JCIT (OSD), LTU-2, CHENNAI V. M/s Shree Ambika Sugars Ltd., CHENNAI

ITA 1764/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5691 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 06-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D; Set aside
• Section: 64

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , , $ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1764/CHNY/2019 /ASSESSMENT YEAR: 2010-11 THE JT. COMMISSIONER OF - INCOME TAX (OSD), LARGE TAXPAYER UNIT-2, ROOM NO.711, 7 TH FLOOR, WANAPARTHY BLOCK, NO.121, M.G.ROAD, CHENNAI-600 034. VS. M/S.SHREE AMBIKA - SUGARS LTD., ELDORADO, 5 TH FLOOR, 112, MAHATMA GANDHI ROAD, CHENNAI-600 034. [PAN: AABCS 5163 J ] ( & /APPELLANT) ( '(& /RESPONDENT) DEPARTMENT BY : MR. ARUNRAJ, JCIT ASSESSEE BY : MR. SAROJ KUMAR PARIDA, ADV. * /DATE OF HEARING : 25.09 .201 9 * / DATE OF PRONOUNCEMENT : 27 . 0 9 .201 9 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THE REVENUE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-10, CHENNAI, I N ITA NO.266/16-17/CIT(A)-10(TR.) DATED 29.03.2019 FOR TH E AY 2010-11. ITA NO.1764/CHNY/2019 :- 2 -: 2. M/S.SHREE AMBICA SUGARS LTD., THE ASSESSEE IS MA NUFACTURER OF SUGAR-CUM-GENERATION OF POWER AND DISTILLERIES. WH ILE MAKING THE RE-ASSESSMENT U/S.143(3) R.W.S.147 OF THE ACT FOR T HE AY 2010-11, THE AO ADDED THE DISALLOWANCE MADE U/S.14A R.W.R.8D TO THE BOOK PROFITS. 3. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL BEFORE THE LD.CIT(A) CONTENDING THAT WHILE COMPUTIN G THE BOOK PROFITS U/S.115JB NO OTHER ADJUSTMENTS CAN BE MADE TO THE BOOK PROFITS U/S.115JB OTHER THAN THOSE LISTED IN EXPLAN ATION-1 TO SEC.115JB AND THEREFORE, THE AO HAS NO POWER TO MAKE ADJUSTMENT U/S.115JB WITH RESPECT TO THE DISALLOWANCE MADE U/S. 14A. THE LD.CIT(A) FOLLOWED THE DECISION OF THE SPECIAL BENCH OF THE DELHI TRIBUNAL IN THE CASE OF ACIT V. VIREET INVESTMENT ( P) LTD., REPORTED IN [2017] 82 TAXMANN.COM 415 AND HELD THAT THE DIS ALLOWANCE MADE U/S.14A CANNOT BE ADDED IN THE BOOK PROFITS U/ S.115JB. THEREFORE, HE DIRECTED THE AO TO DELETE THE ADDITIO N. 4. AGGRIEVED AGAINST THAT ORDER, THE REVENUE FILED THIS APPEAL WITH THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.1764/CHNY/2019 :- 3 -: 2.1 THE LEARNED CIT(A) HAS ERRED AND HELD THAT THE DISALLOWANCE U/S.14A CANNOT BE ADDED IN THE BOOK PROFIT U/S.115JB OF THE IT. ACT. 2.2 THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE RULING IN THE CASE OF DCIT, CENTRAL CIRCLE 18 AND 19, MUMBAI VS. VIRAJ PROFILES LIMITED IN 64 TAXMANN.COM 52(2015) (MUMBAI-TRIB) WHEREIN IT WAS HELD THAT AO HAS RIGHTLY DISALLOWED THE EXPENDITURE U/S.14A OF THE ACT READ WITH RULE 8D OF THE INCOME TAX RULES FOR COMPUTING BOOK PROFIT U/S.115JB(2) OF THE ACT READ WITH CLAUSE (F) TO EXPLANATION 1 TO SECTION 115JB(2) OF THE ACT. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE LD.DR PRESENTED THE CASE ON THE LINES OF THE GROUNDS OF APPEAL. PER CONTRA, THE LD.AR SUPPORTED THE ORDER OF THE LD.CIT(A). 6. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIALS. SINCE, THE LD.CIT(A) FOLLOWED THE DECISION OF THE S PECIAL BENCH OF THE DELHI TRIBUNAL IN THE CASE OF ACIT V. V IREET INVESTMENT (P) LTD., SUPRA, WE DO NOT FIND ANY REASON TO INTER FERE WITH THE ORDER OF THE LD.CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THE 27 TH DAY OF SEPTEMBER, 2019, IN CHENNAI. SD/ - SD/ - ( ) (GEORGE MATHAN) /JUDICIAL ( . ) (S. JAYARAMAN) /ACCOUNTANT ITA NO.1764/CHNY/2019 :- 4 -: /CHENNAI, / /DATED: 27 TH SEPTEMBER, 2019. TLN * '01 21 /COPY TO: 1. & /APPELLANT 4. 3 /CIT 2. '(& /RESPONDENT 5. 1 ' /DR 3. 3 ( ) /CIT(A) 6. /GF