ACIT, Ludhiana V. M/s Nahar Capital & Financial Services Ltd., Ludhiana

ITA 1124/CHANDI/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95486 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-08-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 18-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: JAI KARAN SINGH
• Keywords: Business income
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 1124/CHD/2014 ASSESSMENT YEAR: 2011-12 THE ACIT, VS M/S NAHAR CAPITAL & CIRCLE VII, FINANCIAL SERVICES LTD., LUDHIANA. 375, INDL. AREA A, LUDHIANA. PAN: AACCN2866Q & CO 5/CHD/2015 IN ITA NO. 1124/CHD/2014 ASSESSMENT YEAR: 2011-12 M/S NAHAR CAPITAL & VS THE ACIT, FINANCIAL SERVICES LTD., CIRCLE VII, 375, INDL. AREA A, LUDHIANA. LUDHIANA. PAN: AACCN2866Q (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI MANJIT SINGH, DR ASSESSEE BY : SHRI JAI KARAN SINGH DATE OF HEARING : 18.08.2015 DATE OF PRONOUNCEMENT : 21.08.2015 O R D E R PER BHAVNESH SAINI,JM THE DEPARTMENT APPEAL AS WELL AS CROSS OBJECTION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-II LUDHIANA DATED 15.10.2014 FOR ASSES SMENT YEAR 2011-12. 2 2. THE DEPARTMENTAL APPEAL IS FILED ON THE FOLLOWIN G GROUNDS : 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF CA SE THE LD. CIT(A) HAS ERRED IN FOLLOWING THE DECISION OF THE HON' BLE ITAT, CHANDIGARH IN ASSESSEE'S OWN CASE FOR THE A.Y. 2008 -09 WHERE THE ITAT FOLLOWED THE DECISION IN THE CASE OF DCIT VS. IND SWIFT (ORDER DATED 27.07.2012 IN ITA NO. 1120/CHD/2011) WH ICH IS BEFORE THE INSERTION OF RULE 8D. 2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF CA SE THE LD. C1T(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT A FTER INSERTION OF RULE 8D W.E.F. A.Y. 2008-09 THERE IS NO NOTIONAL DIS ALLOWANCE WHEREAS IN THE CASE OF DCIT VS. IND SWIFT LTD. THERE WAS A FINDING OF NOTIONAL DISALLOWANCE. 3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE DECISION OF THE CIT(A) IS IN CONSONANCE WITH THE DECI SION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. GOE TZE (INDIA) LTD. DATED 09.12.2013 IN ITA NO. 1179/2010. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS C ROSS OBJECTION FILED BY THE ASSESSEE AND SEEKS PERMISSIO N TO WITHDRAW THE SAME. THE CROSS OBJECTION OF THE ASSE SSEE IS THEREFORE, DISMISSED AS WITHDRAWN. 4. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET SUBMITTED THAT THE ISSUE IN THE DEPARTMENTAL APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE T RIBUNAL RELATING TO ASSESSMENT YEAR 2010-11 DATED 06.06.201 4 IN ITA 870/2013 IN WHICH DEPARTMENTAL APPEAL ON THE IDENTICAL GROUNDS HAS BEEN DISMISSED. COPY OF THE ORDER IS PLACED ON RECORD WHICH IS ALSO NOT DISPUTED BY T HE LD. DR. 3 5. THE ASSESSEE IS ENGAGED IN BUSINESS OF INVESTMEN TS AND OTHER FINANCIAL ACTIVITIES. THE ASSESSING OFFI CER NOTED THAT ASSESSEE HAD DISALLOWED A SUM OF RS.1,05,62,11 2/- AND RS. 57,69,738/- UNDER SECTION 14A OF THE ACT WH ILE COMPUTING THE BUSINESS INCOME UNDER NORMAL PROVISIO NS WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT RESPECTIVELY. THE ASSESSING OFFICER AFTER RECORDING DETAILED REASONS, MADE DISALLOWANCE UNDER SECTION 1 4A READ WITH RULE 8D. THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D FO R COMPUTING INCOME UNDER NORMAL PROVISIONS AT RS. 1,93,20,946/-. AS THE ASSESSEE HAD HIMSELF DISALLO WED AN AMOUNT OF RS. 1,15,24,217/- IN THE RETURN OF INCOME , ASSESSING OFFICER DISALLOWED THE REMAINING AMOUNT O F RS. 77,96,729/- FOR COMPUTING THE INCOME UNDER NORMAL PROVISIONS. SIMILARLY, FOR COMPUTING THE BOOK PROF IT UNDER SECTION 115JB, THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE UNDER RULE 8D AT RS. 1,86,01,030/-. A S THE ASSESSEE HAD HIMSELF DISALLOWED THE SUM OF RS. 57,69,738/- UNDER SECTION 14A WHILE COMPUTING THE B OOK PROFIT UNDER SECTION 115JB, THE ASSESSING OFFICER DISALLOWED THE REMAINING AMOUNT OF RS. 1,28,31,292/ - FOR COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF TH E ACT. THE ASSESSEE PLEADED BEFORE LD. CIT(APPEALS) THAT I SSUE IS COVERED IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2010-11. THE LD. CIT(APPEALS), FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE IN ASSESSMENT YEAR 4 2010-11 IN ITA 870/2013 DATED 06.06.2014 DELETED TH E DISALLOWANCES MADE BY THE ASSESSING OFFICER. 6. ON CONSIDERATION OF THE ABOVE FACTS AND SUBMISSI ONS OF THE PARTIES, WE FIND THAT ISSUE RAISED IN THE DEPARTMENTAL APPEAL IS COVERED IN FAVOUR OF THE ASS ESSEE BY ORDER OF THE TRIBUNAL IN THE CASE OF THE SAME AS SESSEE FOR ASSESSMENT YEAR 2010-11 DATED 06.06.2011 (SUPRA ) IN WHICH ON IDENTICAL GROUNDS, THE TRIBUNAL DISMISSED THE DEPARTMENTAL APPEAL FOLLOWING THE ORDER OF THE TRIB UNAL IN EARLIER YEARS. 7. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. 8. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST,2015. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAIN I) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST AUGUST,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH