Welspun Enterprises Ltd., (Formerly known as Welspun Projects Ltd.), Vadodara V. The ACIT, Range-4, Vadodara

ITA 1529/AHD/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9764 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 13-11-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 19-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: BIREN SHAH
• Keywords: Earning of tax free income; Revised return; TDS; Rule 8D; Set aside
• Section: 43B; 14A; 115JB; 40(a)(ia); 194C; 201; 43; 72; 13; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER THE DY. CIT, CIRCLE - 2(1)(2), BARODA (APPELLANT) VS M/S. WELSPUN PROJECTS LTD.(FORMERLY KNOWN AS MSK PROJECTS INDIA LTD.) 707 - 708, STERLINE CENTRE, R.C. DUTT ROAD, VADODARA PAN: AABCM4107C (RESPONDENT) M/S. WELSPUN PROJECTS LTD.(FORMERLY KNOWN AS MSK PROJECTS INDIA LTED. 707 - 708, STERLINE CENTRE, R.C. DUTT ROAD, VADODARA PAN: AABCM4107C (APPELLANT) VS THE ACIT, RANGE - 4, BARODA (RESPONDENT) REVENUE BY : S H RI ALOK KUMAR , CIT - D . R. ASSESSEE BY: SHRI VARTIK CHOKSHI & SHRI BIREN SHAH , A.R S . DATE OF HEARING : 13 - 11 - 2 019 DATE OF PRONOUNCEMENT : 17 - 12 - 2 019 I T A NO S . 1467 & 1468 / A HD/20 17 A SS ES SMENT YEAR 2011 - 12 & 2012 - 13 ITA NO S . 1 529 & 1 5 30 /AHD/20 17 ASS ESSMENT YEAR 2011 - 12 & 2012 - 13 I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 2 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE FOUR APPEALS ARISED AGAINST THE ORDER OF LD. CIT(A). OUT OF THESE FOUR APPEALS TWO APPEALS ARE FILED BY THE REVENUE VIDE ITA NOS. 1467 & 1468/AHD/2017 AND TWO OTHER APPEALS VIDE ITA NOS. 1529 & 1530/AHD/2017 ARE FILED BY THE ASSESSEE. 2. FIRST WE TAKE UP THE APPEALS FILED BY THE REVENUE FOR ADJUDICATION. MOST OF THE GROUNDS OF THE APPEALS FILED IN BOTH THE ASSESSMENT YEARS BY THE REVENUE ARE BASED ON CO MMON ISSUES AND IDEN TICAL FACTS. T HEREFO RE, FOR THE SAKE OF CONVENIENCE, W E TAKE UP THE ITA 1467/AHD/2017 AS LEAD CASE AND ITS FINDING WILL BE APPLICABLE TO ITA NO. 1468/AHD/2017 . ITA NO. 1467/AHD/2017 FILED BY REVENUE 3. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) WAS JUSTIFIED IN HOLDING THAT ONLY NET INTEREST EXPENDITURE CAN BE CONSIDERED FOR DISALLOWANCE U/R 8D WITHOUT APPRECIATING THAT NO WHERE IN SECTION 14A R.W.R. 8D IT IS M ENTIONED THAT ONLY NET INTEREST EXPENDITURE SHOULD BE TAKEN INTO ACCOUNT FOR COMPUTING DISALLOWANCE U/S. 14A AND WITHOUT APPRECIATING THAT THE ASSESSEE FAILED TO PROVE THAT NO INTEREST BEARING FUND WAS UTILIZED FOR MAKING INVESTMENT YIELDING TAX FREE INCOM E 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) WAS JUSTIFIED IN HOLDING THAT INTEREST INCOME RECEIVED IS MORE THAN THE INTEREST EXPENDITURE, NO DISALLOWANCE OF INTEREST IS CALLED FOR WITHOUT APPRECIATING THAT THE ASS ESSEE FAILED TO ESTABLISH THE NEXUS OF SURPLUS FUNDS WITH THE INVESTMENT MADE, WHICH YIELDED TAX FREE INCOME AND ACCORDINGLY, THE A.O. HAD CORRECTLY COMPUTED DISALLOWANCE U/S. 14A OF THE ACT IN THE MANNER PRESCRIBED UNDER RULE 8D OF THE ACT SINCE, PURPOSE OF DISALLOWANCE U/S. 14A IS TO MAKE DISALLOWANCE OF SUCH EXPENSES INCURRED FOR EARNING EXEMPT INCOME , IN CASES WHERE THOUGH THE ASSESSEE EARNS EXEMPT INCOME WHICH ARE TAX FREE BUT CLAIMS DEDUCTION OF EXPENSES INCURRED FOR EARNING EXEMPT INCOME 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) WAS JUSTIFIED IN HOLDING THAT INTEREST INCOME RECEIVED IS MORE THAN THE INTEREST EXPENDITURE, NO DISALLOWANCE OF INTEREST IS CALLED FOR WITHOUT APPRECIATING THAT THE AO HAD ADOP TED A RELIABLE AND SCIENTIFIC METHOD TO COMPUTE DISALLOWANCE U/S. 14A IN THE MANNER P RESCRIBED UNDER RULE 8D OF THE I .T. RULES 4. WH ETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. WAS JUSTIFIED IN DIRECTING THE A.O. TO EXCLUDE THE INV ESTMENT OF RS. 144,57,08,274/ - FROM AVERAGE VALUE OF INVESTMENT AFTER VERIFICATION, WITHOUT APPRECIATING T HAT NO WHERE IN RULE 8D OF THE I .T. RULES, IT IS MENTIONED THAT INVESTMENT YIELDING TAXABLE INCOME SHOULD BE EXCLUDED FROM THE AVERAGE VALUE OF INVEST MENT, IN CASES WHERE THE ASSESSEE DOES NOT MAKE DISALLOWANCE OF EXPENDITURE INCURRED ON MAKING INVESTMENT YIELDING TAX FREE INCOME AND YET CLAIMS DEDUCTION OF EXPENSES INCURRED ON INVESTMENT YIELDING TAXABLE INCOME AND INVESTMENT YIELDING TAX FREE INCOME. I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 3 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) WAS JUSTIFIED IN DIRECTING THE A.O. TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF EXEMPT INCOME CLAIMED BY THE APPELLANT WITHOUT APPRECIATING THAT NO WHERE IN SECTION 14A READ WITH RULE 8D OF THE I.T, RULES, IT IS MENTIONED THAT DISALLOWANCE U/S. 14A OF THE ACT CANNOT EXCEED EXEMPT INCOME. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) WAS JUSTIFIED IN DIRECTING THE A.O. TO RESTRICT T HE DISALLOWANCE TO THE EXTENT OF EXEMPT INCOME CLAIMED BY THE APPELLANT, WITHOUT APPRECIATING ON A PLAIN READING OF SECTION 14A OF THE ACT R.W.R. 8D OF THE ACT, IT IS CLEAR THAT DISALLOWANCE U/S. 14A HAS TO BE MADE NOT ONLY IN RESPECT OF EXEMPT INCOME, BUT DISALLOWANCE U/S. 14A OF THE ACT HAS ALSO TO BE MADE ON THE INVESTMENT YIELDING TAX FREE INCOME, SINCE INVESTMENT MADE IS THE SOURCE OF EARNING EXEMPT INCOME, AND WITHOUT MAKING INVESTMENT YIELDING TAX FREE INCOME, NO EXEMPT INCOME CAN BE EARNED. 7. WHET HER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN HOLDING THAT ONLY NET INTEREST EXPENDITURE CAN BE CONSIDERED FOR DISALLOWANCE U/S. 14A OF THE ACT AND DIRECTING THE A.O. TO EXCLUDE INVESTMENT YIELDING TAXABLE INCOME FR OM THE AVERAGE VALUE OF INVESTMENT AND DIRECTING THE A.O. TO RESTRICT DISALLOWANCE U/S. 14A OF THE ACT WITHOUT CONSIDERING THE CLARIFICATION ISSUED BY THE C.B.D.T. VIDE CIRCULAR NO. 14 OF 20001 AND 05 OF 2014 AND WITHOUT C ONSIDERING THE DECISION OF HON B LE SUPREME COURT IN THE CASE OF SMT. TARULATA SHYAM V. COMMISSIONER OF INCOME TAX REPORTED IN (1977) 108 ITR 345(SC) , WHEREIN THE HON B LE SUPREME COURT HELD THAT 'THERE IS NO SCOPE FOR IMPORTING INTO THE STATUTE WORDS WHICH ARE NOT THERE. SUCH IMPORTATION W OULD, BE NOT TO CONSTRUE, BUT TO AMEND THE STATUE. EVEN IF THERE IS A CASUS OMISSUS, THE DEFECT CAN BE REMEDIED ONLY BY LEGISLATION AND NOT BY JUDICIAL INTERPRETATION. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) HA S ERRED IN HOLDING THAT SINCE THE INTEREST FREE FUNDS AVAILABLE WITH THE APPELLANT ARE MANY TIMES MORE THAN THE INTEREST FREE ADVANCES GIVEN TO THE SISTER CONCERN, NO PART OF INTEREST IS DISALLOWABLE AND ACCORDINGLY, THE DISALLOWANCE MADE BY THE A.O. IS DI RECTED TO BE DELETED , WITHOUT APPRECIATING THAT THE ASSESSEE COULD NOT ESTABLISH WITH DOCUMENTARY EVIDENCE TO PROVE THAT NO INTEREST BEARING FUNDS WERE UTILIZED FOR GIVING INTEREST FREE ADVANCE TO ITS SISTER CONCERNS, BUT ONLY INTEREST FREE FUNDS WERE UTI LIZED FOR GIVING INTEREST FREE ADVANCE TO ITS SISTER CONCERNS , AND HENCE THE A.O. HAD CORRECTLY DISALLOWED INTEREST EXPENSES ON INTEREST FREE ADVANCE GIVEN BY THE ASSESSEE TO ITS SISTER CONCERN 9. WHETHER ON THE FACTS AND CIRCUMSTANCES AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) WAS JUSTIFIED IN HOLDING THAT 'SINCE THE INTEREST FREE FUNDS AVAILABLE WITH THE APPELLANT ARE MANY TIMES MORE THAN THE INTEREST FREE ADVANCES GIVEN TO THE SISTER CONCERN, NO PART OF INTEREST IS DISALLOWABLE AND AC CORDINGLY, THE DISALLOWANCE MADE BY THE A.O. IS DIRECTED TO BE DELETED WITHOUT APPRECIATING THAT THE AVAILABILITY OF INTEREST FREE FUNDS, IN THE HANDS OF ASSESSEE WOULD NOT SUFFICE TO PROVE THAT THE ASSESSEE HAD UTILIZED INTEREST FREE FUNDS FOR GIVING INTE REST FREE ADVANCE TO ITS SISTER CONCERN AND WITHOUT APPRECIATING THAT THE ASSESSEE ON THE ONE HAND HAD INCURRED HUGE INTEREST EXPENSE ON BORROWED CAPITAL AND ON THE OTHER HAND HAD GIVEN INTEREST FREE ADVANCE TO ITS SISTER CONCERN 10. WHETHER ON THE FACTS A ND CIRCUMSTANCES AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE A.O. TO DELETE THE DISALLOWANCE OF INTEREST EXPENSES, BY RELYING ON THE DECISION OF HON'BLE I.T.A.T. IN THE ASSESSEE'S OWN CASE FOR A.Y. 2009 - 10, WITHOUT A PPRE CIATING THAT THE HON BLE I.T.A.T. .IN I.T.A. NO. 2820AHD/2012 HAD SET ASIDE THE ISSUE TO THE FILE OF THE A.O. FOR VERIFICATION,, HOWEVER, IN THE INSTANT CASE, THE LD. C.I.T.(A) BY ACCEPTING THE ASSESSEE'S SUBMISSION AT FACE VALUE, DELETED THE DISALLOWA NCE OUT OF INTEREST EXPENSE. 11. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) WAS JUSTIFIED IN HOLDING, THAT 'SINCE THE APPELLANT HAS NOT PAID ANY INTEREST TO THE CREDITORS, CHARGING OF INTEREST ON DEBT IS NOT WARRANTE D, WITHOUT APPRECIATING THAT THE A.O. IN THE ASSESSMENT ORDER DID NOT MAKE DISALLOWANCE OF INTEREST ON DEBIT BALANCE OF ASSOCIATE CONCERN ON THE GROUND THAT THE ASSESSEE HAS PAID INTEREST TO SUNDRY CREDITORS 12 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. C.L.T. (A) WAS RIGHT IN HOLDING THAT ' THE A.O, WAS NOT JUSTIFIED IN DISALLOWING THE INTEREST ON THE BASIS OF OUTSTANDING DEBTS IN THE NAME OF ASSOCIATE CONCERN ARISING AS A RESULT OF BUSINESS TRANSACTION BY RELYING ON THE DECISI ON OF HONTDLE I.T.A.T. 'C' BENCH, AHMEDABAD VIDE ORDE R DATED 25 - 07 - 2013 IN I.T.A. NO . 2820/AHD/2012, WITHOUT APPRECIATING THAT THE ISSUE OF NON CHARGING OF INTEREST ON DEBIT BALANCE WAS NOT SUBJ ECT MATTER OF APPEAL BEFORE HON BL E I .T.A.T. IN I.T.A. NO. 28 20/AHD/2012 13. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. C.I .T. (A) WAS RIGHT IN HOLDING THAT ' THE A.O. WAS NOT JUSTIFIED IN DISALLOWING THE INTEREST ON TH E BASIS OF OUTSTANDING DEBTS IN THE NAME OF ASSOCIATE CONCERN ARISING AS A RESULT OF BUSINESS TRANSACTION WITHOUT APPRECIATING THAT THE A.O. HAD CORRECTLY MADE ADDITION OF INTEREST EXPENSES, SINCE THE ASSESSEE COULD NOT GIVE ANY CONVINCING REASON FOR NON CHARGING OF INTEREST ON DEBIT BALANCE OF ITS ASSOCIATED CONCERN, WHEN IT WAS PAYING SUBSTANTIAL INTEREST EXPENSES ON BORROWED CAPITAL AND IT WAS NOT THE ASSESSEE'S CONTENTION THAT SINCE IT HAD GIVEN INTEREST FREE LOAN, IT DID NOT CHARGE INTEREST ON OUTSTANDING LOAN/DEBIT BALANCE OF ASSOCIATE CONCERNS I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 4 4. DURING THE CO URSE OF ASSESSMENT, THE ASSESSEE HAS BROUGHT TO THE NOTICE OF ASSESSING OFFICER THAT ASSESSEE COMPANY HAS MADE INVESTMENT IN SHARES OUT OF OWN FUND AND COMPANY WAS HAVING SUFFICIENT ACCUMULATED RESERVE THEREFORE NO DISALLOWANCE U/S. 14A BE MADE. HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE SUBMISSION OF THE ASSESSEE STATING THAT ASSESSEE HAS NOT PROVED THAT THERE WAS NO NEXUS BETWEEN THE INVESTMENT MADE FOR EARNING THE EXEMPTED INCOME AND INCOME BEARING FUND, THEREFORE, ASSESSING OFFICER HAS COMPUTE D THE DISALLOWANCE U/S. 14A R.W. RULE 8D TO THE AMOUNT OF RS. 3,24,01,455/ - ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5 . GROUND NOS. 1 TO 3 AND 7 OF THE REVENUE ARE PERTAINED TO COMMON ISSUE THAT ONLY NET INTEREST EXPENDITURE SHOULD BE TAKEN INTO A CCOUNT FOR COMPUTING DISALLOWANCE U/S. 14 A R.W.R. 8D . THEREFORE, ALL THESE THREE GROUNDS OF APPEAL ARE ADJUDICATED TOGETHER. 6 . THE ASSESSEE HAS CLAIMED DIVIDEND INCOME AMOUNTING TO RS. 26,400/ - , HOWEVER, THE ASSESSING OFFICER HAS COMPUTED DISALLO WANCE U/S. 14A R.W. RULE 8D TO THE AMOUNT OF RS. 3 , 24 , 01 , 455/ - . THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER FOLLOWING THE DECISION OF ITAT AHMEDABAD IN THE CASE OF ADI T YA MEDISALES LT. VS. ADDL. CIT 67 TAXMAN.COM 270 (AHD) & SHAH BAGWANDAS K CHOKSHI VS. DCIT (ITA NO. 777/AHD/2011) HAS HELD THAT ONLY NET INTEREST SHOULD BE CONSIDERED. 7 . GROUND NO. 4 IS FILED AGAINST THE DECISION OF LD. CIT(A) THAT INVESTING YIELDING TAXABLE INCOME SHOULD BE EXC LUDE D FROM THE AVERAGE V ALUE OF I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 5 INVESTMENT. THE ASSESSING OFFICER WAS OF THE VIEW THAT IN A MIXED SYSTEM OF ACC OUNTING THE IDENTIFICATION OF M O N E Y EMPLOYED TOWARDS EXEMPTED AND NON - EXEMPTED INCOME CANNOT BE MADE DUE TO MULTIPLICITY OF TRANSACTIONS. THE LD. CIT(A) AFTER FOLLOWING THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SUZLAN ENERGY LTD.33 TA XMAN.COM 151 (GUJ) HELD THAT INVESTMENT MADE BY ASSESSEE IN FOREIGN SUBSIDIARY , THE DIVIDEND FROM WHICH WOULD BE TAXABLE, CANNOT BE CONSIDERED FOR DISALL OWANCE U/S. 14A 8 . GROUND NOS. 5 & 6 OF THE REVENUE ARE AGAINST THE DECISION OF LD CIT(A) TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF EXEMPT INCOME. T HE ASSESSEE HAS EARNED TOTAL EXEMPT INCOME OF RS. 26,400/ - DU RING THE YEAR CONSIDERATION. T HE LD. C IT(A) AFTER FOLLOWING THE DECISION OF DAGA GLOBAL CHEMICAL PVT. LTD. (ITA NO. 5592/MUMBAI/2012 AND HON BLE ITAT AHMEDABAD IN THE CAS E OF RATAN CHAND & CO VS. ITO ( ITA 2660/AHD/2011) A.Y. 2008 - 09 ORDER DATED 24 - 09 - 2009 HAS HELD THAT THE DISALLOWANCE U/S. 1 4A R.W. RULE 8D CANNOT EXCEED THE EXEMPT INCOME. 9 . WE HAVE HEAR D THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD . 9 .1. REGARDING GROUND NOS 1 TO 3 AND 7 ON THE ISSUE THAT ONLY NET INTEREST EXPENDITURE SHOULD BE TAKEN INTO ACCOUNT FOR COM PUTING DISALLOWANCE U/S. 14 A. A FTER CONSIDERING THE FINDING OF LD. CIT(A) BASED ON DECISION OF CO - ORDINATE BENCHES OF THE ITAT IN THE CASE ADITYA MEDISALES PVT. VS. ADDL. CIT SUPRA AND ALSO TAKING INTO CONSIDERATION THE DECISION OF HON BLE HIGH COURT IN THE CASE OF PR. CIT - 3 VS. NIRMA CREDIT & CAPITAL P. LTD. (2017) 85 I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 6 TAXMAN.COM 72 (GUJ) , WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD. CIT(A), THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE STANDS DISMISSED. 9 .2 IN RESPECT OF GROUND NO. 4 O F THE REVENUE ON THE ISSUE THAT INVESTMENT RESULTING INTO TAXABLE INCOME SHOULD BE EXCLUDED WHILE COMPUTING THE DISALLOWANCE UNDER RULE 8D, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD. CIT(A) AFTER TAKING INTO CONSIDERATION THE FINDING OF HON BLE GU JARAT HIGH COURT IN THE CASE OF CIT VS. SUZLAN ENERGY LTD. 33 TAXMAN.COM 151 (GUJ) . T HEREFORE, WE DO NOT FIND ANY SUBSTANCE IN THIS GROUND OF APPEAL AND THE SAME IS DISMISSED. 9 .3 REGARDING GROUND NO. 5 & 6 OF THE APPEAL OF THE REVENUE OF ULTIMATELY RESTRICTING THE DISALLOWANCE U/S. 14A R.W. RULE 8D TO THE EXTENT OF EXEMPT INCOME O F RS. 26,400/ - , IT IS OBSERVED THAT LD. CIT(A) HAS RESTRICTED THE ADDITION AFTER FOLLOWING THE VARIOUS DECISIONS OF ITAT AHMEDABAD AS REPORTED AB OVE. FURTHER AFTER CONSIDERING THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF PR. CIT VS. STATE BANK OF PATIALA (2018) 99 TAXMAN.COM 286 (SC) DATED 8 TH OCTOBER, 2018, WHERE IT IS HELD THAT DISALLOWANCE U/S. 14A COULD BE RESTRICTED TO THE AMOUNT OF E XEMPT INCOME ONLY AND ALSO CONSIDERING THE DECISION OF ITAT AHMEDABAD IN THE JIVRAJ TEA LTD. VS. DCIT ITA 886/AHD/2012 WE DO NOT FIND ANY ERROR IN THE DECISION OF LD. CIT(A), THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE ALSO STANDS DISMISSED. 9 .4 GROUND NO. 8 TO 10 IS PERTAINED TO THE ISSUE THAT ONLY INTEREST FREE FUNDS WERE UTILIZED FOR GIVING INTEREST FREE ADVANCES TO ITS SISTER CONCERN. I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 7 DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS OBSERVED THAT ASSESSEE HAS GIVEN INTEREST FRE E AD VANCES/LOAN TO ITS FOLLOWING ASSOCIATED CONCERNS: - I. MSK PROJECTS (HIMAT NAGAR BYPASS) P. LTD. II. BULL MSK INFRASTRUCTURE P. LTD. III. MSK PROJECT (KIM MANDAVI CORADORS) P.LTD IV. DEWAS BHOPAL CORADOR LTD. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT ASSESSEE HAS CHARGED INTEREST @ 12% IN TWO CASES AND IN RESPECT OF THREE CASES IT HAS NOT CHARGED INTEREST. THEREFORE, BY APPLYING RATE OF INTEREST @ 12% ON THE OUTSTANDING BALANCE AS ON 31 ST MARCH, 2010, THE ASSESSING OFFICER HAS DISALLOWED PROPORTIONAT E INTEREST TO THE AMOUNT OF RS. 36,22,200/ - . THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS STATED THAT AS PER INFORMATION SUBMITTED BY THE ASSESS EE INTEREST WAS NOT CHARGED FROM TWO PARTIES NAMELY M.S.K PROJECTS (HIMAT NAGAR B YPASS ) P LTD. AND BULL M SK INFRASTRUCTURE PVT. LTD. W HILE DELETING THE DISALLOWANCE OF INTEREST, LD. CIT(A) HAS RELIED ON THE DECISION OF JURISDICTIONAL ITAT IN THE ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2009 - 10 VIDE ITA 2820/AHD/2010 HOLDING THAT INTER EST FREE FUNDS AVAILABLE WITH T H E ASSESSEE WERE MORE THAN THE INTEREST FREE ADVANCES GIVEN TO THE RELATED PAR TIES. IT IS DEMONSTRATED FROM THE FINDING OF LD. CIT(A) THAT INTEREST FREE FUNDS IN THE FORM OF SHARE CAPITAL AND RESERVES AND SURPLUS AVAILABLE WITH THE ASSESSEE AS ON 31 ST MARCH, 2011 WERE RS. 477.54 CRORE AS AGAINST THE INTEREST FREE ADVAN CES GIVEN TO THE SISTER CONCERN. CONSIDERING THE SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE, WE DO NOT FIND ANY ERROR IN THE DECISION OF LD. CIT(A), THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 8 9 .5 GROUND NO. 11 TO 13 IS PERTAINED TO THE ISSUE THAT ASSESSEE HAS NOT PAID ANY INTEREST TO THE CREDITORS THEREFORE CHARGING OF INTEREST ON DEBIT IS NOT WARRANTED. DURING THE COUR SE OF ASSESSMENT, THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO EXPLAIN WHY 18% INTEREST SHOULD NOT BE CHARGED ON OUTSTANDING DE BT FROM THE ASSOCIATED CONCERNS. T HE ASSESSEE HAS SUBMITTED THE LEDGER ACCOUNT OF ALL THE ASSOCIATED CONCERNS. THE ASSESSING OFFICER HAS CHARGED 18% INTEREST ON THE OUTSTANDING BALANCE PERTAINING TO ASSOCIATED CONCERN S AND MADE ADDITION OF R S. 8 , 97 , 52 , 027/ - . THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DELETED THE ADDITION ON THE GROUND TH AT ASSESSEE WAS HAVING INTEREST FREE FUND TO THE EXTENT OF RS. 477.54 CRORE MORE THAN THE DEBT AMOUNT . AFTER CONSIDERING THE FACTS AND FINDING OF LD. CIT(A), IT IS NOTICED THAT TOTAL OUTSTANDING DEBT IN THE NAME OF ASSOCIATED CONCERN WAS TO THE AMOUNT OF RS. 49 , 86 , 2 2 , 376/ - WHEREAS INTEREST FREE FUND OF THE ASSESSEE WAS TO THE AMOUNT FOR S. 477.54 CRO R E. IN THE LIGHT OF THE ABOVE FACTS , AFTER CONSIDERING THE DECISION OF ITAT AHMEDABAD IN THE CASE OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 2009 - 10 HOLDING THAT WHEN ASSESS EE HAD SUFFICIENT INTEREST FREE FUND THEN NO DISALLO WANCE OF INTEREST IS CALLED FOR , WE UPHOLD THE DECISION OF LD. CIT(A). T HEREFORE, T HIS GROUND OF APPEAL OF THE REVENUE IS REJECTED. 10. IN THE RE SULT, THE APPEAL OF THE REVENUE IS DISMISSED. I TA NO. 1468 /AHD/2017 FILED BY REVENUE 11 . AS THE ISSUES AND FACTS PERTAI NING TO GROUND NOS. 1 TO 10 OF ITA NO. 1468/AHD/2017 ARE SIMILAR TO ITA NO. 1467/AHD/2017 AS ADJUDICATED ABOVE I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 9 IN THIS ORDER . THEREFORE, AFTER APPLYING THE FINDINGS AND THE REASON S AS ADJUDICATED IN THE ITA NO. 1467/AHD/2017 IN THE CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT YEAR 2011 - 12 AS CITED ABOVE ALL THE GROUNDS OF APPEAL OF REVENUE FROM 1 TO 10 ARE DISMISSED. 12 . GROUND NOS. 11 AND 12 IS AGAINST THE DECISION OF LD. CI T(A) HOLDING THAT AMOUNT OF DISALLOWANCE CANNOT BE ADDED TO THE BOOK PROFIT U/S. 115JB. THE LD. CIT(A) HAS PLACED RELIANCE ON THE DECISION OF ITAT IN THE CASES WHEREIN IT HAS BEEN HELD THAT PROVISION OF SECTION 14A CANNOT BE IMPORTED INTO WHILE COMPUT ING THE BOOK PROFIT U/S. 115JB. CONSIDERING THE ABOVE FACTS AND FINDING OF LD. CIT(A) AND DECISION OF SPECIAL BENCH OF THE ITAT IN THE CASE OF ACIT VS. VINIT INVESTMENT PVT. LTD. WE CONSIDER THAT EXPENDITURE INCURRED TO EARN EXEMPT INCOME IS NOT TO BE ADDED FOR COMPUTING THE BOOK PROFIT U/S. 115JB OF THE ACT, THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS ALSO DISMISSED. 13 . IN THE RESULT, THE APPEAL OF THE REVENUE IS D IS MISSED. 1 4 . IN THE RESULT, BOTH ITA 1467 AND 1468/AHD/2017 FILED BY REVENU E ARE DISMISSED. ITA 1529 /AHD/2017 FILED BY ASSESSEE GROUND NO. 1 (D ISALLOWANCE U/S. 40(A)(IA) TO THE AMOUNT OF RS. 1 , 06 , 0 8 , 427/ - ) 1 5 . DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS MADE DISALLOWANCE O F RS. 1 , 06 , 21 , 427/ - U/S. 40(A)(IA) OF THE ACT ON THE GROUND THAT ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE ON VARIOUS PAYMENTS. THE LD. I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 10 CIT(A) HAS SUSTAINED THE ADDITION STATING THAT DURING THE COURSE OF APPELLATE PROCEEDINGS THE LD. COUNSEL HAS ADMITTED THAT VARIOUS PAYMENTS MADE FOR FABR ICATION WORK, CONSULTATION CH ARGES, REINFORCEMENT WORK, CONCRETE WORK , ROAD WORK , CENTERING EARTH WORK ETC. LIABLE FOR TDS U/S. 194C OF THE ACT. THEREFORE CONSIDERING THAT ASSESSEE HAS NOT MADE COMPLIANCE WITH THE PROVISION OF SECTION 40(A)(IA), THE LD. C IT(A) HAS SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS REFERRED THE PROVISO OF SECTION 40(A)(IA) OF THE ACT TO OPERATE RETROSPECTIVELY AND SU BMITTED THAT IT HAS OBTAINED CERTIFICATES FROM PAYEES THAT THEY HAVE PAID NECESSARY TAXES. DURING THE COURSE OF APPELLATE PROCEEDINGS B EFORE US, THE L D. COUNSEL HAS PLACED RELIANCE ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF ANSAL LANDMARK TOWNSHIP LTD (2015) 61 TAXMAN.COM 45 AND ALSO PLACED RELIANCE ON THE DECISION OF CO - ORDINATE BENCH IN THE CASE OF HI POLIN INDUSTRY VS. ITO VIDE ITA NO. 1079/AHD/2016 FOR ASSESSMENT YEAR 2012 - 13 SUBMITTED THAT DISALLOWANCE BE RESTRICTED TO 30% OF THE AMOUN T ON WHICH TAX WAS NOT DEDUCTED. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LD. CIT(A). AFTER CONSIDERING THE ABOVE FACTS AND DECISION OF CO - ORDINATE BENCH ON THIS ISSUE IN THE CASE OF HIPOLIN IS REPRODUCED AS UNDER: - 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND FIND THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT JAIPUR BENCH IN THE CASE OF SHRI RAJENDRA YADAV VS. ITO AND SMT. SONU KHANDELWAL VS. ITO. IN THESE ORDERS IT WAS HELD THAT THE DISALLOWANCE U/ S 40(A) (IA) TO BE RESTRICTED TO 30% OF THE ADDITION. IN THESE ORDERS THE TRIBUNAL HAS CONSIDERED THE AMENDED PROVISIONS OF SECTION 40(A)(IA) OF I.T. ACT. IN THESE ORDERS THE ASSESSMENT YEAR'S INVOLVE WAS 2007 - 08 AND 2008 - 09. IN ITA NO. 6312/DEL/2016 SMT. KANTA YADAV VS. ITO THE PRESENT APPEAL THE ASSESSMENT YEAR IS 2012 - 13. THEREFORE FACTS ARE IDENTICAL. IN THIS VIEW OF THE MATTER AND FOLLOWING THE ABOVE DECISIONS OF JAIPUR BENCH, WE SET ASIDE AND MODIFY THE ORDERS OF THE AUTHORITIES ITA NO. 2601/AHD/2017 A.Y. 2013 - 14 BELOW AND DIRECT THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 30% OF THE TOTAL ADDITION MADE ON ACCOUNT OF DEDUCTION OF TDS U/S 40(AXIA) OF THE ACT.' WE FIND SUBSTANCE IN THE CONTENTIONS AND/OR SUBMISSIONS MADE BY THE ASSESSEE'S COUNSEL T AKING INTO CONSIDERATION THE OBSERVATION MADE BY THE HON'BLE ITAT DELHI BENCH AS ABOVE. IT ALSO APPEARS THAT THE ISSUE I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 11 IS SQUARELY COVERED BY THE AFORESAID JUDGMENT. HENCE, RESPECTFULLY FOLLOWING THE SAME WE SET ASIDE AND MODIFY THE ORDERS PASSED BY THE AU THORITIES BELOW. WE FURTHER DIRECT THE LEARNED AO TO RESTRICT THE ADDITION TO 30% OF THE TOTAL ADDITION MADE ON ACCOUNT OF DEDUCTION OF TDS U/S 40(A)(IA) OF THE ACT. WE FIND THAT THE IDENTICAL ISSUE HAS REALLY BEEN DECIDED BY THIS CO - ORDINATE BENCH. WE, TH EREFORE, RESPECTFULLY MODIFY THE ORDER PASSED BY THE AUTHORITIES BELOW BY DIRECTING THE LD. AO TO RESTRICT THE ADDITION WITH 30% OF THE TOTAL ADDITION MADE ON ACCOUNT OF NON - DEDUCTION OF TDS UNDER SECTION 40(A)(IA) OF THE ACT. RESPECTFULLY FOLL OWING THE DECISION OF CO - ORDINATE BENCH AS CITED ABOVE, WE RESTRICT THE DISALLOWANCE TO 30% OF THE AMOUNT ON WHICH TDS WAS NOT DEDUCTED. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSE IS PARTLY ALLOWED. GROUND NO . 2 (DISALLOWANCE OF RS. 22, 0 6 ,100/ - A S WRITTEN OF ON IRRECOVER ABLE ADVANCES TO THE EMPLOYEES) 1 7 . DURING THE COURSE OF ASSES SMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED BAD DEBT WRITTEN OFF AMOUNTING TO RS. 22 , 06 , 100/ - . THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO S UBMIT THE DETAIL OF THE BAD DEBT IN VIEW OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF TRF LTD. O N VERIFICATION OF T HE DETAIL FI L E D BY THE ASSESSEE, THE ASSESSING OFFICER HAS NOTICED THAT DEBT WRITTEN OFF WERE NEVER DECLARED AS INCOME IN THE EA RLIER YEARS. THEREFORE, THE CLAIM OF THE ASSESSEE FOR BAD DEBT WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASESSEE. ON APPEAL, THE LD. CIT(A) HAS SUSTAINED THE DISALLOWANCE. 18 . WE HAVE HERD THE RIVAL CONTENTION ON THIS ISSUE AND PERUSED T HE MATERIAL ON RECO RD. IT IS OBSERVED THAT THE AFORESAID AMOUNT OF BAD DEBT WRITTEN OFF WAS NEVER SHOWN AS INCOME IN THE EARLIER ASSESSMENT YEAR. FURTHER , THE ASSESSEE HAS CLAIMED THAT SUCH ADVANCES WERE GIVEN TO THE EMPLOYEES WHO HAVE LEFT THE JOB A ND PLACED RELIANCE ON THE JU RISDICTIONAL PRONOUNCEMENTS . WE FIND THAT THE FACTS OF THE DIFFERENT JU DICIAL I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 12 PRONOUNCEMENTS REFERRED BY THE LD. COUNSEL ARE DISTINGUISHABLE FROM THE FACT OF THE CASE OF THE ASSESSEE. I F IT IS AN EXP ENDITURE INCURRED IN RESPE CT OF ITS BUSINESS, IT SHOULD HAVE BEEN CLAIMED DURING THE RELEVANT A SSESSMENT YEAR AND IF IT IS A TRADE DEBT IT SHOULD HAVE BEEN ADVANCED IN RESPECT OF TRA DE OR BUSINESS OF THE ASSESSEE. IN THE PRESENT CASE THE ASSESSEE IS NOT ABLE TO LEAD ANY EVIDENCE H OW IT HAS GONE INTO COMPUTATION OF INCOME OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION OR IN ANY OTHER ASSESSMENT YEAR. BEING SO, WE ARE OF THE OPINION THAT FINDINGS OF THE LOWER AUTHORITIES IN DISALLOWING THE CLAIM OF THE ASSESSEE ARE JUSTI FIED. WE CONFIRM THE ORDER OF THE CIT(A). THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. GROUND NO. 3 (D ISALLOWANCE OF TOLL PLAZA EXPENSE OF RS. 12 , 50 , 957/ - ) 19 . DURING ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLA IMED TOLL PLAZA EXPENSES AT RS. 32 , 00 , 829/ - BUT ONLY FURNISHED SUPPORTING BILL IN RESPECT OF EXPENSES OF RS. 12 , 52 , 957/ - , THEREFORE, BALANCE AMOUNT OF RS. 12 , 52 , 957/ - WAS DISALLOWED. EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A) THE AS SESSEE HAS NOT FURNISHED THE SUPPORTING BILL AND EVIDENCES OF INCURRING THE AFORESAID EXPENSE, THEREFORE , THE LD. CIT(A) HAS SUSTAINED DISALLOWANCE MADE BY THE ASSESSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE ASSESSEE HAS NOT F ILED ANY EVIDENCES TO SUBSTANTIATE THE CL AIM OF TOLL PLAZA EXPENSES, THEREF ORE , WE DO NOT FIND ANY INTERFERENCE IN THE DECISION OF L D . CIT(A) . ACCORDINGLY , THIS GROUND OF APPEAL OF THE ASSESSE IS DISMISSED. 20 . GROUND NOS. 4 & 5 OF THE APPEAL OF THE A SSESSEE ARE NOT PRESSED, SO, THE SAME ARE DISMISSED AS NOT PRESSED. I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 13 ITA NO. 1530 /AHD/2017 FILED BY ASSESSEE GROUND NO. 1 (DISALLOWANCE U/S. 40(A)(IA) OF RS. 84,75,490/ - ) 21 . THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE TO VARIOUS PAYMENTS, THEREFORE, TH E ASSESSING OFFICER HAS MADE DISALLOWANCE OF RS. 89 , 07 , 709/ - U/S. 40(A)(IA) OF THE ACT. THE LD. CIT(A) HAS SUSTAINED THE ADDITION. THE LD. COUNSEL HAS REITERATED THE SIMILAR SUBMISSION AND REITERATED THE SIMILAR JUDICIAL PRONOUNCEMENT AS REFERRED WHILE A DJUDICATING THE SIMILAR ISS UE AS PER GROUND NO. 1 OF ITA NO. 1529/AHD/2017 AS CITED ABOVE IN THIS ORDER . AFTER APPLYING THE FINDINGS OF GROUND NO. 1 OF ITA 1529/AHD/2017 ON SIMILAR FACT AND ISSUE TO THIS GROUND OF APPEAL IN ACCORDANCE WITH THE DECISION OF CO - ORDINATE BENCH IN THE HIPOLI N SUPRA, WE RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS. 30% , THEREFORE , THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. GROUND NO. 2 (DISALLOWANCE U/S. 14A TO THE EXTENT OF RS. 31 , 47 , 028/ - ) 22 . DURING THE COU RSE OF ASSES SMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DIVIDEND OF RS. 12 , 93 , 14 , 548/ - AS EXEMPT FROM TAX. THE ASSESSING OFFICER HAS WORKED DISALLOWANCE U/S. 14A R.W. RULE 8D TO THE AMOUNT OF R S. 1 , 19 , 43 , 345/ - . HOWEVER, IN THE APPEAL, THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE TO THE EXTENT OF ADMINISTRATIVE EXPENDITURE OF RS. 31 , 37 , 028/ - . WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECO R D. THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE TO THE EXTENT OF AD MINISTRATIVE EXPENDITURE AFTER TAKING INTO CONSIDERATION THE INVOLVEMENT OF MAN POWER, INCURRING BANK CHARGES/ SUPPORT/ACCOUNTING CHARGES/SALARY OF THE EMPLOYEES ALONG WITH USE OF THE INFRASTRUCTURE OF THE I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 14 ASSESSEE COMPANY. HOWEVER AFTER CONSIDERING THE SU BMISSION OF THE ASSESSEE THAT INVESTMENT ON WHICH EXEMPT INCOME EARNED WERE MADE IN EARLIER ASSESSMENT YEAR WITH GROUP COMPANY WHICH DO NOT REQUIRE ANY MONETARY OR MANAGERIAL EFFORTS, W E RESTRICT THE DISALLOWANCE OUT OF ADMINISTRATIVE EXPENDITURE TO THE E XTENT OF RS . 20 LACS. THEREFORE, T HIS GROUND O F APPEAL OF THE ASSESSEE IS PAR T L Y ALLOWED. 23 . GROUND NOS. 3 & 4 OF APPEAL OF THE ASSESSEE ARE NOT PRESSED, SO, THE SAME ARE DISMISSED AS NOT PRESSED. GROUND NO. 5 (NOT CONSIDERING THE CLAIM FOR DEDUC TION U/S. 43B FOR SUM OF RS. 51 , 72 , 109/ - ) 24 . THE ASSESSEE HAS CLAIMED THAT ASSESSING OFFICER HAS NOT ALLOWED DEDUCTION U/S. 43B IN RESPECT OF BONUS OF RS. 50 , 51 , 016/ - AND SALES TAX OF RS. 1 , 21 , 096/ - PAID BEFORE DUE DATE OF FURNISHING OF RETURN OF INCOM E. T HE DOCUMENTARY E VIDENCES IN THIS REGARD WERE FURNISHED VIDE LETTER DATED 24 TH FEB, 2015 BEFORE THE ASSESSING OFFICER. THE LD. CIT(A) HAS REJECTED THE CLAIM OF THE ASSESSEE AFTER REFERRING THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF GOETZE (I NDIA) LTD. VS. CIT 284 ITR 323 THAT NO SUCH CLAIM MADE I N THE RETURN OF INCOME FILED AND THE ASSESSEE HAS ALSO NOT REVISED THE RETURN OF INCOME TO CLAIM FRESH DEDUCTION . 25 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT VIDE LETTER DATED 24 TH FEB, 2015 PLACED AT PAGE NO. 72 OF THE PAPER B OOK , T HE ASSESSEE HAS CLAIMED DEDUCTION U/S. 43B AS PER PARA 5 OF THE LETTER AND ENCLOSED THE I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 15 SUPPORTING DOCUMENT IN SUPPORT OF CLAIM OF DEDUCTION. WE OBSERVED THAT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) , THE SUPREME COURT HAD OCCASION TO DEAL WITH A SLIGHTLY DIFFERENT SET OF CIRCUMSTANCES WHERE THE ASSESSEE SOUGHT TO CLAIM DEDUCTION AFTER THE TIME FOR COMPLETION OF THE REVISED RETURN HAD ELAPSED WHEREAS IN THE CASE OF THE ASSESSEE THE CLAIM HAD BEEN MADE BEFORE THE CONCLUSION OF THE ASSESSMENT PROCEEDINGS, AND THAT, THE REQUISITE MATERIAL WAS ALSO FILED. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPINION THAT THE CLAIM OF THE ASSESSEE SHOULD HAVE BEEN CONSIDERED BY THE ASSESSING OFFICER AFTER NECESSITY VERIFICATION. THEREFORE, WE REMIT THE MATTER TO THE ASSESSING OFFICER FOR CONSIDERATION THE CLAIM OF THE ASSESSEE AS PER LAW AFTER NECESSARY VERIFICATION. 26 . IN THE RES ULT, APPEAL ITA 1467 & 1468/AHD/2017 FILED BY REVENUE ARE DISMISSED. APPEAL ITA 1529/AHD/2017 FILED BY ASSESSEE IS PARTLY ALLOWED AND APPEAL ITA 1530/AHD/2017 FILED BY ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 17 - 12 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 17 /12 /2019 / COPY OF ORDER FORWARDED TO: - 1. A SSESSEE 2. REVENUE 3. CONCERNED CIT I.T.A NO S . 1467, 1468, 1529 & 1530 /A HD/20 17 A.Y. 2011 - 12 &2012 - 13 PAGE NO DY. CIT VS. WELSPUN ENTERPRISES LTD. 16 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,