Appeal details
Counselvise Citation
[2018] 123 COUNSELVISE.COM (IT) 8316 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-10-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
J
Assessment Year
2012-2013
Appeal Filed On
21-03-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 1983/MUM/2017 (ASSESSMENT YEAR: 2012-13) M/S. SUN INVESTMENT P . LTD. 4TH FLOOR, JSW CENTRE BKC, BANDRA (E) MUMBAI 400051 VS. DCIT, CENTRAL CIRCLE - 8(3) MUMBAI PAN AAACS0389M APPELLANT RESPONDENT APPELLANT BY: SHRI GAURAV KALRA RESPONDENT BY: SHRI NISHANT SAMAIYA DATE OF HEARING: 03.10.2018 DATE OF PRONOUNCEMENT: 03.10.2018 O R D E R PER B.R. BASKARAN, AM THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 04.11.2016 PASSED BY THE CIT(A)-50, MUMBAI AND IT R ELATES TO A.Y. 2012- 13. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDE RED BY THE CIT(A) ON THE FOLLOWING ISSUES: - (A) DISALLOWANCE OF FOREIGN TRAVEL EXPENSES (B) ADDITION MADE TO BOOK PROFIT BY ADOPTING DISALLOWAN CE COMPUTED UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 (HERE INAFTER 'THE ACT'). 2. THE ASSESSEE IS AN INVESTMENT COMPANY. THE ASSESSME NT FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED BY THE AO UNDER S ECTION 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT ` 79.54 LAKHS UNDER THE NORMAL PROVISIONS OF THE ACT. THE BOOK PROFIT WAS DETERMINED AT A LOSS OF ` 71.56 LAKHS UNDER SECTION 115JB OF THE ACT. THE AO DISALLOWED THE FOREIGN TRAVEL EXPENSES OF ` 85.07 LAKHS CLAIMED BY THE ASSESSEE WHILE COMPUTING THE INCOME UNDER THE NORMAL PROVISIONS OF THE ACT. FOR THE PURPOSE OF ITA NO. 1983/MUM/2017 M/S. SUN INVESTMENT P. LTD. 2 COMPUTING BOOKS PROFIT UNDER SECTION 115JB OF THE A CT, THE AO ADOPTED DISALLOWANCE COMPUTED BY HIM UNDER SECTION 14A OF T HE ACT, BEING THE EXPENSES RELATED TO EXEMPT INCOME FOR MAKING ADDITI ON TO THE NET PROFIT UNDER CLAUSE(F) OF EXPLANATION 1 TO SEC. 115JB OF T HE ACT. THE ASSESSEE CHALLENGED BOTH THE ABOVE SAID ADDITIONS BY FILING APPEAL BEFORE THE CIT(A) BUT COULD NOT SUCCEED. HENCE ASSESSEE HAS FILED THI S APPEAL BEFORE US. 3. AT THE OUTSET THE LEARNED A.R. SUBMITTED THAT BOTH THE ISSUES ARE COVERED BY THE DECISIONS RENDERED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 7158/MUM/2017 DATED 20.06.2018 PASSED FOR A.Y. 2013-14 AND ALSO THE DECISION DATED 25.04.2018 PASS ED FOR A.Y. 2010-11 IN ITA NO. 777/MUM/2015 & OTHERS. 4. WE HEARD THE LEARNED D.R. AND PERUSED THE RECORD. T HE FIRST ISSUE RELATES TO DISALLOWANCE OF FOREIGN TRAVEL EXPENSES CLAIMED BY THE ASSESSEE. FROM THE ASSESSMENT ORDER WE NOTICED THAT THE AO WA S CONSTRAINED TO DISALLOW FOREIGN TRAVEL EXPENSES, AS THE ASSESSEE F AILED TO FURNISH SPECIFIC DETAILS CALLED FOR BY THE AO. IN THE ABSENCE OF ANY DETAIL/SUPPORTING DOCUMENTS/EVIDENCE TO SUPPORT THE CLAIM OF FOREIGN TRAVEL EXPENSES, THE AO WAS CONSTRAINED TO DISALLOW THE CLAIM OF THE ASS ESSEE. WHEN THIS FACT WAS POINTED OUT TO THE LEARNED A.R., HE SOUGHT ONE MORE OPPORTUNITY TO FURNISH THE RELEVANT DETAILS BEFORE THE AO. ACCORDI NGLY, IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT THE ASSESS EE MAY BE AFFORDED ONE MORE OPPORTUNITY TO PROVE THE CLAIM OF FOREIGN TRAV EL EXPENSES. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO FOR EXAMININ G THE SAME AFRESH. 5. THE NEXT ISSUE RELATES TO ADDITION MADE BY THE AO FOR COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE AO ADOPTED THE AMOUNT OF DISALLOWANCE COMPUTED BY HIM UNDER SECTION 14A OF T HE ACT UNDER NORMAL PROVISIONS OF THE ACT, FOR MAKING ADDITION UNDER SE CTION 115JB OF THE ACT. THE ASSESSEE, BY PLACING RELIANCE ON THE DECISION R ENDERED BY THE COORDINATE BENCH IN ITS OWN CASE (REFERRED ABOVE), SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN ADOPTING THE DISALLOWANCE COMP UTED BY HIM UNDER ITA NO. 1983/MUM/2017 M/S. SUN INVESTMENT P. LTD. 3 SECTION 14A OF THE ACT. WE NOTICED THAT THE COORDIN ATE BENCH HAS FOLLOWED THE DECISION RENDERED BY THE SPECIAL BENCH OF THE T RIBUNAL IN THE CASE OF M/S. VIREET INVESTMENT PVT. LTD. IN ITA NO.502/DEL/ 2012 DATED 16.06.2017 IN ORDER TO HOLD THAT THE DISALLOWANCE C OMPUTED UNDER SECTION 14A OF THE ACT CANNOT BE ADOPTED FOR COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. SINCE THE COORDINATE BENCH HAS FO LLOWED THE DECISION RENDERED BY THE SPECIAL BENCH, FOLLOWING THE SAME W E ALSO HOLD THAT THE AO WAS NOT JUSTIFIED IN ADOPTING THE DISALLOWANCE C OMPUTED UNDER SECTION 14A OF THE ACT FOR THE PURPOSES OF SECTION 115JB OF THE ACT. 6. HOWEVER, AS PER CLAUSE (F) OF EXPLANATION (1) TO SE CTION 115JB OF THE ACT THE AMOUNT OR AMOUNTS OF EXPENDITURE RELATABLE TO ANY INCOME TO WHICH SECTION 10 (OTHER THAN THE PROVISIONS CONTAINED IN CLAUSE (38) THEREOF) OR SECTION 11 OR SECTION 12 APPLY IS REQUIRED TO BE AD DED TO THE NET PROFIT FOR THE PURPOSE OF COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. HENCE THE AO IS REQUIRED TO COMPUTE THE DISALLOWANC E FOR THE PURPOSE OF CLAUSE (F) OF EXPLANATION (1) TO SECTION 115JB OF T HE ACT INDEPENDENTLY WITHOUT HAVING RESORT TO SECTION 14A OF THE ACT. SI NCE WE HAVE DELETED THE ADDITION MADE BY THE AO BY ADOPTING THE AMOUNT OF D ISALLOWANCE MADE U/S 14A OF THE ACT, IN OUR VIEW, THE QUANTUM OF DISALLO WANCE TO BE MADE FOR THE PURPOSES OF CLAUSE (F) OF EXPLANATION (1) TO SEC. 1 15JB HAS TO BE DETERMINED BY THE AO, AFTER AFFORDING OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. ACCORDINGLY WE RESTORE THIS ISSUE TO THE FILE OF TH E AO. ACCORDINGLY THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE IS SET A SIDE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD OCTOBER, 2018. SD/ - SD/ - (RAVISH SOOD) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 3 RD OCTOBER, 2018 ITA NO. 1983/MUM/2017 M/S. SUN INVESTMENT P. LTD. 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -50, MUMBAI 4. THE PR.CIT, CENTRAL-4, MUMBAI 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.
