I T C Limited, Kolkata V. DCIT, Circle - 8, Kolkata

ITA 1771/KOL/2009

• Counselvise Citation: 177123514 RSA 2009
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: B K SEAL
• Keywords: Earning of tax free income
• Section: 14A; 37(1); 6

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . . . . . , ,, , , ,, , . . . . . .. . ! ! ! ! , ' ' ' ' ] [BEFORE HONBLE SHRI B. R. MITTAL, JM & HONBLE SHRI S.V. MEHROTRA, AM] #$ #$ #$ #$ / I.T.A NO. 1771/KOL/2009 %& '() %& '() %& '() %& '()/ // / ASSESSMENT YEAR : 2004-05 I.T.C. LIMITED -VS.- DY. COMMISSIONER OF INCOME T AX KOLKATA [PAN : AAACI 5950 L] CIRCLE-8, KOLKATA. [ +, +, +, +, /APPELLANT ] ]] ] [ ./+, ./+, ./+, ./+,/ // / RESPONDENT ] ]] ] +, +, +, +, / FOR THE APPELLANT : S/SHRI KANCHAN KAUSHAL & B.K. SEAL ./+, ./+, ./+, ./+, / FOR THE RESPONDENT : SHRI P. S. DUTTA 0 /ORDER . . . . . .. . ! ! ! ! , ' ' ' ' PER S. V. MEHROTRA, A. M. THE ASSESSEE HAS PREFERRED THIS APPEAL FOR ASSESSM ENT YEAR 2004-05 AGAINST ORDER OF LD. CIT(A)-VI DATED 07.09.2009. 2. THE ASSESSEE-COMPANY, IN THE RELEVANT ASSESSMENT YEAR, WAS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF CIGARETTES, BUYING, PROCESS ING AND SELLING OF TOBACCO, RUNNING HOTELS, PACKAGING & PRINTING, PAPER, POWER, EXPORTS ETC. T HE FACTS AS OBTAINING FROM STATEMENT OF FACTS FILED BEFORE LD. CIT(A) ARE THAT THE RETURN OF INCO ME WAS FILED ON 30.10.2004 AND SCRUTINY ASSESSMENT WAS COMPLETED ON 22.12.2006. THE APPEAL WAS DECIDED BY LD. CIT(A) VIDE HIS ORDER DATED 08.05.2007. THEREAFTER, ASSESSEE-COMPANY FILE D APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL DECIDED THE APPEAL VIDE ITA NO.1486/KOL/2007 DATED 10.10.2007. THE TRIBUNALS ORDER IS CONTAINED AT PAGES 84 TO 92 OF THE PAPER BOOK. ASSE SSING OFFICER PASSED THE ORDER UNDER SECTION 254/251/143(3) OF THE ACT ON 06.05.2008 TO GIVE EFF ECT TO THE TRIBUNALS ORDER. BEING AGGRIEVED WITH THE SAID ORDER, ASSESSEE PREFERRED APPEAL BEFO RE LD. CIT(A) WHO PARTLY ALLOWED THE ASSESSEES APPEAL. 3. STILL AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE U S. ITA NO. 1771/KOL/2009 2 4. THE ONLY GROUND RAISED BY THE ASSESSEE IS AS UND ER :- (1) EXPENDITURE ON STAFF WELFARE DISALLOWED UNDER SECTI ON 40A(9) : RS.16,54,138/- FOR THAT THE LD. CIT(A) ERRED IN DISALLOWING EXPEN DITURE FOR STAFF WELFARE UNDER SECTION 40A(9). FOR THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT GENUINE EXPENDITURE FOR STAFF WELFARE IS FULLY ALLOWABLE UNDER THE INCOME TAX ACT . RELIEF PRAYED : THE DISALLOWANCE OF RS.16,54,138/- SHOULD BE DELET ED. 5. ASSESSING OFFICER DISALLOWED A SUM OF RS.21,04,1 38/- UNDER SECTION 40A(9) ON ACCOUNT OF CONTRIBUTION TO STAFF CLUBS, EMPLOYEE COOPERATIVE A ND EMPLOYEE PUJA/SPORTS COMMITTEES WHICH HAD BEEN CLAIMED UNDER SECTION 37(1) OF THE ACT. TH E TRIBUNAL HAS OBSERVED AS UNDER :- BRIEF FACTS IN THIS CASE ARE THAT THE A.O. DISALLO WED A SUM OF RS.21.04,138/- ON ACCOUNT OF CONTRIBUTION TO STAFF CLUBS, EMPLOYEE CO-OPERATIVE AND EMPLOYEE PUJA/ SPORTS COMMITTEES WHICH HAD BEEN CLAIMED AS DEDUCTION UNDER SECTION 37(1) OF THE ACT. THE TAX AUDITORS HA D IDENTIFIED THE SAID EXPENSES AS FALLING WITHIN THE AMBIT OF SECTION 40A(9) BUT H AD STARED SUCH EXPENDITURE TO BE ALLOWABLE IN ACCORDANCE WITH THE DECISION OF THE HONBLE CALCUTTA TRIBUNAL IN THE CASE OF DCIT VS. CHLORIDE INDUSTRIES LTD. REPOR TED IN 76 ITO I. THE ID. CIT(A) ALSO CONFIRMED THE DISALLOWANCE MADE BY THE A.O. AT THE TIME OF BEARING, IT WAS BROUGHT TO THE NOTICE OF THE BENCH THAT THIS ISSUE HAD COME UP BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 1781/KO1/2004 FOR THE ASSESSMENT YEAR 2001-02 AND ITA NOS. 59. 667 & 788/ KOL./2004 FOR THE ASSESSMENT YEARS 1998-99. 1999-2000 AND 2000-01 WHE REIN THE HONBLE TRIBUNAL HAD RESTORED THE ISSUE TO THE FILE OF THE A .0. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE EAR LIER ORDERS OF THIS TRIBUNAL. WE FIND THAT SINCE THE TRIBUNAL HAD RESTO RED THE ISSUE TO THE FILE OF A.O. IN EARLIER YEARS, THEREFORE, BY RESPECTFULLY FOLLOW ING THE SAME WE ALSO RESTORE THE MATTER BACK TO THE FILE OF A.0. TO DECIDE THE SAME AFRESH. WE HOLD AND DIRECT ACCORDINGLY AND ALLOW THE GROUND FOR STATISTICAL PU RPOSES. ASSESSING OFFICER MERELY OBSERVED THAT THE DEPARTME NT HAS FILED APPEAL BEFORE THE HONBLE HIGH COURT ON THIS ISSUE AND, THEREFORE, THESE ISSUES WI LL BE TAKEN IN ACCORDANCE WITH THE DECISION OF HONBLE HIGH COURT. LD. CIT(A) AFTER CONSIDERING TH E PROVISIONS OF SECTION 40A(9) HELD ONLY RS.4,50,000/- CAME UNDER THE EXCEPTION PROVIDED UND ER SECTION 40(A(9) WHICH RELATED TO PAYMENT MADE TO I.T.C. WORKMEN WELFARE SCHEME. THIS WAS FOR SPECIFIC WELFARE SCHEME OF EMPLOYEES WHICH HAD DIRECT NEXUS WITH THE BUSINESS OF ASSESSE E-COMPANY. HE, THEREFORE, ALLOWED RELIEF TO THE ITA NO. 1771/KOL/2009 3 EXTENT OF RS.4,50,000/- AND DISALLOWED BALANCE AMOU NT OF RS.16,54,158/-. 6. LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE REFERRED TO TRUIBUNALS ORDER VIDE ITA NO.475 & 476/KOL/2010 FOR ASSESSMENT YEAR 2005-06 C ONTAINED AT PAGES 1 TO 22 OF THE PAPER BOOK AND REFERRED TO PARA 8 AT INTERNAL PAGE 6 OF THE SA ID ORDER AND POINTED OUT THAT THE FACTS IN THE PRESENT ASSESSMENT YEAR ARE IDENTICAL TO THE FACTS AS OBTAINING IN ASSESSMENT YEAR 2005-06. HE REFERRED TO LETTER DATED 08.07.2010 FILED BY ASSESS EE ALONGWITH WHICH ASSESSEE FURNISHED A DETAILED NOTE ON THE NATURE OF ACTIVITIES UNDERTAKEN BY THE RESPECTIVE EMPLOYEES ASSOCIATION AS PER DIRECTION OF THE BENCH ON 05.05.2010. LD. COUNSEL SUBMITTED THAT IN VIEW OF THE DECISION OF TRIBUNAL FOR ASSESSMENT YEAR 2005-06 EXCEPT PAYMENT MADE TO TRIBENI TISSUES CO-OPERATIVE STORES LTD. OF RS.23,800/-, BALANCE AMOUNT IS ALLOW ABLE. LD. COUNSEL FURTHER SUBMITTED THAT SECTION 40A(9) REFERS, INTER ALIA, TO VOLUNTARY CON TRIBUTION AND NOT SUCH PAYMENT WHICH WERE PAID IN TERMS OF TRIPARTITE AGREEMENT. LD. COUNSEL FURTH ER SUBMITTED THAT THE DEPARTMENT HAS NOT FILED ANY APPEAL AGAINST THE TRIBUNALS ORDER FOR 2005-06 BEFORE HONBLE HIGH COURT. THEREFORE, THIS ISSUE IS TO BE DECIDED IN TERMS OF FINDINGS OF THE TRIBUNAL. 7. HAVING HEARD BOTH THE PARTIES, WE FIND THAT THE ASSESSING OFFICER DID NOT DECIDE THE ISSUE AS THE APPEAL FOR EARLIER YEARS ARE PENDING BEFORE THE HONBLE HIGH COURT. HOWEVER, FOR ASSESSMENT YEAR 2005-06, TRIBUNAL HAS DECIDED THE I DENTICAL ISSUE AGAINST WHICH NO APPEAL HAS BEEN FILED BY THE DEPARTMENT. IT IS TRUE THAT TRIBU NAL HAD RESTORE THE MATTER TO ASSESSING OFFICER FOLLOWING THE DECISION FOR ASSESSMENT YEARS 2001-02 AND 1998-99, 1999-2000 AND 2000-01 BUT FOR ASSESSMENT YEAR TRIBUNAL 2005-06 HAS DECIDED THE IS SUE AS ASSESSEE HAD FURNISHED THE NECESSARY DETAILS. FOR THE PRESENT ASSESSMENT YEAR ALSO THE A SSESSEE HAD FURNISHED THE DETAILS AND, THEREFORE, FACTS ARE IDENTICAL TO ASSESSMENT YEAR 2005-06. THE REFORE, THIS ISSUE NEEDS TO BE DECIDED IN ACCORDANCE WITH THE TRIBUNALS FINDINGS FOR ASSESSM ENT YEAR 2005-06 WHICH ARE REPRODUCED HEREUNDER :- WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF TH E LD. REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BE LOW. WE HAVE ALSO GONE THROUGH THE DETAILS OF THE EXPENDITURE AGGREGATING RS.9,00, 111 CLAIMED BY THE ASSESSEE, THE BREAK-UP OF WHICH HAS ALREADY BEEN MENTIONED HE REINABOVE. WE OBSERVE THAT THE ASSESSEE HAS MADE THE CONTRIBUTION TO STAFF CLU B/ RECREATION CLUB OF ITS EMPLOYEES. ON PERUSAL OF THE DETAILS, IT IS OBSERVE D THAT THE SAID AMOUNTS WERE REIMBURSED BY THE ASSESSEE FOR SALARY OF THE STAFFS EMPLOYED AT THE CLUB, MAINTENANCE OF LIBRARY AT THE CLUB, EXPENSES FOR MA INTENANCE OF INDOOR GAME SECTION EXPENSES FOR CONDUCT OF SPORTS COMPETITION AND THEIR FAMILIES, ITA NO. 1771/KOL/2009 4 REIMBURSEMENT OF EXPENSES TOWARDS ELECTRICITY, EXPE NSES INCURRED ON PROVIDING CULTURAL RECREATION TO THE MEMBERS/ CULTURAL EVENTS , EXPENSES FOR ORGANIZING FETE FOR THE MEMBERS/ FAMILIES OF ASSESSEES EMPLOYEES, EXPENSES INCURRED ON ORGANIZING CULTURAL EVENTS ON DIFFERENT OCCASIONS, ANNUAL SOCIAL MEETS OF THE EMPLOYEES/ THEIR FAMILIES, ETC., EXCEPT DIRECT SUBS CRIPTION MADE TO ONE COOPERATIVE SOCIETY OF