The ACIT, Circle-5, Ahmedabad V. Nirma Chemicals Works Pvt.Ltd., Ahmedabad

ITA 1210/AHD/2012

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1825 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Tax effect
• Section: 268A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD ( CONVENED THROUGH VIRTUAL COURT ) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ITA NO. 1210/AHD/2012 ( / ASSESSMENT YEAR : 2008-09 ) THE ASST.COMMISSIONER OF INCOME TAX CIRCLE-5 AHMEDABAD / VS. NIRMA CHEMICAL WORKS PVT.LTD. NIRMA HOUSE, ASHRAM ROAD AHMEDABAD-380 009 ./ ./ PAN/GIR NO. : AAACN5353L ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S.S. SHUKLA, SR.DR / RESPONDENT BY : SHRI S.N.SOPARKAR, SR.ADV. / DATE OF HEARING 23/02/2021 !'# / DATE OF PRONOUNCEMENT 24 /02/2021 / O R D E R PER BENCH: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)XI, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-X I/96/CIR-5/10-11 DATED 30/03/2012 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 05/05/2010 RELEVANT TO ASSESSMENT YEAR (AY) 2008-09 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO.1210/AHD/2012 ACIT VS. NIRMA CHEMICAL WORKS PVT.LTD. ASST .YEAR - 2008-09 - 2 - 1. THE LD.COMMISSIONER OF INCOME TAX(A) HAS ERRED IN L AW AND ON FACTS IN DELETING THE DISALLOWANCE OF INTEREST EXPE NSES OF RS.1,01,68,026/- U/S.36(1)(III) OF THE I.T.ACT. 2. THE LD.COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE OF POWER PROJ ECT EXPENSES TO THE EXTENT OF RS.33,74,078/-, INSTEAD OF DISALLOWANCE O F RS.56,44,827/- MADE BY THE ASSESSING OFFICER. 3. THE COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER NOT TO MAKE ADJU STMENT OF DISALLOWANCE OF RS.46,26,501/- U/S.14A OF THE ACT, WHILE COMPUTING MAT PROFIT U/S.115JB OF THE ACT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF TH E ASSESSING OFFICER. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C OMMISSIONER OF INCOME TAX (A) MAY BE SET-ASIDE AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 2. BEFORE GOING TO THE MERIT OF THE CASES, THE LD.C OUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT TAX EFFECT ON THE DISPUTED TOTAL ADDITIONS IS BELOW RS.50 LAKHS, THEREFORE, BY VIRTU E OF RECENT CBDT CIRCULAR NO.17 OF 2019 DATED 8.8.2019, DEPARTMENT H AS BEEN INSTRUCTED NOT TO FILE APPEAL BEFORE THE TRIBUNAL WHERE TAX EF FECT IS BELOW RS.50 LAKHS. THIS INSTRUCTION IS APPLICABLE TO THE PENDI NG CASES ALSO. THEREFORE, THE PRESENT APPEAL OF THE REVENUE IS LIA BLE TO BE DISMISSED AT THE THRESHOLD. PER CONTRA, THE LD.DR DID NOT DISP UTE APPLICABILITY OF THE RECENT CBDT CIRCULAR AND ALSO TAX EFFECT BEING BELO W RS.50 LAKHS IN THE ASSESSEE CASE. HE, HOWEVER, LEFT THE ISSUE TO THE TRIBUNAL TO PASS APPROPRIATE ORDER IN THE MATTER. ITA NO.1210/AHD/2012 ACIT VS. NIRMA CHEMICAL WORKS PVT.LTD. ASST .YEAR - 2008-09 - 3 - 3. AFTER HEARING BOTH THE SIDES AND AFTER PERUSAL O F THE ABOVE CBDT INSTRUCTION, WE ARE OF THE VIEW THAT THE PRESENT AP PEAL OF THE REVENUE FALLS WITHIN THE PURVIEW OF THE CBDT INSTRUCTION CI TED (SUPRA). IT IS NOT DISPUTED BY THE REVENUE THAT TAX EFFECT ON THE DISP UTED ADDITION IS LESS THAN RS.50 LAKHS, AND THEREFORE, KEEPING IN VIEW TH E ABOVE CBDT CIRCULAR AND PROVISIONS OF SECTION 268A OF THE INCO ME TAX ACT, WE ARE OF THE VIEW THAT THE PRESENT APPEAL OF THE REVENUE DES ERVES TO BE DISMISSED. IT IS ACCORDINGLY DISMISSED. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICA TION AT THE END OF THE AO IT CAN BE DEMONSTRATED THAT THE TAX EFFECT I S MORE, OR REVENUES CASE FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE T RIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHI N THE TIME PERIOD PRESCRIBED IN THE ACT. IN VIEW OF THE ABOVE, THE A PPEAL OF THE REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D DUE TO LOW TAX EFFECT. THIS ORDER PRONOUNCED IN OPEN COURT ON 24/02/2021 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD; DATED 24/02/2021 &.., .(.. / T.C. NAIR, SR. PS ITA NO.1210/AHD/2012 ACIT VS. NIRMA CHEMICAL WORKS PVT.LTD. ASST .YEAR - 2008-09 - 4 - !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-XI, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 23.2.2021 (AS PER LOW-TAX EFFECT FORMAT) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. OTHER MEMBER23.2.2021 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.24.2.21 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24.2.21 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER