DCIT, Gandhinagar Circle, Gandhinagar V. Gujarat Industrial Investment Corporation Ltd., Gandhinagar

ITA 1619/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5858 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 30-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AP ARNA AGRAWAL
• Keywords: Set aside
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO. 1619/AHD/2017 (ASSESSMENT YEAR : 2014-15 DCIT, GANDHINAGAR CIRCLE, GANDHINAGAR. VS. M/S. GUJARAT INDUSTRIAL INVESTMENT CORP. LTD., 6 TH FLOOR, BLOCK NO.11 & 12, UDHYOG BHAVAN, SECTOR 11, GANDHINAGAR. [PAN NO. AAACG 5304 Q] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : MS. APARNA AGRAWAL, CIT-D.R. RESPONDENT BY : SHRI SANJAY R. SHAH, A.R. DATE OF HEARING 06.02.2019 DATE OF PRONOUNCEMENT 02.05.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 21.04.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- GANDHINAGAR, AHMEDABAD UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AR ISING OUT OF THE ORDER DATED 30.11.2016 PASSED BY THE INCOME TAX OFF ICER, WARD-4, GANDHINAGAR FOR THE ASSESSMENT YEAR 2014-15 WITH THE FOLLOWING GROUNDS: I. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.19,22,43,075/- MADE BY THE LEARNED AO BEING PROV ISION FOR NON-PERFORMING ASSETS WRITTEN BACK OF EARLIER YEARS. II. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.19,22,43,075/- MADE BY THE LEARNED AO BEING PROV ISION FOR NON-PERFORMING ASSETS WRITTEN BACK OF EARLIER YEARS ADDED TO THE B OOK PROFIT U/S 115JB OF THE I.T. ACT. III. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. - 2 - ITA NO.1619/AHD/2017 GUJARAT INDUSTRIAL INV. CORP. LTD. ASST.YEAR 2014-15 IV. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD C IT(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. GROUND NO.1: THE FIRST GROUND RELATES TO THE ORDER PASSED BY T HE LEARNED CIT(A) IN DELETING THE ADDITION OF RS.19,22,43,075/- MADE BY THE LEARNED AO BEING PROVISION FOR NON-PERFORMING ASSETS WRITTEN BACK OF EARLIER Y EARS. 3. IN FACT, THE ADDITION WAS MADE TO THE TOTAL INCO ME OF THE APPELLANT BEING PROVISION FOR NON-PERFORMING ASSETS OF RS.17,86,35,487/- AND RS.1,36,07,588/- FOR PROVISION DIMINUTION IN VALUE OF INVESTMENTS WRITTEN BACK BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION. THE FACTS OF THIS ADDITION IS THAT T HE APPELLANT HAD MADE PROVISION FOR NON- PERFORMING ASSETS ('NPA') AND DIMINUTION IN VALUE O F INVESTMENTS IN ITS ACCOUNTS FOR THE PREVIOUS YEAR RELEVANT TO AY 2001-02 TO 2009-10. HO WEVER, WHILE COMPUTING TOTAL INCOME OF THE AFORESAID ASSESSMENT YEARS HAD BEEN D ISALLOWED IN COMPUTING THE TOTAL INCOME FOR THOSE YEARS AND ACCORDINGLY, THE SAME WA S NOT CLAIMED AS DEDUCTION AND ADDED BACK TO THE INCOME IN THE COMPUTATION OF TOTA L INCOME FOR SUCH YEARS. DURING THE YEAR UNDER CONSIDERATION THE SAME PROVISION BEING E XCESS WAS WRITTEN BACK AND CREDITED TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR UNDER CON SIDERATION IN ACCORDANCE WITH THE GUIDELINES OF THE RESERVE BANK OF AND ACCOUNTING ST ANDARDS ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA ('ICAI'). HOWEVER, W HILE PREPARING THE COMPUTATION OF TOTAL INCOME, THE SAME WAS EXCLUDED FROM COMPUTATIO N OF TAXABLE INCOME ON THE GROUND THAT THE SAME CANNOT BE TAXED IN THE YEAR OF WRITE BACK WHEN EXCESS PROVISION IS CREDITED TO THE PROFIT & LOSS ACCOUNT BECAUSE THE SAME WAS N OT CLAIMED AS DEDUCTIBLE IN THE YEAR IN WHICH THE PROVISION WAS DEBITED TO THE PROFIT & LOSS ACCOUNT. IN APPEAL, THE LEARNED CIT(A) OBSERVED THAT THE SIMILAR ADDITION WHICH WAS MADE BY THE LEARNED AO FOR A.Y. 2012-13 IN ASSESSEES CASE WAS DELETED BY HIM FURTH ERMORE, EVEN IN 2010-11 ON THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE AO WAS DIRECTED TO DELETE THE SIMILAR - 3 - ITA NO.1619/AHD/2017 GUJARAT INDUSTRIAL INV. CORP. LTD. ASST.YEAR 2014-15 ADDITION TO THE TOTAL INCOME OF THAT PARTICULAR YEA R AND THUS THE LEARNED CIT(A) HAS DELETED THE ADDITION MADE BY THE LEARNED AO. 4. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS SQUA RELY COVERED BY THE LEARNED ITAT JUDGMENT IN REVENUES CASE IN ITA NO.2899/AHD/2013. THE HONBLE TRIBUNAL IN REVENUES APPEAL UPHELD THE ORDER PASSED BY THE LEA RNED CIT(A) AS RELIED UPON BY THE FIRST APPELLATE AUTHORITY. IN THAT VIEW OF THE MATT ER THE INSTANT APPEAL PREFERRED BY THE REVENUE IS LIABLE TO BE REJECTED AS ALSO SUBMITTED BY THE LEARNED AR. ON THE OTHER HAND, LD DR, HOWEVER, FAILED TO CONTROVERT THE CONTENTION MADE BY THE LEARNED AR. 5. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIAL AVAILABLE ON RECORDS. WE HAVE ALSO CAREFULLY CONSIDERED THE ORDER PASSED BY THE LEARNED ITAT IN ITA NO.2899/AHD/2013; RELEVANT PORTION WHEREOF IS AS FO LLOWS: THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL. '1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND O N FACTS IN DELETING THE ADDITION MADE BY THE AO AMOUNTING TO RS.24,64,63,140/- ON AC COUNT OF NPA PROVISIONS WRITTEN BACK OF EARLIER YEARS. 2. THE LEARNED CIT(APPEALS) OUGHT TO HAVE HELD THAT THE ASSESSEE IS NOT ENTITLED TO RELIEF TWICE IN AY 2004-05 AND 2010-11 IN THE SAME WAY HE HAS HELD THAT SAME INCOME CANNOT BE TAXED TWICE. 3. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE ASSESSEE TO REDUCE RS.24,64,63,140/- ON ACCOUNT OF NPA PROVI SIONS -WRITTEN BACK, -WHILE COMPUTING THE BOOK PROFITS U/S.115JB. 4. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW A ND ON FACTS IN DIRECTING THE AO TO GIVE THE BENEFIT FOR PRIOR PERIOD ADJUSTMENT OF RS. 4,82,975/- -WHILE COMPUTING INCOME U/S.115JB. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNE D C1T(APPEALS) MAY BE SET ASIDE AND THAT OF THE A. O. BE RESTORED TO THE ABOVE EXTENT.' 98. THE FIRST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT THE LD.CIT(A) ERRED IN DELETING THE ADDITION FOR RS.24,64,63,140/- BEING P ROVISION FOR DIMINUTION IN THE VALUE OF THE INVESTMENT. - 4 - ITA NO.1619/AHD/2017 GUJARAT INDUSTRIAL INV. CORP. LTD. ASST.YEAR 2014-15 99. AT THE OUTSET, WE NOTE THAT THE IDENTICAL ISSUE IN THE GROUND NO. 1 OF APPEAL OF THE REVENUE PERTAINING TO THE ASSESSMENT YEAR 2008-09 I N ITA 419/AHD/12 HAS BEEN [SEATED IN FAVOR OF ASSESSEE VIDE PARA NO. 67 OF THIS ORDER . THEREFORE, RESPECTFULLY THE SAME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF LD. CIT(A). HENCE THE GROUND OF APPEAL OF REVENUE IS DISMISSED. RESPECTFULLY, FOLLOWING THE SAME, WE FIND NO INFIRM ITY IN THE ORDER PASSED BY THE LEARNED CIT(A) AND THUS THE SAME IS HEREBY UPHELD. REVENUES APPEAL IS, THEREFORE, DISMISSED. 6. GROUND NO.2 : BY WAY OF SECOND GROUND OF APPEAL THE REVENUE HAS C HALLENGED THE ORDER PASSED BY THE LEARNED CIT(A) IN DELETING THE ADDITION OF RS. 19,22,43,075/- MADE BY THE LEARNED AO BEING PROVISION FOR NON-PERFORMIN G ASSETS WRITTEN BACK TO EARLIER YEARS AUDITED TO THE BOOK PROFIT U/S 115JB OF THE A CT. 7. IN THE RETURN OF INCOME, THE APPELLANT CLAIMED T HAT THE AFORESAID WRITTEN BACK OF PROVISION FOR NPA IS CREDITED TO PROFIT AND LOSS AC COUNT SHOULD BE EXCLUDED FROM COMPUTATION OF BOOK PROFIT UNDER CLAUSE (I) OF EXPL ANATION 1 TO SECTION 115JB OF THE ACT. IN FACT, IT HAS WRITTEN BACK PROVISION FOR NPA OF R S. 19,22,43,075/- BEING PROVISION MADE DURING THE EARLIER YEARS AND AMOUNT WAS CREDITED TO P&L ACCOUNT FOR THE YEAR AS INCOME OF THE YEAR. THE CONTENTION PROVIDED BY CLAUSE (I) REGARDING CREDITING THE AMOUNT WITHDRAWN FROM RESERVE OR PROVISION CREDITED TO P&L ACCOUNT IS FULFILLED SINCE THE APPELLANT HAS CREDITED THE AMOUNT WITHDRAWN FROM PR OVISION CREDITED IN A.Y. 2001-02 TO 2006-07, THE APPELLANT HAS SUBSTANTIAL LOSSES AND E VEN AFTER REDUCING THE LOSS BY THE ENTIRE PROVISION FOR NPA CREATED IN THOSE YEARS, THERES B OOK LOSS. IN RESPECT OF A.Y. 2007-08 TO 2009-10, THE APPELLANT ADDED PROVISION FOR NPA TO T HE BOOK PROFIT AND PAID TAX ON BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE WORKING OF BEING PROFIT FOR A.Y.2001-02 TO 2006-07 WAS ALSO PROVIDED TO THE AUTHORITIES BELOW FROM WHERE IT APPEARS THAT EVEN AFTER ADDING PROVISION FOR NPA CREDITED IN SUCH YEARS THE RE IS A BOOK LOSS. IN A.Y. 2007-08 TO - 5 - ITA NO.1619/AHD/2017 GUJARAT INDUSTRIAL INV. CORP. LTD. ASST.YEAR 2014-15 2009-10, THE APPELLANT HAS PAID TAX ON BOOK PROFIT COMPUTED AFTER ADDING PROVISION FOR NPA. THE LEARNED AO FOLLOWING HIS PREDECESSOR ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE, WHICH WAS IN APPEAL DELETED BY THE LEARNED CIT(A) ON THE BASIS OF THE ORDER PASSED IN A.Y. 2011-12 IN ASSESSEES O WN CASE. 8. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS COVE RED BY THE JUDGMENT PASSED BY THE LEARNED ITAT IN REVENUES APPEAL IN ASSESSEES OWN CASE FOR A.Y. 2010-11; COPY WHEREOF HAS BEEN SUBMITTED BEFORE US BEING PART OF THE RECORD AT PAGE NO.115 OF THE PAPER BOOK. IN THAT VIEW OF THE MATTER, THE REVENUE S APPEAL IS BEING DEVOID OF ANY MERIT AND THUS LIABLE TO BE SET ASIDE AS ALSO SUBMITTED B Y THE LEARNED AO. HOWEVER, THE LEARNED DR FAILED TO CONTROVERT THE SAME. 9. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIAL AVAILABLE ON RECORDS. WE HAVE ALSO CAREFULLY CONSIDERED THE ORDER PASSED BY THE LEARNED ITAT IN ITA NO.2899/AHD/2013; RELEVANT PORTION RELATING TO THE IDENTICAL ISSUE WHEREOF IS AS FOLLOWS: 100. THE SECOND ISSUE RAISED BY REVENUE IN THIS AP PEAL IS THAT THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE IS NOT ENTITLED TO THE RELIEF TWICE IN THE AY 2004-05 AND 2010-11. 101. WE HAVE ALREADY ADJUDICATED THIS ISSUE HI THE GROUND NO. 2 OF THE CO NO. 106/AHD/2014 RAISED BY THE ASSESSEE VIDE PARA NO 95 OF THIS ORDER. 102. THEREFORE RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE GROUND OF APPEAL OF THE REVENUE IN TERMS OF THE DIRECTION AS STATED ABOVE. 103. THE THIRD ISSUE RAISED BY REVENUE IN THIS APP EAL IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION FOR RS.24,64,63,140.00 ON ACC OUNT OF NPA WRITTEN BACK WHILE CALCULATING THE PROFIT UNDER SECTION 115JB OF THE ACT. 104. AT THE OUTSET, WE NOTE THAT THE IDENTICAL ISS UE IN THE GROUND NO. 4 OF THE APPEAL OF THE ASSESSEE PERTAINING TO THE ASSESSMENT YEAR 2008 -09 IN ITA 208/AHD/12 HAS BEEN ADJUDICATED IN FAVOR OF ASSESSEE VIDE PARA NO. 60 OF THIS ORDER. THEREFORE, - 6 - ITA NO.1619/AHD/2017 GUJARAT INDUSTRIAL INV. CORP. LTD. ASST.YEAR 2014-15 RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF LD. CIT(A). HENCE THE GROUND OF APPEAL OF REVENUE IS DISMISSED. RESPECTFULLY FOLLOWING THE JUDGMENT PASSED BY THE H ONBLE ITAT, WE FIND NO REASON TO DEVIATE FROM THE STAND TAKEN BY THE LEARN ED CIT(A) SINCE WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) SO FAR AS TO WARRANT INTERFERENCE. THE QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE, I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSEQUENTLY, THE APPEAL FAILS AND IS ACCO RDINGLY DISMISSED. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 02 / 0 5 /201 9 SD/- SD/- ( AMARJIT SINGH ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 02/05/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-GANDHINAGAR, AHMEDABAD. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 02.05.2019 (DICTATION PAGES 5) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02.05.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 02.05.2019 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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