Mono Steel India Ltd., Bhavnagar V. The DCIT(OSD)-I, Circle-4, Ahmedabad

CO 80/AHD/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3515 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 30-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY MEHTA WITH HARSH BHUTA
• Keywords: Tax effect
• Section: 143(3); 115JB

Judgement Text

ITA NO. 2467/AHD/2014 & CO NO.80/AHD/2017 DCIT VS. MONOSTEEL INDIA LTD ASSESSMENT YEAR: 2011-12 PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] ITA NO. 2467/AHD/2014 & CO NO.80/AHD/2017 ASSESSMENT YEAR: 2011-12 DY. COMMISSIONER OF INCOME-TAX (OSD)-I ..... .............APPELLANT CIRCLE 4, AHMEDABAD VS. MONOSTEEL INDIA LTD ........................RESPONDENT & C/O. VIJAYKUMAR & CO. CROSS OBJECTOR NEAR SAKAR BAZAR, DANAPITH, BHAVNAGAR-364 001 [PAN : AADCM 3137 C] APPEARANCES BY: MUDIT NAGPAL FOR THE APPELLANT VIJAY MEHTA WITH HARSH BHUTA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 06.03.2018 DATE OF PRONOUNCING THE ORDER : 08.03.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THIS APPEAL, FILED BY THE REVENUE, AS ALSO THE C ROSS OBJECTION, FILED BY THE ASSESSEE, ARE DIRECTED AGAINST LEARNED CIT(A)S ORD ER DATED 9 TH JUNE 2014 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE IN COME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2011-12. 2. LEARNED COUNSEL FOR THE ASSESSEE DOES NOT PRESS THE CROSS OBJECTION AND THE CROSS OBJECTION IS, ACCORDINGLY, DISMISSED FOR WANT OF PROSECUTION. 3. IN REVENUES APPEAL, GRIEVANCE IS AS FOLLOWS:- THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION ON ACCOUNT OF APPORTIONMENT OF EXPENDITURE BETWEEN POW ER PLANT AND SPONGE IRON UNIT AMOUNTING TO RS.44,34,722/- WITHOU T APPRECIATING THE FACT THAT THE ASSESSEE HAD APPORTIONED ALL ITS ROUT INE EXPENDITURE LIKE MAINTENANCE, ADMINISTRATION, TRANSPORT, CLEANING ET C. WHICH SHOULD HAVE BEEN SHARED BETWEEN BOTH THE UNITS IN THE HANDS OF THE NON-80IA UNIT WHICH WERE ATTRIBUTED IN ASSESSEES BOOKS ONLY TO T HE SPONGE IRON UNIT. GEOGRAPHICALLY BOTH THE UNITS WERE LOCATED IN THE S AME CAMPUS AND HENCE ALL THE RELATED EXPENSES WERE LIKELY TO BE IN CURRED EVENLY BY BOTH THE UNITS. ITA NO. 2467/AHD/2014 & CO NO.80/AHD/2017 DCIT VS. MONOSTEEL INDIA LTD ASSESSMENT YEAR: 2011-12 PAGE 2 OF 2 4. LEARNED COUNSEL SUBMITS, AS A PRELIMINARY OBJECT ION, THAT AS TAX EFFECT IN THIS APPEAL IS LESS THAN RS.10,00,000, THE SAME SHOULD B E TREATED AS NOT PRESSED IN THE LIGHT OF CBDT CIRCULAR NO.21/2015 DATED 10.12.2015. HE FURTHER POINTS OUT THAT, AS EVIDENT FROM THE ASSESSMENT ORDER ITSELF, THE ASSES SMENT OF INCOME HAS BEEN MADE ON THE BOOK PROFITS UNDER SECTION 115JB. WHILE INCO ME COMPUTED ON THE BASIS OF PROVISIONS OF THE ACT IS RS.2,48,32,823/-, THE BOOK PROFIT UNDER SECTION 115JB IS RS.17,58,88,012/-. HE FURTHER SUBMITS THAT EVEN IF MAT CREDIT IS TO BE TAKEN INTO ACCOUNT, SINCE THE MAT RATE, AT THE RELEVANT POINT OF TIME, WAS ONLY 18%, THE TAX EFFECT, EVEN AFTER TAKING INTO ACCOUNT MAT CREDIT, IS ONLY RS.7,98,250/- WHICH IS LESS THAN RS.10,00,000/-. WE ARE THUS URGED TO DISMISS THE APPEAL AS NON-MAINTAINABLE. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, SUBMITS THAT FOR COMPUTING TAX EFFECT UNDER CBDT CIRCULAR, WHAT IS T O BE TAKEN INTO ACCOUNT IS TAX RATE AS NORMALLY APPLICABLE ON THE ASSESSEE. 5. THE PLEA OF THE LEARNED COUNSEL IS INDEED WELL T AKEN. THE CBDT CIRCULAR DEFINES TAX EFFECT AS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUC H TOTAL INCOME BEEN REDUCED BY THE AMOUNT IN RESPECT OF THE ISSUES AGAINST WHIC H APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS THE DISPUTED ISSUES) . WHAT HAS BEEN ASSESSED IN THIS CASE IS BOOK PROFIT UNDER SECTION 115JB, AND, THERE FORE, IT IS ONLY THE TAX APPLICABLE ON BOOK PROFITS, AS RELATABLE TO THE DISPUTED ISSUE S, WHICH CAN AT BEST BE TAKEN INTO ACCOUNT. SUCH NOTIONAL TAX ON DISPUTED ISSUES IS C LEARLY LESS THAN RS.10,00,000/-. IN THIS VIEW OF THE MATTER, THE APPEAL FILED BY THE AS SESSING OFFICER IS INDEED NOT MAINTAINABLE. WE, THEREFORE, DISMISS THE APPEAL AS NOT MAINTAINABLE. 6. IN THE RESULT, THE APPEAL IS ALSO DISMISSED. 7. IN THE RESULT, THE APPEAL AND CROSS-OBJECTION, B OTH ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 8 TH MARCH, 2018 SD/- SD/- SD/- SD/- RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 8 TH DAY OF MARCH, 2018 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD