Vepar Pvt. Ltd., Ahmedabad V. The Income tax Officer, Ward-4(1)(4), Ahmedabad

ITA 1506/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6987 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 06-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Keywords: Rule 8D
• Section: 143(3); 14A; 115JB

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 1506/AHD/2016 ( ASSESSMENT YEAR : 2012-13) VEPAR PVT. LTD. KAIVANNA, 9 TH FLOOR, PANCHVATI ELLISBRIDGE, AHMEDABAD 380009 / VS. I.T.O. WARD -4(1)4 2 ND FLOOR, NATURE VIEW BUILDING, ASHRAM ROAD, AHMEDABAD 380009 ./ ./ PAN/GIR NO. : AAACV3821F ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI P. M. MEHTA, A.R. / RESPONDENT BY : SHRI UMA SHANKAR PRASAD, SR.DR DATE OF HEARING 31/01/2019 !'# / DATE OF PRONOUNCEMENT 26/04/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-7, AHMEDABAD (CIT(A) IN SHORT), DATED 0 5.04.2016 ARISING IN THE ASSESSMENT ORDER DATED 25.02.2015 PA SSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING AY 2012-13. ITA NO.1506/AHD/16 [VEPAR PVT. LTD. VS. ITO] A.Y. 2012-13 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN HOLDING THA T THE FIRST GROUND OF THE APPELLANT'S APPEAL CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER IMPUGNED BEFORE HIM WAS GENERAL IN NATURE AND THEREFORE, NOT REQUIRED TO BE ADJUDICATED UPON BY HIM. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADJUSTME NTS/ DISALLOWANCE OF RS.19,24,673/- WHILE COMPUTING BOOK PROFIT UNDER SEC.115JB OF THE ACT WHEN NO SUCH ADDITION OUGHT TO HAVE BEEN MADE. THE SAME MAY BE DIRECTED TO BE DELETED. 3. GROUND NO.1 IS DISMISSED AS NOT PRESSED. 4. GROUND NO.2 CONCERNS ADJUSTMENTS/DISALLOWANCE OF RS.19,24,673/- WHILE COMPUTING BOOK PROFIT UNDER S.115JB OF THE ACT. 5. WITH THE ASSISTANCE OF THE LEARNED AR FOR THE AS SESSEE, WE FIND THAT THE AO HAD MADE DISALLOWANCE OF RS.19,24,673/- BY RESORTING TO SECTION 14A OF THE ACT. THE DISALLOWANCE COMPUTED WITH REFERENCE TO RULE 8D FOR THE PURPOSES OF SECTION 14A WAS IMPO RTED TO SPECIAL PROVISIONS OF SECTION 115JB OF THE ACT FOR ADJUSTME NT OF BOOK PROFITS. WE FIND THAT THE ISSUE IS NO LONGER RES INTEGRA IDENTICAL ISSUE CAME UP BEFORE THE SPECIAL BENCH IN ACIT VS. VIREET INVESTMENTS LTD. 165 ITD 27 (SB). IN THE LIGHT OF THE DECISION OF SPECIAL BENCH, WE FIND MERIT IN THE PLEA OF THE ASS ESSEE. THE AO IS ACCORDINGLY DIRECTED TO DELETE ADJUSTMENTS MADE TO THE BOOK PROFIT ON THIS SCORE. 6. IN PARITY, THE ISSUE REQUIRES TO BE DECIDED IN F AVOUR OF THE ASSESSEE. THE ADJUSTMENT MADE BY THE REVENUE AUTHO RITIES IN THE ITA NO.1506/AHD/16 [VEPAR PVT. LTD. VS. ITO] A.Y. 2012-13 - 3 - BOOK PROFIT TOWARDS DISALLOWANCE UNDER S.14A OF THE ACT IS THUS DIRECTED TO BE DELETED. 7. IN THE RESULT, GROUND NO.2 OF THE ASSESSEES APP EAL IS ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 26/04/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 26/04/201 9