DCIT, Circle-I, Kolkata, Kolkata V. M/S Exide Industries Limited, Kolkata

ITA 1640/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3084 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 09-11-2012
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Assessee Lawyers: B K SEAL
• Section: 43B; 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , !' #! $'# #! $'# #! $'# #! $'#, ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI MAHAVIR SINGH, JM] '& '& '& '& /ITA NO.1640/KOL/2012 $'( !)*/ ASSESSMENT YEAR : 2006-07 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) D.C.I.T.,CIRCLE-1, . M/S.EXIDE INDUSTRIES LTD. KOLKATA -VERSUS- KOLKATA (PAN: AAACE 6641 E) ,- 1 2 / FOR THE APPELLANT SHRI L.K.S.DEHIYA CIT(DR) /0,- 1 2 / FOR THE RESPONDENT SHRI B.K.SEAL, C.A. '!3 1 4 /DATE OF HEARING : 18.04.2013 5) 1 4 /DATE OF PRONOUNCEMENT : 19.04.2013. 6 / ORDER PER SHRI K.K.GUPTA, AM THIS APPEAL BY THE REVENUE IS ON THE SOLE ISSUE THA T ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN D ELETING THE ADDITION OF RS.16.53 CRORES AS CONSIDERED FOR DISALLOWANCE U/S 43B OF T HE IT ACT BY THE AO. THE REVENUE HAS ALSO AGITATED THAT THE LD. CIT(A) ERRED IN REST RICTING THE DISALLOWANCE U/S 14A TO 1% ONLY. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE AASSESSEE RESPONDENT HAS SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNA L IN ASSESSEES OWN CASE FOR A.YR. 1996-97 ONWARDS WHEN THE ISSUE HAS TAKEN SHAPE TO C ONCLUDE THAT THE ACCOUNTING SYSTEM FOLLOWED BY THE ASSESSEE REMAINING CONSISTEN T CAN NEITHER BE INVOKED FOR SCRUTINY/ADJUSTMENT UNDER THE RECENTLY BROUGHT ON T HE STATUTE THE PROVISION OF SECTION 145A OF THE ACT OR UNDER THE PROVISION OF SECTION 1 45(3) OF THE ACT. THE LD. COUNSEL HAS SUBMITTED THE PAPER BOOK WHICH INTER ALIA INCLU DES THE COMPILATION OF THE CASE ITA NO.1640 /KOL/2012 2 LAWS RELIED UPON BY THE TRIBUNAL IN RENDERING THE D ECISION IN ASSESSEES OWN CASE ON THIS ISSUE AND ALSO ON THE CONFIRMATION OF DISALLO WANCE OF EXPENDITURE AT 1% UNDER THE PROVISION OF SECTION 14A OF THE ACT WAS ALSO AC CEPTABLE BY THE ITAT, KOLKATA BENCH IN ANOTHER CASE. 3. THE LD. DR SUPPORTED THE ORDER OF THE AO FOR HIS SUBMISSIONS. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIAL AVAILABLE ON RECORD. ON CAREFUL PERUSAL OF FACTS AN D CIRCUMSTANCES OF THE CASE LEADING TO DISALLOWANCE U/S 43B OF THE ACT BY HYPOTHETICALL Y HOLDING A VIEW THAT THE CLAIM OF THE ASSESSEE BECOMES DOUBLE DEDUCTION HAS NOT BEEN INTERPRETED CORRECTLY BY THE AO FOR THE IMPUGNED ASSESSMENT YEAR EVEN WHEN THE MATT ER HAS BEEN ADJUDICATED UPON AND DELIBERATED BY THE TRIBUNAL IN ASSESSEES OWN C ASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEARS BEGINNING FROM 1996-97. WE HAVE AL SO PERUSED THE COMPUTATION MADE AS CONTRADICTORY IN THE ORDER OF AO WHO HAS MI SINTERPRETED THE FINDING OF THE TRIBUNAL IN HIS OWN MANNER IN SO FAR AS HE HAS DISC USSED THE DECISION OF THE ITAT KOLKTA BENCH AT PAGE 4 OF HIS ORDER WHICH REQUIRED CONSIDERATION WAS FOR THE VALUATION OF STOCK SETTLES THE ISSUE AS PER THE RE QUIREMENT OF LAW WHETHER COULD BE CHALLENGED UNDER THE SAME LAW OF CLAIMING DEDUCTION FOR DISALLOWANCE U/S 43B OF THE ACT AS WELL. IN SO FAR AS THE LD. DR HAS NOT BEEN A BLE TO POINT OUT ANY SPECIFIC DEFECT IN THE ACCOUNTING THEREIN WHEN ON THE JUDICIAL CITA TIONS AS RELIED UPON AND WERE BEFORE THE TRIBUNAL AS WELL AS THE HONBLE HIGH COURT THE MATTER WAS ACTUALLY CLARIFIED IN SO FAR AS THE VALUATION OF STOCK IS NOT PART OF THE CL AIM OF EXCISE DUTY REMAINING UNPAID. THEREFORE, IT WAS MISAPPLICATION OF FACTS AND FIGUR ES IN THE MIND OF THE AO TO HAVE DISCOVERED DOUBLE DEDUCTION FOR THE PURPOSE OF DISA LLOWANCE U/S 43B OF THE ACT. 5. THE LD. CIT(A) HAS RIGHTLY CONSIDERED THE REASON THEREIN, IN SO FAR AS, HE CONSIDERED THE DISALLOWANCE AT 1% U/S 14A BY OBSERV ING THE FOLLOWING : I HAVE GONE THROUGH THE SUBMISSION AND THE MERITS OF THE ISSUE. SINCE THE ASSESSMENT YEAR IS 2006-07, RULE 8D IS NOT APPLICAB LE IN VIEW OF THE DECISION OF THE MUMBAI HIGH COURT IN THE CASE OF M/S. GODREJ & BOYCE MFG.CO. LTD. VS DCIT 328 ITR 81 (MUM). THE ASSESSING OFFICER HAS DI SALLOWED THE 2% OF THE ITA NO.1640 /KOL/2012 3 DIVIDEND INCOME U/S 14A ON AN ADHOC BASIS. THE HON BLE KOLKATA TRIBUNAL ON THE OTHER HAND IN THE CASE OF SAGARIKA GOODS AND SE RVICES PVT. LTD. VS ITO 1278/KOL2010 DT.24.09.2010 AND DCIT VS EIH ASSOCIAT ED HOTELS LTD 126 TTJ 246 (KOL) HAS RESTRICTED THE DISALLOWANCE U/S 14A A T 1% FOR YEARS PRIOR TO ASSESSMENT YEARS 2008-09. IN VIEW OF THE ABOVE DECI SION JURISDICTIONAL TRIBUNAL, I RESTRICT THE DISALLOWANCE AT 1% OF THE DIVIDEND INC OME. 5. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH REQUIRE NO FURTHER DELIBERATION ON BOTH COUNTS. IN THE LIGHT O F THE ABOVE WE DISMISS THE APPEAL FILED BY THE REVENUE. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE COURT ON 19.04.2013. SD/- SD/- [ .#! $'# , ] [ .., ,, , ] [MAHAVIR SINGH ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (4 4 4 4) )) ) DATE. 19.04.2013. R.G.(.P.S.) 6 1 /$$7 87)9- COPY OF THE ORDER FORWARDED TO: 1. M./S.EXIDE INDUSTRIES LIMITED, 59E, CHOWRINGHEE ROA D, KOLKATA-700020. 2 D.C.I.T., CIRLCE-1, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-I, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 07 /$/ TRUE COPY, 6'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES