DCIT, CIRCLE - 2 (1), TRICHY STATIONED AT THANJAVUR V. M/S. CITY UNION BANK, KUMBAKONAM

MA 78/CHNY/2024

AI Insights

The case involves the Assistant Commissioner of Income Tax, Circle 2(1), Trichy as the applicant and M/s. City Union Bank as the respondent. The Revenue filed miscellaneous applications seeking rectification of a common order dated 11.03.2024, which mistakenly directed the deletion of additions made towards the disallowance of QIP expenses for the assessment years 2016-17 and 2017-18. The Tribunal acknowledged the error and corrected the directive to require verification of the QIP expenses by the Assessing Officer, aligning it with the decision made for the assessment year 2015-16.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107076 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-11-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 20-09-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R. LALITHA

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ᮰ी एबी टी. वक᳹, ᭠याियक सद᭭य एवं ᮰ी एस.आर .रघुनाथा, लेखा सद᭭य के समᭃ BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER िविवध यािचका सं / M.A. Nos.77 & 78/CHNY/2024 (arising in I.T.A. Nos. 1121/CHNY/2019 & 672/CHNY/2020) िनधाᭅरण वषᭅ / Assessment Years : 2016-17 & 2017-18 The Assistant Commissioner of Income Tax, Circle 2(1), Trichy. v. M/s. City Union Bank, 24B, Gandhi Nagar, Kumbakonam. PAN: AAACC 1287E (अपीलाथᱮ / Applicant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से /Applicant by : Smt. Gouthami Manivasagam, JCIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Smt. R. Lalitha, CA (Through virtual mode) सुनवाई कᳱ तारीख/ Date of hearing : 25.10.2024 घोषणा कᳱ तारीख /Date of Pronouncement : 20.11.2024 आदेश /O R D E R PER S.R. RAGHUNATHA, ACCOUNTANT MEMBER: By way of these Miscellaneous Applications, the Revenue has requested for rectification in the common order of the Tribunal dated 11.03.2024 in ITA Nos.1121/CHNY/2019 & 672/CHNY/2020, for the assessment years 2016-17 & 2017-18. 2 M.A Nos.77 & 78/CHNY/2024 2. The Revenue has filed these miscellaneous applications stating that there is a mistake apparent on record in the findings given in its order for the assessment years 2016-17 and 2017-18 as detailed below:- 7. The Honourable ITAT, in its combined order in ITA No 1120/Chny/2019 & 1121/Chny/2019 & & ITA 672/Chny/2020 in page no 89 and Para 23 observed as under: \"The next issue that came up for our consideration from ground no 4 of the assessee appeal is disallowance of QIP expenses of Rs 1,75,43, 308/-. An identical issue has been considered by us in appellant's own case for assessment year 2015-16 in ITA no 1120/Chny/2019. The facts are identical for the year under consideration. The reasons given by us in preceding paragraph no 9 to 9.1 shall mutatis mutandis apply to this appeal, as well. Therefore, for similar reasons, we direct the assessing officer to delete additions made towards disallowance of QIP expenses.” 8. Whereas, the Honourable ITAT in its order for the AY 2015-16 in ITA no 1120/Chny/2019, in page no 28 of Para no 9.1, has arbitrated the issue of expenses claimed towards issue of shares under QIP as under: \"Therefore, we are of the considered view that the matter needs to go back to the file of the assessing officer to verify the claim of the assessee, in light of amount spent towards extension of existing business like setting up new branches, ATMs etc. In case, the appellant is able to prove its argument that the QIP proceeds has been utilized for extension of existing business, then expenditure incurred for QIP is allowable as deduction. The assessing officer is directed to verify the claim and decide the issue in accordance with law.\" 9. It is humbly submitted that on perusing the directions delivered for the asst.year 2015-16, the Honourable ITAT has absolutely and apparently ratified the issue of QIP expenses to be remitted back to the assessing officer for verification of the claim made by the assessee. However, while deciding the same and identical issue for the AY 2016-17, in the operative 3 M.A Nos.77 & 78/CHNY/2024 part of the decision, it has been stated by the Honourble ITAT that the findings for the AY 2015-16 shall mutatis mutandis apply to this appeal, as well, whereas, in the decisive part of the decision, the Honourable ITAT has directed the assessing officer to delete the addition made towards disallowance of QIP expenses, which appears to be quite contradictory as well as in conflict and not in consonance with as well as in consequence of the directions of the ITAT for the AY 2015-16. 10. Moreover, it is pertinent and plausible to construe as well as conclude that the Hon'ble ITAT, in its adjudication made in the asst.year 2016-17, has perspicuously proposed the decision, that belied with the words shall mutatis mutandis apply to this appeal as well which significantly and specifically reiterate the nature of Pari Materia of the issue involved in the asst.years 2015-16 & 2016-17. 2.1 The ld. Senior DR stated that in the above said order of the Tribunal in para 23 at page No. 89, the Tribunal has referred to its decision in ITA No.1120/CHNY/2019 for the assessment year 2015- 16 and stated that the facts are identical for the year under consideration i.e., for the assessment year 2016-17 in ITA No.1121/CHNY/2019 but wrongly mentioned as ‘the AO to delete the additions made towards disallowance of QIP expenses’ instead of remitting back to AO for verification of claim and decide the issue in accordance with law. Similar error has occurred in para 40 at page No.103 of the order in relation to findings given with respect to the issue of disallowance of QIP expenses for the assessment year 2017-18 in ITA No.672/CHNY/2020 and prayed for rectification of 4 M.A Nos.77 & 78/CHNY/2024 the same by rectifying the relevant paras of the order as held in the assessment year 2015-16. 3. The ld.AR fairly accepted the same and consented for rectification. 4. We have gone through the order and the applications filed by the Revenue. We find that for the assessment year 2015-16, the issue of QIP expenses has been decided in para 9.1 at page No.28 as under:- “Therefore, we are of the considered view that the matter needs to go back to the file of the Assessing Officer to verify the claim of the assessee, in light of amount spent towards extension of existing business like setting up new branches, ATMs etc. In case, the appellant is able to prove its argument that the QIP proceeds has been utilized for extension of existing business, then expenditure incurred for QIP is allowable as deduction. The Assessing Officer is directed to verify the claim and decide the issue in accordance with law.” We noted that the same issue has been adjudicated for the assessment years 2016-17 & 2017-18 by stating that the reasoning given in for the assessment year 2015-16 in preceding paragraph nos.9 & 9.1, shall mutatis mutandis apply to these appeals also. However, it has been wrongly mentioned as under:- “Therefore, for similar reasons, we direct the Assessing Officer to delete additions made towards disallowance of QIP expenses.” 5 M.A Nos.77 & 78/CHNY/2024 Instead of the above 2 lines in paras 23 & 40 at page Nos.89 & 103 respectively of the order dated 11.03.2024, it shall be read as “The Assessing Officer is directed to verify the claim and decide the issue in accordance with law.” The mistake is accordingly rectified and in term of the above, the miscellaneous applications of the Revenue are allowed. 5. In the result, the miscellaneous applications of the Revenue are allowed. Order pronounced in the open court on 20th November, 2024 at Chennai. Sd/- Sd/- (एबी टी. वक᳹) (ABY T VARKEY) ᭠याियक सद᭭य /JUDICIAL MEMBER (एस.आर .रघुनाथा) (S.R. RAGHUNATHA) लेखा सद᭭य /ACCOUNTANT MEMBER चे᳖ई/Chennai, ᳰदनांक/Dated, the 20th November, 2024 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Applicant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT, Madurai 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF. "