ACIT CEN CIR 32, MUMBAI V. ACKRUTI CITY LTD, MUMBAI

ITA 1704/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3915 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 12-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: GOVIND JHAVERI
• Keywords: Deemed dividend; Tax effect
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI SANJAY ARORA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 1704/MUM/2014 ASSESSMENT YEAR: 2010-11 THE ACIT, CENTRAL CIRCLE - 32, ROOM NO. 32(3), GROUND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MARINE LINES, MUMBAI- 400020. VS. M/S. ACKRUTY CITY LTD. 6 TH FLOOR, AKRUTI TRADE CENTRE, ROAD NO. 7, MAROL, M.I.D.C, ANDHERI (E), MUMBAI- 400067. PAN- AAACA6101D (APPELLANT) (RESPONDENT) APPELLANT BY : MS. ARJU GARODIA. RESPONDENT BY : SHRI. GOVIND JHAVERI DATE OF HEARING: 04/05/2016 DATE OF PRONOUNCEMENT: 04/05/2016 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAI NST ORDER DATED 30/12/2013 PASSED BY LD CIT(A)-41, MUMBAI FOR THE ASSESSMENT Y EAR 2010-11. 2. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER O N FOLLOWING EFFECTIVE GROUNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 2(22 )(E) OF THE ACT HOLDING THAT THE LOAN RECEIVED BY THE ASSESSEE FROM ITS 10 0% SUBSIDIARY IS NOT IN THE MANNER OF DEEMED DIVIDEND THOUGH THE TOTAL ACCU MULATED PROFIT OF THE SUBSIDIARY DURING THE CURRENT YEAR IS RS. 18,90,32 4/-. 2 ITA NO. 1704/MUM/2014 ASSESSMENT YEAR: 2010-11 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE DEBENTURE REDEMPTI ON RESERVE IS NOT A RESERVE WITHIN THE MEANING OF EXPLANATION 1(B) O F SECTION 115JB OF THE ACT, 1961. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THIS CASE IS BELOW 10 LAKHS AND AS PER THE CBDT CIRCULAR NO. 21 OF 2015, DATED 10-12-2015, THE PRESENT APPEAL IS NOT MAINTAI NABLE. THE LD. COUNSEL ALSO PLACED ON RECORD A CALCULATION SHEET, AS PER WHICH THE TOTAL TAX EFFECT ON ADDITION UNDER SECTION 2(22)(E) OF THE INCOME TAX A CT, 1961(IN SHORT THE ACT.) COMES TO RS. 6,40,820/-. 4. THE LD. COUNSEL FURTHER SUBMITTED THAT THE GROUN D NO.2 PERTAINS TO COMPUTATION OF BOOK PROFIT, AND THE TAX EFFECT THER EOF IS IRRELEVANT BECAUSE AS PER ASSESSMENT ORDER DATED 05/03/2013 PASSED U/S 14 3(3) OF THE ACT, THE TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT IS H IGHER THAN THE TAX PAYABLE U/S 115JB OF THE ACT. 5. THE LD. DR FAIRLY CONCEDED THAT THE TAX EFFECT IN DEPARTMENTS APPEAL IS BELOW 10 LAKHS. WE FIND THAT THE ISSUE RAISED IN APPEAL D OES NOT FALL UNDER ANY OF THE EXCEPTIONS SPECIFIED IN PARA 8 OF THE CIRCULAR. SIN CE, IT HAS BEEN SPECIFICALLY CLARIFIED IN THE CIRCULAR AFORESAID THAT THE INSTRU CTION WILL APPLY RETROSPECTIVELY TO ALL THE PENDING APPEALS, THE PRESENT APPEAL FILE D BY THE REVENUE IS NOT MAINTAINABLE. WE, THEREFORE, DISMISS THE APPEAL IN LIMINE . ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MAY, 2016 3 ITA NO. 1704/MUM/2014 ASSESSMENT YEAR: 2010-11 SD/- SD/- ( SANJAY ARORA ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 04/05/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA