Banpal Oil Chem Pvt.Ltd., Palanpur V. The ACIT, B.K.Circle, Palanpur

ITA 1200/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9376 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 22-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Proportionate interest; Additional evidence
• Section: 14A; 80IB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NOS.69 4 & 1200/AHD/2014 (ASSESSMENT YEAR:2008-09) BANPAL OIL CHEM PVT. LTD., 7 TH FLOOR, POPULAR HOUSE, ASHRAM ROAD, AHMEDABAD - 380009 APPELLANT VS. THE ACIT, BANASKANTHA CIRCLE, PALANPUR RESPONDENT PAN: AAACB8589Q /BY ASSESSEE : SHRI P. B. PARMAR, A.R. /BY REVENUE : SHRI JAMES KURIAN, SR. D.R. /DATE OF HEARING : 10.01.2017 /DATE OF PRONOUNCEMENT : 20.01.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEAR 20 08-09 ARISE AGAINST THE CIT(A)-I, AHMEDABADS DIFFERENT ORDERS DATED 13 .12.2013 & 06.02.2014 IN APPEAL NOS. CIT(A)-I/AC.CIR.-BK-PLN/2013-14 AND CIT(A)-I/AC.CIR.- ITA NOS. 694 & 1200/AHD/2014 (BANPAL OIL CHEM PVT. LTD. VS. ACIT) A.Y. 2008-09 - 2 - BK-PLN/125/2013-14 IN PROCEEDINGS UNDER SECTION 1 43(3) AND SECTION 154 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT RES PECTIVELY. 2. BOTH THE LEARNED REPRESENTATIVES POINT OUT AT TH E OUTSET THAT THE CIT(A)S ORDER IN FORMER APPEAL ITA NO.694/AHD/2014 STANDS RECTIFIED IN HIS SUBSEQUENT ORDER DATED 06.02.2014 FORMING SUBJECT M ATTER OF ADJUDICATION IN LATTER APPEAL ITA NO.1200/AHD/2014. WE THUS TREAT THE SAID LATTER APPEAL AS THE MAIN CASE. 3. A PERUSAL OF THE ASSESSEES LATTER APPEAL HEREIN ABOVE INDICATES THAT THE SAME IS TIME BARRED BY 66 DAYS IN FILING. THE ASSE SSEE-APPELLANT HAS MOVED A CONDONATION PETITION AS WELL PLEADING THEREIN THAT THE CIT(A) HAS PASSED TWO DIFFERENT ORDERS IN THE VERY LOWER APPELLATE CASE C REATING A LOT OF CONFUSION AND COMMUNICATION GAP IN COLLECTING NECESSARY RECOR DS AND BETTING OF THE RELEVANT PAPERS. LEARNED DEPARTMENTAL REPRESENTATI VE FAILS TO CONTROVERT THE SAID SOLEMN AFFIRMATIONS. WE THUS CONDONE THE DELA Y OF 66 DAYS IN FILING OF ITA NO.1200/AHD/2014. THE SAME IS NOW TAKEN UP FOR ADJUDICATION ON MERITS. 4. THE ASSESSEES APPEAL ITA NO.1200/AHD/2014 CONTA INS THREE SUBSTANTIVE GROUNDS INTER ALIA CHALLENGING THE LOWE R APPELLATE ORDER PASSED EX PARTE AFFIRMING ASSESSING OFFICERS ACTION DISALLOW ING / ADDING SECTION 80IB DEDUCTION ON DEPB SALES AMOUNT OF RS.58,80,965/- AN D SECTION 36(1)(III) R.W.S. 14A PROPORTIONATE INTEREST EXPENDITURE DISAL LOWANCE OF RS.27,27,514/-; RESPECTIVELY. 5. WE COME TO THE RELEVANT BASIC FACTS FIRST. THE ASSESSING OFFICER COMPLETED A REGULAR ASSESSMENT IN ASSESSEE COMPANY S CASE ON 31.12.2010 ITA NOS. 694 & 1200/AHD/2014 (BANPAL OIL CHEM PVT. LTD. VS. ACIT) A.Y. 2008-09 - 3 - MAKING THE ABOVE TWO DISALLOWANCES ALONG WITH ANOTH ER HEAD OF INSURANCE EXPENSES OF RS.1,00,00,000/-. THE ASSESSEE PREFERR ED APPEAL. THE CIT(A) DECIDED THE SAME ON 21.05.2012 REMITTING THE ISSUE BACK TO ASSESSING OFFICER TO ONLY TAX THE INCOME COMPONENT ARISING ON SALE OF DEPB INSTEAD OF THE ENTIRE CONSIDERATION MONEY AND TO VERIFY AS TO WHET HER THE ASSESSEE HAD IN FACT UTILIZED INTEREST FREE SUMS IN MAKING THE TAX FREE INVESTMENTS IN QUESTION OR NOT. HE HOWEVER CONFIRMED THE LAST DISALLOWANCE OF INSURANCE EXPENSES. 6. THE ASSESSING OFFICER TOOK UP CONSEQUENTIAL PROC EEDINGS. HE FRAMED THE IMPUGNED CONSEQUENTIAL ASSESSMENT REITERATING H IS EARLIER FINDINGS THEREBY CITING ASSESSEES FAILURE IN PROVIDING ALL NECESSARY DETAILS OF DEPB AND INTEREST FIGURES IN QUESTION. THE CIT(A)S ORD ER UNDER CHALLENGE CONFIRMS THE SAME MAINLY ON THE GROUND THAT THE ASS ESSEE HAD NOT FILED THE REQUISITE DETAILS IN CONSEQUENTIAL PROCEEDINGS. 7. HEARD BOTH SIDES. LEARNED COUNSEL REPRESENTING ASSESSEE FIRST OF ALL INVITES OUR ATTENTION TO ASSESSEES ADDITIONAL EVID ENCE APPLICATION STATING THEREIN THAT ALTHOUGH IT HAD TO FILE THE RELEVANT D ETAILS PERTAINING TO DEPB SALE AMOUNT VIS--VIS PROFIT ELEMENT INVOLVED THEREIN AS WELL AS THOSE RELEVANT TO THE LATTER ISSUE OF SECTION 36(1)(III) INTEREST DIS ALLOWANCE, IT STATES THAT THERE HAD BEEN LOT OF CONFUSION IN COURSE OF THE LOWER AP PELLATE PROCEEDINGS OWING TO WHICH IT COULD NOT PLACE ON RECORD THE SAME BEFO RE THE CIT(A). LEARNED COUNSEL REPRESENTING ASSESSEE THEN INVITES OUR ATTE NTION TO THIS TRIBUNALS ORDER IN FIRST ROUND OF CROSS APPEALS ITA NO.1550 & 1683/AHD/2012 FILED AGAINST CIT(A)S EARLIER ORDER DATED 21.05.2012 (SU PRA). LEARNED COUNSELS CASE IS THAT THIS TRIBUNAL HAS UPHELD CIT(A)S DIRE CTIONS TO THE ASSESSING OFFICER TO TAX ONLY THE INCOME COMPONENT ARISING FR OM DEPB SALE AMOUNT. HE THEN TAKES US TO TRIBUNALS FINDINGS RESTORING T HE LATTER ISSUE OF SECTION ITA NOS. 694 & 1200/AHD/2014 (BANPAL OIL CHEM PVT. LTD. VS. ACIT) A.Y. 2008-09 - 4 - 36(1)(III) INTEREST DISALLOWANCE BACK TO THE ASSESS ING OFFICER FOR AFRESH DECISION. THIS IS FOLLOWED BY CO-ORDINATE BENCH FI NDINGS RESTRICTING INSURANCE DISALLOWANCE SUM OF RS.1,00,00,000/- TO R S.40,00,000/- IN THE NATURE OF KEYMEN INSURANCE PREMIUM. LEARNED COUNSE L ACCORDINGLY STATES THAT THE ASSESSING OFFICER IS ADJUDICATING THE ABOV E ISSUES ONCE AGAIN AS PER TRIBUNALS DIRECTIONS AND IT IS THEREFORE IN LARGER INTEREST OF JUSTICE THAT ITS ADDITIONAL EVIDENCE DESERVES TO BE ADMITTED. LEARN ED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTS THE CIT(A)S ORDER UPHOLDING ASSESSING OFFICERS ACTION FOR THE REASON THAT THE ASSESSEE F AILED TO PRODUCE ALL RELEVANT DETAILS IN CONSEQUENTIAL PROCEEDINGS. 8. WE HAVE HEARD RIVAL SUBMISSIONS. IT HAS ALREADY COME ON RECORD THAT THE ASSESSING OFFICER IS VERY MUCH SEIZED WITH THE ENTIRE MATTER AS PER TRIBUNALS EARLIER DIRECTIONS ISSUED ON 29.08.2016 SO FAR AS ALL THE THREE ISSUES OF DEPB SALE AMOUNT INVOLVING PROFIT ELEMENT, SECTI ON 36(1)(III) INTEREST AMOUNT AND KEYMEN INSURANCE PREMIUM DISALLOWANCE AM OUNT RESTRICTED FROM RS.1,00,00,000/- TO RS.40,00,000/- ONLY IN CON SEQUENTIAL PROCEEDINGS. WE THUS FEEL THAT LARGER INTEREST OF JUSTICE IN CAS E THE ASSESSEES ADDITIONAL EVIDENCE IN THE NATURE OF PROFIT ELEMENT ON SALE OF DEPB ALONGWITH DOCUMENTARY EVIDENCE IN SUPPORT THEREOF IS ADMITTED AND THE ISSUE IS REMITTED BACK TO THE ASSESSING AUTHORITY FOR ADJUDICATION. MORE SO IN VIEW OF THE FACT THAT EVEN THE REVENUE HAS FAILED TO PIN POINT ANY P RIMA FACIE ERROR OR RELEVANCE OF ASSESSEES ADDITIONAL EVIDENCE VIS-A-V IS THE ISSUES INVOLVED BEFORE US. WE ACCORDINGLY ADMIT ASSESSEES ADDITIO NAL EVIDENCE AND DIRECT THE ASSESSING OFFICER TO FRAME CONSEQUENTIAL ASSESS MENT AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE AS SESSEE. ITA NO.1200/AHD/2014 IS ACCEPTED FOR STATISTICAL PURPOS ES. ITA NOS. 694 & 1200/AHD/2014 (BANPAL OIL CHEM PVT. LTD. VS. ACIT) A.Y. 2008-09 - 5 - 9. THE ASSESSEES FORMER APPEAL ITA NO.694/AHD/2014 IS DISMISSED AS RENDERED INFRUCTUOUS AND LATTER APPEAL ITA NO.1200/ AHD/2014 IS ACCEPTED FOR STATISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF JANUARY, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 20/01/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0