DCIT Corporate Circle 2(2) , CHENNAI V. Indus Finance Corporation Limited , CHENNAI

ITA 1683/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5004 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 07-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: S SRIDHAR
• Section: 14A; 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY , JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 1683/MDS/2017 / ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(2), ROOM NO. 512, 5 TH FLOOR, WANAPARTHY BLOCK, 121 M.G. ROAD, CHENNAI 34, TAMILNADU. VS. M/S. INDUS FINANCE CORPORATION LIMITED, 4 TH FLOOR, KOTHARI BUILDING, 114, M.G. ROAD, NUNGAMBAKKAM, CHENNAI 600 034. [PAN: AAFCS 4074A] ( / APPELLANT) ( / RESPONDENT) ' ( / APPELLANT BY : SHRI. N. MADHAVAN, ADDL. CIT +,' ( / RESPONDENT BY : SHRI. S. SRIDHAR, ADVOCATE ( /DATE OF HEARING : 25.10.2017 ( /DATE OF PRONOUNCEMENT : 18.01.2018 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE REVENUE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI IN ITA NO. 121/C IT(A)-6/2015-16 DATED 26.04.2017 FOR ASSESSMENT YEAR 2012-13. :-2-: ITA NO. 1683/MDS/2017 2. M/S. INDUS FINANCE CORPORATION LIMITED, THE ASS ESSEE, IS ENGAGED IN NON-BANKING FINANCIAL SERVICES. IN THE ASSESSME NT MADE FOR ASSESSMENT YEAR 2012-13, THE AO DISALLOWED RS. 61,31,776/- U/S . 14A R.W.R. 8D UNDER NORMAL PROVISIONS OF THE ACT. WHILE COMPUTING THE INCOME U/S. 115JB, HE ADDED THE DISALLOWANCE MADE U/S. 14A R.W.R. 8D. AG GRIEVED, THE ASSESSEE FILED AN APPEAL. THE CIT(A) RELYING ON THE DECISIO N OF THIS TRIBUNAL IN THE CASE OF M/S. BEACH MINERALS COMPANY PVT. LTD. VS ACIT IN ITA NOS. 2110 & 2188/MDS/2010 DATED 06.08.2015, HELD THAT WHILE COM PUTING BOOK PROFIT OF THE COMPANY UNDER THE PROVISIONS OF SECTION 115JB O F THE ACT, ANY DISALLOWANCE MADE UNDER THE NORMAL PROVISIONS OF TH E ACT CANNOT BE GIVEN EFFECT TO FOR ARRIVING AT THE BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB AND ALLOWED THE APPEAL. 3. AGGRIEVED, THE REVENUE FILED THIS APPEAL WITH TH E FOLLOWING GROUNDS: 2.1 THE CIT(A) ERRED IN RELYING ON THE DECISION OF THE ITAT, CHENNAI IN THE CASE OF M/S. KARMEN INTERNATIONAL PVT. LTD., IN DIR ECTING THE AO TO LIMIT THE DISALLOWANCE U/S. 14A OF THE ACT, TO THE EXTENT OF EXEMPTED INCOME REPORTED. 2.2 THE CIT(A) ERRED IN DIRECTING THE AO TO LIMIT T HE DISALLOWANCE U/S. 14A TO THE EXTENT OF EXEMPTED INCOME REPORTED, WITHOUT CON SIDERING THE CBDTS NOTIFICATION NO. 43/2016 DATED 02.06.2016, WHICH EF FECT FROM 2/6/2016 ONWARDS (NOT ON EARLIER YEARS) 2.3 THE CIT(A) FAILED TO APPRECIATE THE FACT THAT T HE ABOVE SAID DECISION OF THE ITAT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AN D FURTHER APPEAL HAD BEEN FILED WHICH IS STILL PENDING. :-3-: ITA NO. 1683/MDS/2017 3.1 THE CIT(A) ERRED IN RELYING ON THE DECISION OF THE ITAT, CHENNAI IN THE CASE OF M/S. BEACH MINERALS COMPANY PRIVATE LIMITED VS ACIT IN ITA NO. 2110 & 2188/MDS/2010 DATED 06.08.2015 AND DELETED THE DI SALLOWANCE U/S. 14A OF THE ACT FOR THE COMPUTATION OF BOOK PROFIT U/S. 115 JB OF THE ACT. 3.2 THE CIT(A) FAILED TO APPRECIATE THE FACT THAT T HE ABOVE SAID DECISION OF THE ITAT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AN D FURTHER APPEAL HAD BEEN FILED WHICH IS STILL PENDING. 3.3 THE DEPARTMENTS APPEAL ON SIMILAR ISSUE IN THE CASE OF M/S. INDIAN BANK FOR AYS 2007-08, 2008-09, 2009-10 & 2010-11 WHICH I S STILL PENDING BEFORE THE HONBLE HIGH COURT VIDE TCA NO 929/2014. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE ASSESSING OF FICER BE RESTORED. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE MATERIALS. THE REVENUE IS ON APPEAL MAINLY ON THE GROUND THAT IT H AS FILED THE APPEAL AGAINST THIS TRIBUNAL ORDER, WHICH IS RELIED ON BY THE CIT( A), BEFORE THE JURISDICTIONAL HIGH COURT AND IT IS PENDING. SUBSEQUENT TO THE HE ARING, IT HAS COME TO OUR NOTICE THAT THE ITAT DELHI SPECIAL BENCH IN THE CAS E OF ACIT, CIRCLE 17(1), NEW DELHI VS VIREET INVESTMENT PVT LTD., IN ITA NO. 502 (DELHI) OF 2012 CO NO. 68 (DELHI) OF 2014 FOR ASSESSMENT YEAR 2008-09, DATED 16.06.2017, AFTER CONSIDERING THE DECISIONS OF THE HONBLE DELHI HIGH COURT TAKING DIVERSE VIEWS, FOLLOWING THE RATIOS LAID IN THE CASE OF CIT VS VEG ETABLE PRODUCTS LTD., 88 ITR 192 SC, HELD THAT THE COMPUTATION UNDER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2) IS TO BE MADE WITHOUT RESORTING TO COMPUTA TION AS CONTEMPLATED U/S. 14A R.W.R. 8D OF THE INCOME TAX RULES, 1962. FOLLO WING THE DELHI SPECIAL BENCH DECISION, AN ASSESSEES APPEAL IN ITA NO. 215 8/MDS/2017 DATED :-4-: ITA NO. 1683/MDS/2017 02.01.2018 WAS ALLOWED BY A CO-ORDINATE BENCH WHERE IN ONE OF US WAS A MEMBER. IN THE FACTS AND CIRCUMSTANCES, FOLLOWING THE DELHI SPECIAL BENCH DECISION, THE REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED ON THURSDAY, THE 18 TH DAY OF JANUARY, 2018 AT CHENNAI. SD/- ( . ' ) (DUVVURU RL REDDY) $ % /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) % /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 18 TH JANUARY, 2018 JPV ( +34 54 /COPY TO: 1. '/ APPELLANT 2. +,' /RESPONDENT 3. 6 ( )/CIT(A) 4. 6 /CIT 5. 4 + /DR 6. 9 /GF