DCIT 5(2), MUMBAI V. JYOTI CERAMIC INDUSTRIES P.LTD, MUMBAI

ITA 1981/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92903 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 12-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PAWAN KUMAR BIRLA
• Section: 43B; 14A

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 3005/MUM/ 2013 ( / ASSESSMENT YEAR : 2008-2009 JYOTI CERAMIC INDUSTRIES PVT. LTD., B-603, PARLE UDYAN CO-OP HSG. SOC. LTD., 25, PARK ROAD, VILE PARLE (EAST), MUMBAI 400 057. / VS. ADDL. COMMISSIONER OF INCOME TAX 5(2), 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 20. ./ PAN : AAACJ0247P ( / APPELLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO. 1981/MUM/ 2013 ( / ASSESSMENT YEAR : 2008-2009 ADDL. COMMISSIONER OF INCOME TAX 5(2), 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 20. / VS. JYOTI CERAMIC INDUSTRIES PVT. LTD., B-603, PARLE UDYAN CO- OP HSG. SOC. LTD., 25, PARK ROAD, VILE PARLE (EAST), MUMBAI 400 057. ./ PAN : AAACJ0247P ( / APPELLANT ) .. ( / RESPONDENT ) A SSESSEE BY SHRI K. GOPAL R E VENUE BY : SHRI PAWAN KUMAR BIRLA / DATE OF HEARING : 15-06-2015 / DATE OF PRONOUNCEMENT : 15-06-2015 [ ITA 3005 & 1981/M/13 2 !' / O R D E R PER B.R. BASKARAN, A.M. THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 06-12-2012 PASSED BY THE LD. CIT(A) 9, MUMBAI AND THEY RELAT E TO THE A.Y. 2008-09. 2. THE COMMON ISSUE CONTESTED BY BOTH THE PARTIES R ELATES TO THE DISALLOWANCE MADE U/S 14A OF THE INCOME TAX ACT, 19 61. 3. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSES SEE SUBMITTED THAT THE ASSESSEE IS HAVING SUFFICIENT OWN FUNDS AND THE INV ESTMENTS HAVE BEEN MADE OUT OF OWN FUNDS ONLY. HENCE, THERE WAS NO REQUIREM ENT OF MAKING ANY DISALLOWANCE U/S 14A OF THE ACT OUT OF INTEREST EXP ENDITURE. THOUGH THESE FACTUAL ASPECTS PRESENTED BEFORE THE LD. CIT(A), YE T THE FIRST APPELLATE AUTHORITY GRANTED ONLY PARTIAL RELIEF. AGAINST THIS DECISION OF LD. CIT(A), BOTH THE PARTIES HAVE FILED THESE APPEALS BEFORE THE TRI BUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT THE CONTENTION OF THE ASSESSEE IS DULY SUPPORTED BY THE DECISION OF H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HDFC LTD. REPORTED IN 366 ITR 505. 5. ON THE CONTRARY, THE LD. D.R. SUBMITTED THAT THE SUBMISSIONS OF THE ASSESSEE REQUIRE VERIFICATION. 6. HAVING HEARD THE RIVAL SUBMISSIONS, WE ARE OF TH E VIEW THAT THE DISALLOWANCE MADE U/S 14A OF THE ACT BY THE A.O. RE QUIRES FRESH EXAMINATION BY DULY CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE C ASE OF HDFC LTD. (SUPRA). ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) O N THIS ISSUE AND RESTORE THE ITA 3005 & 1981/M/13 3 SAME TO THE FILE OF THE A.O. WITH A DIRECTION FOR F RESH EXAMINATION IN THE LIGHT OF THE AFORESAID DISCUSSION. 7. THE NEXT ISSUE CONTESTED BY THE ASSESSEE RELATES TO THE DISALLOWANCE OF BONUS EXPENDITURE MADE U/S 43B OF THE ACT. 8. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSES SEE SUBMITTED THAT THE A.O. DISALLOWED A SUM OF RS. 4,67,661/- U/S 43B OF THE ACT BEING THE BONUS NOT PAID BY THE ASSESSEE BEFORE THE DATE OF COMPLET ION OF THE TAX AUDIT. THE LD. COUNSEL SUBMITTED THAT THE TAX AUDITOR HAD COMMITTE D AN ERROR WITH REGARD TO THE DISALLOWANCE TO BE MADE U/S 43B OF THE ACT. HOW EVER, THE TAX AUDITOR HAS RECTIFIED THE ERROR BY ISSUING A CLARIFICATION. FU RTHER THE BOOKS OF ACCOUNTS OF THE ASSESSEE ALSO SUPPORT THE CLARIFICATION ISSUED BY THE TAX AUDITOR. THE LD A.R FURTHER SUBMITTED THAT THE LD. CIT(A), HOWEVER, REFUSED TO CONSIDER THE CLARIFICATION ISSUED BY THE TAX AUDITOR AND ACCORDI NGLY CONFIRMED THE ADDITION. ACCORDINGLY, THE LD. COUNSEL SUBMITTED THAT THE ASS ESSEE SHOULD BE GIVEN AN OPPORTUNITY TO SUBSTANTIATE THE CLAIM WITH THE BOOK S OF ACCOUNT. 9. WE HAVE HEARD THE LD. D.R. AND EXAMINED THIS ISS UE. WE NOTICE THAT THE TAX AUTHORITIES HAVE TAKEN A DECISION AGAINST THE A SSESSEE BY CONSIDERING THE TAX AUDIT REPORT. HOWEVER, ACCORDING TO THE ASSESS EE, THE TAX AUDITOR HAS ISSUED A CLARIFICATION LETTER AND FURTHER IT IS SUB MITTED THAT THE CLAIM OF THE ASSESSEE IS SUPPORTED BY BOOKS OF ACCOUNT. UNDER TH ESE SET OF FACTS, WE ARE OF THE VIEW THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN IGNORING THE BOOKS OF ACCOUNT AS WELL AS THE CLARIFICATION ISSUED BY THE TAX AUDITOR. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAM INATION AND WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE S AME TO THE FILE OF THE A.O. WITH A DIRECTION TO EXAMINE THIS ISSUE AFRESH BY DU LY CONSIDERING THE BOOKS OF ACCOUNT AND THE CLARIFICATION LETTER ISSUED BY THE TAX AUDITOR. ITA 3005 & 1981/M/13 4 4. IN THE RESULT, APPEAL OF THE ASSESSEE AS WELL AS APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE, 2015. !' # $% &! ' 15 TH JUNE, 2015 ( ) SD/- SD/- (I.P. BANSAL) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 15-06-2015 [ .6../ RK RKRK RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE CIT, CONCERNED, MUMBAI 4. 7 / ADDL. CIT CONCERNED, ,MUMBAI 5. :;( 66<= , <= , $ 5 / DR, ITAT, MUMBAI A BENCH 6. (?@ A / GUARD FILE. ' / BY ORDER, : 6 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI