ACIT, Ludhiana V. M/s Nahar Capital and Financial Service Ltd., Ludhiana

ITA 1353/CHANDI/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2319 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: JAI KARAN SINGH
• Section: 143(3); 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1353 /CHD/2012 (ASSESSMENT YEAR : 2009-10) THE A.C.I.T., VS. NAHAR CAPITAL & FINANCIAL SERV ICE LTD., CIRCLE VII, 375, INDUSTRIAL AREA A, LUDHIANA. LUDHIANA. PAN: AACCN2866Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K.SAINI, DR RESPONDENT BY : SHRI JAI KARAN SINGH DATE OF HEARING : 09.04.2013 DATE OF PRONOUNCEMENT : 16.04.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA DA TED 03.10.2012 RELATING TO ASSESSMENT YEAR 2009-10 AGAINST THE ORD ER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. WHETHER THE CIT(A) IS CORRECT ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN ALLOWING THE APPEAL OF THE ASSESSEE BY MENTIONING THAT CALCU LATION MADE BY THE ASSESSEE FOR DISALLOWING EXPENSE U/S 14A FOR CALCULATION OF BOOK PROFIT FOR DEEMED TOTAL INCOME U/S 115JB HAS TO BE TAKEN AS SUCH AND NO CHANGE CAN BE IN IT BY THE AO. 2. WHETHER ON THE FACT & CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS IGNORED THE LATEST DECISION OF HON'BLE ITAT, MUMBAI IN ITA NO. 5428/MUM/2007 IN THE CASE OF GEETANJALI TRADING LTD. VS. THE INCOME TAX OFFICER, 6(3) (1), MUMBAI AND ALSO IN ITA NO, 5688/MUM/2012 DATED 29.08.2012 IN THE CASE OF ESQUIRE P.LTD, MUMBAI VS. ASSESSEE (COPIES ENCLOSED). 3. WHETHER ON THE FACT & CIRCUMSTANCES OF THE CASE, THE CIT(A) SHOULD HAVE FOLLOWED LATER DECISIONS OF HON'BLE ITAT, MUMBAI AS MENTIONED IN GROUND NO. 2. 2 4. WHETHER ON THE FACT & CIRCUMSTANCES OF THE CASE, THE MATTER NEEDS TO BE REFERRED TO HON'BLE SPECIAL BENCH AS THERE ARE CONFLICTING DECI SIONS OF HON'BLE ITAT AND THERE IS NO DECISION OF HON'BLE JURISDICTIONAL HIGH COURT. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 3. THE LEARNED D.R. FOR THE REVENUE FAIRLY ADMITTED THAT THOUGH THE ISSUE HAD BEEN DECIDED IN THE CASE OF THE ASSESSEE ITSELF IN THE PRECEDING YEAR, SIMILAR ISSUE WAS DECIDED BY THE MUMBAI BENCH OF THE TRIBUNAL IN ITA NO. 5428/MUM/2007 IN THE CASE OF GEETANJALI TRA DING LTD. VS. THE INCOME TAX OFFICER, 6(3) (1), MUMBAI AND THE CIT (A PPEALS) SHOULD HAVE FOLLOWED LATER DECISION OF THE TRIBUNAL IN GRO UND NO.2. ANOTHER PLEA WAS RAISED BY THE ASSESSEE THAT THE MATTER MAY BE REFERRED TO THE SPECIAL BENCH AS THERE WERE CONFLICTING DECISIONS. 4. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT IDENTICAL ISSUE ARISING IN THE PRESENT APPEAL HAS BEEN ADJUDICATED UPON BY THE TRIBUNAL IN TURN FOLLOWING AN EARLIER DECISION OF THE CHANDI GARH BENCH OF THE TRIBUNAL AND THERE IS NO MERIT IN THE PRESENT APPEA L FILED BY THE REVENUE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED ON MERITS IN THE PRESENT APPEAL IS IN RELATION TO COMPUTATION OF BOOK PROFITS UNDER SECTION 115JB OF THE ACT. TH E ASSESSING OFFICER WHILE COMPUTING THE SAID BOOK PROFIT IN THE HANDS O F THE ASSESSEE HAD ADDED BACK THE DISALLOWANCE WORKED OUT UNDER SECTIO N 14A OF THE ACT TO THE NET PROFITS OF THE BUSINESS AND THEREAFTER COMP UTED THE TAX LIABILITY. THE ASSESSEE WAS AGGRIEVED BY SUCH RECOMPUTATION OF BOOK PROFITS AND THE CIT (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE RATIO LAID DOWN BY THE TRIBUNAL IN ASSESSEES OWN CASE RE LATING TO ASSESSMENT YEAR 2008-09. WE FIND THAT IDENTICAL ISSUE OF COMP UTATION OF BOOK PROFITS UNDER SECTION 115JB OF THE ACT AND THE EFFE CT OF DISALLOWANCE 3 UNDER SECTION 14A ON THE PROFITS OF BUSINESS AROSE BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 200 8-09 IN ITA NO.1120/CHD/2011. THE TRIBUNAL VIDE ORDER DATED 27 .7.2012 IN TURN RELYING ON AN EARLIER DECISION OF THE CHANDIGARH BE NCH OF THE TRIBUNAL IN DCIT VS. IND SWIFT LTD. IN ITA NO.729/CHD/2009 RELA TING TO ASSESSMENT YEAR 