RS.25,800/-. CONSIDERING THE FACTS OF THE CASE, WE DO AGREE WITH THE ASSESSEE THAT IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAS FILED THE DETAILS OF THE EXPENSES REIM BURSED TO THE RECREATION CLUBS/ ORGANIZATIONS/ SOCIETIES OF THE EMPLOYEES AND THEIR FAMILIES AND IT WAS NOT AN EXPENDITURE INCURRED BY THE ASSESSEE TOWARDS SETTIN G UP FORMATION OR GIVING DIRECT CONTRIBUTION TO A FUND, TRUST, COMPANY, ASSO CIATION OF PERSONS, BODY OF INDIVIDUALS, SOCIETY REGISTERED UNDER SOCIETIES RE GISTRATION ACT, 1860 (EXCEPT TO ONE CONTRIBUTION OF RS.25,800/- AS MENTIONED HEREIN ABOVE), BUT THE REIMBURSEMENT IS OF THE EXPENDITURE ACTUALLY INCURR ED FOR THE WELFARE ACTIVITIES OF THE EMPLOYEES AND THEIR FAMILIES. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE STAFF RECREATION CLUB AND STAFF CLUB FOR WHICH THE ASSESSEE HAS INCURRED THE EXPENSES ARE FOR THE WELFARE OF ITS EMPLOYEES DUE T O BUSINESS EXPEDIENCY. STAFF RECREATION CLUB AND STAFF CLUB ARE A PART AND PARCE L OF THE ORGANIZATION ITSELF. CONSIDERING THE EARLIER DECISION OF ITAT, KOLKATA I N THE CASE OF CHLORIDE INDUSTRIES LTD. (SUPRA) AND ALSO THE FACT THAT THE ASSESSEE HAS GIVEN THE BREAK-UP OF THE EXPENSES INCURRED/ REIMBURSED, AS MENTIONED HEREINABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE PROVISIONS OF SECTION 40A( 9) OF THE ACT ARE NOT ATTRACTED FOR A SUM OF RS.8,74,311/- AND THE SAID EXPENDITURE IS ALLOWABLE UNDER SECTION 37(1) OF THE ACT. THEREFORE, WE ALLOW GROUND OF APP EAL TAKEN BY THE ASSESSEE IN PART BY RESTRICTING THE DISALLOWANCE TO RS.25,800/- AND BY DELETING THE SUM OF RS.8,74,311/- OUT OF RS.9,00,111/-. THE DETAILS SUBMITTED BY THE ASSESSEE VIDE ITS LETT ER DATED 08.07.2010 HAVE NOT BEEN CONSIDERED BY THE ASSESSING OFFICER IN THE LIGHT OF THE TRIBUNAL S ORDER NOTED ABOVE. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER TO DECIDE TH E SAME IN TERMS OF TRIBUNALS FINDINGS NOTED ABOVE AFTER PROVIDING OPPORTUNITY TO THE ASSESSEE I N ACCORDANCE WITH LAW. IN THE RESULT, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 8. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND VI DE ITS PETITION DATED 14.09.2010 WHICH READS AS UNDER :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) MAY PLEASE BE DIRECTED TO RE-EXAMINE THE GROUND ON DISALLOWANCE O F PROPORTIONATE MANAGEMENT EXPENSES WITH RESPECT TO EARNING OF EXEMPTED INCOME U/S. 14A READ WITH RULE 8D AGGREGATING TO RS.3,44,31,452/-, IN THE LIGHT OF TH E PRINCIPLES LAID DOWN BY THE RECENT DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. GODREJ & BOYCE MFG. LTD. VS. DCIT (WP NO.758 OF 2008), WHICH WAS DELIVERED SUBSEQUENT TO THE DISPOSAL OF THE IMPUGNED APPEAL B Y THE LD. CIT(A), WHEREIN IT WAS HELD THAT RULE 8D IS APPLICABLE PROSPECTIVELY O N AND FROM THE ASSESSMENT YEAR 2008-09; AND NOT RETROSPECTIVELY. ITA NO. 1771/KOL/2009 5 9. IN THE PETITION ASSESSEE HAS SUBMITTED THAT THIS ISSUE WAS NOT INITIALLY AGITATED BY THE COMPANY AS PART OF THE APPEAL FILED WITH I.T.A.T. IN VIEW OF AN ADVERSE DECISION OF SPECIAL BENCH OF THE TRIBUNAL. HOWEVER, THE SAID DECISION HAS BEE N OVER RULED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. VS. DCIT 328 ITR 81, WHICH WAS DELIVERED SUBSEQUENT TO THE DISPOSAL OF THE IMPUGNED APPEAL BY THE LD. CIT( A). THE ASSESSEE HAS FURTHER REVISED THIS ADDITIONAL GROUND VIDE ITS LETTER DATED 11.07.2011 AS UNDER :- THE COMPANY CRAVES LEAVE OF THE HONBLE TRIBUNAL TO REVISE THE SAID ADDITIONAL GROUND, NAMED AS REVISED ADDITIONAL GROUND (ATTACHE D IN TRIPLICATE UNDER THE COVER OF THIS LETTER) RELATING TO THE DISALLOWANCE OF PROPORTIONATE MANAGEMENT EXPENSE U/S. 14A OF THE ACT AMOUNTING TO AROUND 3.5 % OF THE EXEMPT INCOME. IN THIS CONNECTION, THE APPELLANT SUBMITS THE FOLLOWIN G: 1. THE REVISED ADDITIONAL GROUND DOES NOT INVOLVE A NY INVESTIGATION INTO FRESH FACTS AND FIGURES AS THE ENTIRE RECORDS IN CONNECTI ON THERETO ARE ALREADY AVAILABLE BEFORE THE LOWER AUTHORITIES. 2. THE DISALLOWANCE OF RS.3,54,34,452/- BEING ON AC COUNT OF PROPORTIONATE MANAGEMENT EXPENSES INCURRED IN CONNECTION WITH EAR NING OF EXEMPT INCOME EFFECTIVELY WORKS OUT TO 3.5% OF THE EXEMPT INCOME. THIS DISALLOWANCE THOUGH CHALLENGED BEFORE THE LD. C1T(APPEALS) WAS NOT PRES SED BEFORE HIM IN THE COURSE OF HEARING SINCE THE APPELLANT COMPANY WAS O F THE VIEW THAT THE LD. CIT(APPEALS) COULD HAVE APPLIED THE PRINCIPLE LAID DOWN BY THE HONBLE SPECIAL BENCH IN THE CASE OF ITO V DAGA CAPITAL MANAGEMENT PVT. LIMITED REPORTED IN 117 ITD 169, WHICH WAS IN FORCE AT THAT TIME AND AP PLIED RULE 8D TO ENHANCE THE DISALLOWANCE TO HIGHER AMOUNT. 3. SUBSEQUENT TO THE DECISION OF THE LD.C1T(APPEALS ) IN THE CASE OF THE APPELLANT, THE JURISDICTIONAL TRIBUNAL IN THE CASE OF EIH ASSOCIATED HOTELS LTD VS. DCIT REPORTED IN 126 TTJ 246 AND SAGARIKA GOODS AND SERVICES LIMITED VS ITO (ITA 1278/KOL/2010 - DT 24-09-2010 - KOL) HAD RESTR ICTED THE DISALLOWANCE MADE BY ASSESSING OFFICER ON AN ESTIMATE BASIS TO 1 % OF THE EXEMPT INCOME. 4. THE LD.CIT(APPEALS) IN AY 2006-07 AND IN SUBSEQU ENT YEARS, IN APPELLANTS OWN CASE HAD RESTRICTED THE DISALLOWANCE ON ACCOUNT OF PROPORTIONATE MANAGEMENT EXPENSES IN CONNECTION WITH EARNING OF E XEMPT INCOME TO 1% BY FOLLOWING THE AFOREMENTIONED DECISIONS OF THE JURIS DICTIONAL TRIBUNAL. 5. THIS REVISED ADDITIONAL GROUND MAY PLEASE BE ADM ITTED IN LINE WITH THE PRINCIPLE LAID DOWN BY THE MADRAS HIGH COURT IN THE CASE OF CIT VS. TAMILNADU TOURISM DEV CORPORATION LTD REPORTED IN 288 ITR 146 AND THE HONBLE PUNE TRIBUNAL IN THE CASE OF MARUTI CIVIL WORKS, AHMEDAN GAR VS. ITO, WARD-2, AHMEDNAGAR REPORTED IN 2011-(ID1)-GJX-0337-TPUN, WH EREIN IT WAS HELD THAT GROUNDS WHICH WERE NOT PRESSED BY THE APPELLANT BEF ORE THE LD.C1T(APPEALS) AND THEREBY NOT EXAMINED ON MERITS COULD BE TAKEN B EFORE THE HONBLE TRIBUNAL BY WAY OF AN ADDITIONAL GROUND AND RESTORED BACK TO THE LD.C1T(APPEALS) FOR ITA NO. 1771/KOL/2009 6 EXAMINATION ON MERITS. IN VIEW OF THE AFORESAID SUBSEQUENT DEVELOPMENTS, T HE HONBLE MEMBERS ARE MOST HUMBLY REQUESTED TO PLEASE ADMIT THE REVISED A DDITIONAL GROUND AND RESTORE THE MATTER TO THE LD..CIT(APPEALS) TO BE EX AMINED AND DISPOSED ON MERITS AFTER CONSIDERING THE DECISION OF THE JURISDICTIONA L TRIBUNAL MENTIONED ABOVE. ACCORDINGLY, THE COMPANY PLACES THE REVISED ADDITIO NAL GROUND BEFORE THE HONBLE BENCH WITH A REQUEST FOR ADMISSION AND ADJU DICATION, AS GROUND NO.2 AFTER GROUND NO.1 IN THE FORM NO.36 FILED ON 17TH O CTOBER 2009. THE ADDITIONAL GROUND FILED UNDER COVER OF LETTER DATED 14TH SEPTE MBER 2010 THUS STANDS REVISED. THE GROUND NO.2 IN THE ORIGINAL FORM 36 MAY PLEASE BE TREATED AS BEING RENUMBERED AS GROUND NO.3. LD. COUNSEL HAS ALSO RELIED ON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. MAHALAKSHMI TEXTILES MILLS LTD. [1967] 66 ITR 710 ( SC) WHEREIN HONBLE SUPREME COURT HAS OBSERVED AT PAGE 713 AS UNDER :- ..UNDER SUBSECTION (4) OF SECTION 33 OF THE IND IAN INCOME-TAX ACT, 1922, THE APPELLATE TRIBUNAL IS COMPETENT TO PASS S UCH ORDERS ON THE APPEAL AS IT THINKS FIT. THERE IS NOTHING IN THE INCOME-TAX ACT WHICH RESTRICTS THE TRIBUNAL TO THE DETERMINATION OF QUESTIONS RAISED B EFORE THE DEPARTMENTAL AUTHORITIES. ALL QUESTIONS WHETHER OF LAW OR OF FAC T WHICH RELATE TO THE ASSESSMENT OF THE ASSESSEE MAY BE RAISED BEFORE THE TRIBUNAL: IF FOR REASONS RECORDED BY THE DEPARTMENTAL AUTHORI TIES IN REJECTING A CONTENTION RAISED BY THE ASSESSEE, GRANT OF RELIEF TO HIM ON A NOTHER GROUND IS JUSTIFIED, IT WOULD BE OPEN TO THE DEPARTMENTAL AUTHORITIES AND T HE TRIBUNAL, AND INDEED THEY WOULD BE UNDER A DUTY, TO GRANT THAT RELIEF. T HE RIGHT OF THE ASSESSEE TO RELIEF IS NOT RESTRICTED TO THE PLEA RAISED BY HIM. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORDS OF THE APPEAL. WE FIND THAT IDENTICAL ISSUE HAS BEEN D EALT BY TRIBUNAL IN ASSESSMENT YEAR 2005-06 OBSERVING IN PARA 12 AT PAGE 8 OF THE TRIBUNALS OR DER VIDE ITA NO.475 & 476/KOL/2010 DATED 10.06.2011 OF THE PAPER BOOK WHICH IS REPRODUCED HE REUNDER :- WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BE LOW. WE HAVE ALSO CONSIDERED THE CASES CITED BY LD. A.R. IN SUPPORT OF HIS SUBMI SSION. CONSIDERING THE FACTS OF THE CASE THAT THE ASSESSING OFFICER MADE PROPORTION ATE DISALLOWANCE WHILE CONSIDERING THE EXEMPTED INCOME OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION FOR THE PURPOSE OF SECTION 14A OF THE INCOME TAX ACT, HE DID NOT CONSIDER RULE 8D OF THE INCOME TAX RULE. WE AGREE W ITH LD. AR THAT RULE 8D IS NOT APPLICABLE TO THE ASSESSMENT YEAR UNDER CONSIDE RATION. IT IS ALSO A FACT THAT THE ASSESSEE DID NOT PRESS FOR THIS GROUND BEFORE LD. C IT(APPEALS) AND ADMITTED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THEREFO RE, THE PLEA TAKEN BY LD. A.R. THAT THE ASSESSEE DID NOT DISPUTE THIS GROUND BECAUSE OF RULE 8D AND THE DECISION OF SPECIAL BENCH, ITAT, MUMBAI IN THE CASE OF DAGA CAPITAL ITA NO. 1771/KOL/2009 7 MANAGEMENT PVT. LTD. HAS NO SUBSTANCE. THERE IS NO SUCH SUBMISSION OF THE ASSESSEE BEFORE LD. CIT(APPEALS) THAT THE ASSESSEE DID NOT TO WANT AGITATE THE MATTER IN VIEW OF THE DECISION OF ITAT, SPECIAL BEN CH, MUMBAI. IT IS OBSERVED THAT THE ASSESSEE, FOR THE REASONS BEST KNOWN TO HI M, ACCEPTED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE INCOME TAX ACT. CONSIDERING THE ABOVE FACTS, WE AGREE WITH LD. D.R. THAT CASES RELIED UPON BY LD. A.R. ARE NOT APPLICABLE TO THE FACTS OF THE CASE BE FORE US. ON CONSIDERING THE FACTS, WE OBSERVE THAT IT IS NOT A LEGAL ISSUE, WHI CH THE ASSESSEE HAS AGITATED BEFORE US. ON THE OTHER HAND, THE ASSESSEE WANTS TO RE-AGITATE THE ISSUE WHICH HAD BEEN SETTLED AT THE END OF LD. CIT(APPEALS) BY ACCE PTING THE DISALLOWANCE MADE BY ASSESSING OFFICER. WE AGREE WITH LD. D.R. THAT I F THE ASSESSEE IS ALLOWED TO RE- AGITATE THE SAME ISSUE, WHICH HAS BEEN CONCEDED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW, THERE IS NO END TO A DISPUTE. CO NSIDERING THE ABOVE FACTS, WE REJECT THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE. IN VIEW OF ABOVE FINDINGS, WE REJECT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 0 0 0 0 '1 '1 '1 '1 2 1% 3 4 2 1% 3 4 2 1% 3 4 2 1% 3 4 5' 5' 5' 5' ORDER PRONOUNCED IN THE COURT ON 08. 09. 2011. SD/- SD/- [ . . . . . . . . , ,, , ] [ . . . . . .. . ! ! ! ! , ' ' ' ' ] [ B. R. MITTAL ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (5' 5' 5' 5') )) ) DATED : 08 TH SEPTEMBER, 2011. 0 8 .9 :9(/ COPY OF THE ORDER FORWARDED TO: 1. +, /APPELLANT : I.T.C. LIMITED, TAXATION DEPARTMENT, 37, J.L. NEHRU ROAD, KOLKATA-700 071. 2 ./+, / RESPONDENT : DY. COMMISSIONER OF INCOME TAX, CIR CLE-8, P-7, CHOWRINGHEE SQA URE, KOLKATA-700 069. 3. 0 - % / CIT, 4. 0% ()/ CIT(A), KOLKATA. 5. '3 .%/ DR, KOLKATA BENCHES, KOLKATA [/9 ./ TRUE COPY] 0%1/ BY ORDER, #A /ASSTT REGISTRAR [KKC 'BC %DA E' /SR.PS]