SAMACHAR BHAVAN, KHANPUR, AHMEDABAD-380001 PAN: AIIPS7279K (APPELLANT) (RESPONDENT) AND C.O. NO.51/AHD/2013 (AY: 2004-2005) SHRI SHREYANSBHAI SHANTILAL SHAH, GUJARAT SAMACHAR BHAVAN, KHANPUR, AHMEDABAD-380001 PAN: AIIPS7279K VS ACIT,CENTRAL CIRCLE 1(3), 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD AHMEDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y.P. VERMA, SR. D.R. RESPONDENT BY SHRI DIVYANG J. SHAH, A.R. DATE OF HEARING: 12.4.2013 DATE OF PRONOUNCEMENT: 26-04-2013 ORDER PER SHRI A. K. GARODIA, A.M. : THIS APPEAL IS FILED BY THE REVENUE AND THE C.O. IS FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST THE ORDER OF LE ARNED CIT(A)-I, AHMEDABAD, DATED 18.10.2012, FOR THE ASSESSMENT YEA R 2004-05. 2. FIRST WE TAKE UP THE C.O. FILED BY THE ASSESSEE. 3. THE GROUND RAISED BY THE ASSESSEE IN C.O. IS ONL Y ONE, WHICH READS AS UNDER: WITHOUT PREJUDICE TO THE BASIS ON WHICH LD. CIT(A) HAS ALLOWED THE APPEAL, IT IS ALSO CONTENDED THAT, AS PER LAW AND FACT OF THE CASE, RULE 8D IS NOT APPLIC ABLE FOR A.Y.2004-05, RATHER SAME IS APPLICABLE FOR A.Y. 2008-09 ONWARDS ONLY, THUS, OTHERWISE ALSO RECTIFICATION ORDER IS OUGHT TO BE QUASHED. 4. IT WAS SUBMITTED BY LEARNED A.R. FOR THE ASSESSE E THAT THE YEAR INVOLVED IN THE PRESENT CASE IS ASSESSMENT YEAR 200 4-05 AND AS PER THE JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN T HE CASE OF GODREJ & BOYCE MFG. CO. LTD VS. DY.CIT (2010) 194 TAXMAN 203 , RULE 8D IS APPLICABLE W.E.F. ASSESSMENT YEAR 2008-09. HE FURTH ER SUBMITTED THAT IN VIEW OF THE AFOREMENTIONED JUDGMENT OF HONBLE BOMB AY HIGH COURT, THE A.O. IS NOT JUSTIFIED IN APPLYING RULE 8D IN THE PR ESENT CASE. 5. THE LEARNED D.R. FOR THE REVENUE HAS SUPPORTED T HE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND FORCE IN THE SUBMISSIONS OF LEARNED A.R. FOR THE ASSESSEE THAT A S PER THE DECISION OF HONBLE BOMBAY HIGH COURT CITED BY HIM, RULE 8D IS NOT APPLICABLE IN THE PRESENT CASE AND HENCE, THIS GROUND OF THE ASSESSEE IN C.O. IS ALLOWED. 7. IN THE RESULT, THE C.O. FILED BY THE ASSESSEE IS ALLOWED. 8. NOW, WE TAKE UP THE APPEAL FILED BY THE REVENUE. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1) THE LD.CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ISSUE OF APPLICABILITY OF RULE 8D OF THE I .T .RULES FOR A.Y. 2004-05 IS A DEBATABLE ISSUE AND, THEREFORE, A CTION U/S 154 OF THE ACT CANNOT BE TAKEN. 2) THE LD.CIT (A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING THE AO TO DELETE THE DISALLOWANCE OF RS.37,49,218/- MADE U/S 14A READ WITH RULE 8D OF THE I.T. RULES. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT{A) OUGHT TO HAVE UPHELD THE ORDER OF T HE A.O., AS THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF RUL E 8D TO WORK OUT THE CORRECT DISALLOWANCE U/S 14A OF THE AC T. 4) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE THAT OF THE AO BE RESTORED TO THE ABOVE E XTENT. 9. LEARNED D.R. FOR THE REVENUE HAS SUPPORTED THE O RDER PASSED BY THE A.O. UNDER SECTION 154 OF THE I.T. ACT WHEREAS LEARNED A.R. FOR THE ASSESSEE HAS SUPPORTED THE ORDER OF THE LEARNED CIT (A). HE HAS ALSO SUBMITTED THAT AS PER THE DECISION OF HONBLE BOMBA Y HIGH COURT RENDERED IN THE CASE GODREJ & BOYCE MFG. CO. LTD. (SUPRA), ALTHOUGH RULE 8D IS NOT APPLICABLE BUT REASONABLE DISALLOWAN CE CAN BE MADE BY THE A.O. HE FURTHER SUBMITTED THAT IN THE ORIGINAL ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) DATED 29.12.2006, DISALLOWAN CE HAS BEEN MADE BY THE A.O. TO THE EXTENT OF RS.8 LAC AND THEREFORE, F URTHER ADDITION MADE BY THE A.O. AS PER THIS ORDER PASSED BY HIM UNDER SECT ION 154 OF THE I.T. ACT IS NOT JUSTIFIED. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 11. WE FIND THAT IN THE IMPUGNED ORDER PASSED BY TH E A.O. UNDER SECTION 154 OF THE I.T. ACT, IT IS NOTED BY HIM THA T RS.8 LAC DISALLOWANCE WAS MADE IN THE ASSESSMENT ORDER UNDER SECTION 143( 3) OF THE I.T. ACT DATED 29.12.2006. 12. NEITHER LEARNED D.R. FOR THE REVENUE NOR THE A. O. IN HIS ORDER PASSED UNDER SECTION 154 OF THE I.T ACT COULD ESTAB LISH THAT SUCH DISALLOWANCE MADE BY THE A.O. OF RS. 8 LAC IN THE O RIGINAL ASSESSMENT ORDER PASSED IN THE YEAR 2006 WAS NOT A REASONABLE DISALLOWANCE. IN THE FACTS OF THE PRESENT CASE, THE ADDITIONAL DISALLOWA NCE MADE BY THE A.O. AS PER THE ORDER PASSED BY HIM UNDER SECTION 154 OF TH E I.T. ACT BY INVOKING RULE 8D IS NOT VALID AS PER THE JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. (SUPRA) BECAUSE AS PER THIS JUDGMENT, RULE 8D IS NOT APPLICABLE IN THIS YEAR AND HENCE, W E FIND THAT THERE IS NO MERIT IN FURTHER ADDITION MAD E BY THE A.O. UNDER SECTION 14A IN THIS YEAR AS PER ORDER PASSED BY HIM UNDER SECTION 154 OF THE I.T. ACT. WE, THEREFORE, DECLINE TO INTERFERE I N THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 14. IN COMBINED RESULT, THE APPEAL OF THE REVENUE I S DISMISSED AND THE C.O. FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON CAPTION PAGE. SD- SD/- (KUL BHARAT) JUDICIAL MEMBER (A.K. GARODIA) ACCOUNTANT MEMBER TRUE COPY PRABHAT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, AHMEDABAD