2006-07 DATE OF ORDER 30.11.2009 HELD AS UND ER: 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ONLY ISSUE ARISING IN THE PRESENT APPEAL IS IN RESPECT OF COMPUTATION OF BOOK PROFITS UNDER SECTION 115JB OF THE ACT. THE ASSESSING OFFI CER WHILE COMPUTING THE SAID BOOK PROFITS HAD ADDED BAC K THE DISALLOWANCE WORKED OUT UNDER SECTION 14A OF TH E ACT OF THE NET PROFITS OF THE BUSINESS AND COMPUTED THE TAX LIABILITY OF THE ASSESSEE COMPANY THEREAFTER. WE FIND THAT THE ISSUE IN THE PRESENT CASE IS COVERED BY THE ORDER OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN DC IT VS. IND-SWIFT LTD. (SUPRA) WHERE VIDE ORDER DATED 30.11.2009 VIDE PARA 8 IT WAS HELD AS UNDER: 8. THE GROUND 1(IV) RAISED BY THE REVENUE IS AGAINST THE COMPUTATION OF BOOK PROFITS U/S 115 JB OF THE ACT. THE ASSESSING OFFICER WHILE COMPUTING THE BOOK PROFIT U/S 115 JB OF THE ACT HAD ADDED BACK THE DISALLOWANCE WORKED U/S 14A OF THE I.T. ACT TO THE NET PROFIT SHOWN IN THE PROF IT AND LOSS ACCOUNT AND COMPUTED THE PROFITS FOR THE YEAR. THE CIT (A) REWORKED THE BOOK PROFITS BY EXCLUDING THE SAID NOTIONAL DISALLOWANCE U/S 115 JB OF THE ACT, IN TURN FOLLOWING THE RATIO LAID DOWN BY THE APEX COURT IN APOLLO TYRES LTD. 255 ITR 273 (SC). WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A). THE ADJUSTMENTS, IF ANY, TO BE MADE TO THE PROFIT SHOWN IN THE PROFIT AND LOSS ACCOUNT, ARE PROVIDED IN THE SECTION 115 JB OF THE ACT ITSELF. THERE IS NO PROVISION IN THE ACT TO MAKE ADJUSTMENT ON ACCOUNT OF NOTIONAL 4 DISALLOWANCE WORKED OUT UNDER SECTION 14A OF THE ACT. THE HON'BLE SUPREME COURT IN APOLLO TYRES LTD. (SUPRA) HELD THAT THE PROFITS OF THE BUSINESS ARE NOT TO BE DISTURBED FOR COMPUTING THE BOOK PROFITS EXCEPT IN THE CIRCUMSTANCES PROVIDED UNDER THE SAID ACT. WE CONFIRM THE ORDER OF CIT IN THIS REGARD AND DISMISS THE GROUND NO.1(IV) RAISED BY THE REVENUE. 6. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE BEFORE THE CHANDIGARH BENCH OF THE TRIBUNAL IN DCIT VS. IND-SWIFT LTD. (SUPRA) AND FOLLOWING THE SAME WE DIRECT THE ASSESSING OFFICER TO ADOPT THE BOOK PROFITS AS PER THE PROFIT & LOSS ACC OUNT AND DO NOT MAKE ADDITION ON ACCOUNT OF DISALLOWANCE WORKED OUT UNDER SECTION 14A OF THE ACT, AS SUCH DISALLOWANCE IS COMPUTED UNDER THE NORMAL PROVISION OF THE ACT, WHICH ARE NOT APPLICABLE FOR DETERMINING B OOK PROFITS UNDER SECTION 115JB OF THE ACT. 6. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENT ICAL TO THE ISSUE AROSE BEFORE THE TRIBUNAL IN ASSESSMENT YEAR 2008-0 9 IN ASSESSEES OWN CASE AND FOLLOWING THE SAID DECISION WE UPHOLD THE ORDER OF THE CIT (APPEALS) IN THIS REGARD AND DISMISS THE GROUND NO. 1 RAISED BY THE REVENUE. 7. WE FIND NO MERIT IN GROUND NOS.2 TO 4 RAISED BY THE REVENUE THAT WHERE THE ISSUE IS COVERED BY THE MUMBAI BENCH OF T HE TRIBUNAL, THE CIT (APPEALS) SHOULD HAVE FOLLOWED THE SAME. THE ISSUE BEING COVERED IN ASSESSEES OWN CASE BY THE ORDER OF THE TRIBUNAL (S UPRA) THE JUDICIAL PROPRIETARY DEMANDS THAT THE SAID ORDER IN ASSESSEE S OWN CASE ON IDENTICAL FACTS IS TO BE APPLIED WHILE ADJUDICATING THE ISSUE IN THE HANDS OF THE ASSESSEE IN THE SUCCEEDING YEARS. FURTHER T HERE IS NO MERIT IN THE PLEA OF THE REVENUE FOR REFERRING THE ISSUE TO THE SPECIAL BENCH WHERE A 5 REFERENCE IS MADE IN CASE THERE IS A DIFFERENCE IN THE OPINION OF DIFFERENT BENCHES ON SAME ISSUE IN DIFFERENT CASES. HOWEVER, IN THE FACTS OF THE PRESENT CASE THE ISSUE HAS BEEN DECIDED BY THE CHAN DIGARH BENCH OF THE TRIBUNAL ITSELF IN ASSESSEES OWN CASE AND THE SAME HAS A BINDING FORCE IRRESPECTIVE OF THE FACT THAT CONTRARY VIEW HAS BEE N TAKEN BY ANOTHER BENCH OF THE TRIBUNAL. THUS GROUND NOS.2 TO 4 RAIS ED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF APRIL, 2012. SD/- SD/- (T.R. SOOD) (SUSHMA CHOW LA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 16 TH APRIL, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 6