Indian Potash Limited, CHENNAI V. DCIT, CHENNAI

ITA 2107/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7679 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 19-01-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 02-11-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: S S ENTHAMARAI KANNAN
• Keywords: Revised return
• Section: 143(3); 142(1); 14A

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER I.T.A.NO. 2107/MDS/2015 ASSESSMENT YEAR : 20 12 - 13 M/S. INDIAN POTASH LIMITED, SEETHAKATHI BUSINESS CENTRE, 1 ST FLOOR, NO. 684 - 690, ANNA SALAI, CHENNAI 600 00 6 . [PAN: A A A C I0888H ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX , CORPORATE CIRC LE 2 ( 2 ), CHENNAI 600 0 34 . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S. S ENTHAMARAI KANNAN , ADVOCAT E / RESPONDENT BY : SHRI A. B. KOLI , J CIT / DATE OF HEARING : 1 9 . 0 1 .201 6 / DATE OF P RONOUNCEMENT : 31 . 0 3 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 6 , CHENNAI , DATED 31 . 0 8 .20 1 5 RELEVANT TO THE ASSESSMENT YEAR 20 12 - 13 . THE FIRST GROUND RAISED IN THE APPEAL OF THE ASSESSEE READS AS UNDER: (1) THE CIT(A) HAS ERRED IN NOT CONSIDERING THE FOLLOWING GROUND NO. III(B) RAISED BEFORE HIM: I.T.A. NO . 2 107 /M/ 15 2 THE AO HAS ERRED IN RESORTING TO THE COMPUTATION U/R 8D W ITHOUT GIVING ANY REASONS AS TO WHY HE WAS NOT SATISFIED ABOUT THE CORRECTNESS OF THE CLAIM OF THE APPELLANT COMPANY . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING AND MANUFACTURING OF POTASSIC AND NON - POTASSIC F ERTILIZERS, CASTLE AND POULTRY FEED. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAS FILED IS RETURN ELECTRONICALLY ON 28.09.2012 ADMITTING AN INCOME OF .171,43,62,930/ - . SUBSEQUENTLY, THE ASSESSEE FILED ITS REVISED RETURN OF INCOME ON 31.03 .2014 ADMITTING AN INCOME OF .111,40,94,370/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] WAS ISSUED TO THE ASSESSEE ON 08.08.2013, WHICH WAS DULY SERVED ON 25.08.2013 TO THE ASSESSEE. LATER VIDE DATED 26.06.2014, NOTICE UNDER SECTION 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE AND THE SAME WAS DULY SERVED ON 02.07.2014. FURTHER, ON 12.08.2014, NOTICE UNDER SECTION 143(2) R.W.S. 129 OF THE ACT WAS SERVED ON THE ASSESSEE ON 21.08.2014. AFTER CONSIDERING VARIOUS DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 25.03.2015 BY DETERMINING THE INCOME OF THE ASSESSEE AT .3,69,89,53,171/ - BY DISALLOWING VARIOUS CLAIMS. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BASED ON THE GROUNDS OF APPEAL FILED BEFORE THE LD. CIT(A), THE LD. CIT(A) I.T.A. NO . 2 107 /M/ 15 3 HAS OBSERVED THAT BASICALLY THREE ISSUES ARE INVOLVED IN THE APPEAL FILED BY THE ASSESSEE, WHICH ARE REPRODUCED AS UNDER: (I) DISALLOWANCE OF THE APPELLANT S CLAIMS OF LOSS ON BUY - BACK OF FERTILIZER BONDS : . 1,89,05,15,540/ - (II) DISALLOWANCE OF INTEREST PAYABLE ON IMPORT ADVANCES : . 59,30,57,727/ - (III) DISA LLOWANCE OF EXPENSES U/S 14A R.W. RULE 8D : . 10,12,51,784/ - 4. WHILE PROCEEDING TO DECIDE THE GROUND WITH REGARD TO DISALLOWANCE OF EXPENSES UNDER SECTION 14A R.W. RULE 8D, THE LD. CIT(A) HAS NOT GIVEN ANY SPECIFIC FINDINGS WITH REGARD TO THE G ROUND R AISED BEFORE HIM IN GROUND NO. III ( B ) VIZ. THE AO HAS ERRED IN RESORTING TO THE COMPUTATION U/R 8D WITHOUT GIVING ANY REASONS AS TO WHY HE WAS NOT SATISFIED ABOUT THE CORRECTNESS OF THE CLAIM OF THE APPELLANT COMPANY . THUS, THE ASSESSEE HAS CHALLENGED B EFORE THE TRIBUNAL THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND SPECIFICALLY RAISED BY THE ASSESSEE BEFORE DECIDING THE ISSUE WITH REGARD TO THE DISALLOWANCE OF EXPENSES UNDER SECTION 14A R.W. RULE 8D. 5. WE HAVE HEARD RIVAL CONTENTIONS A ND CAREFULLY PERUSED THE ORDERS OF AUTHORITIES BELOW. BEFORE THE LD. CIT(A), THE ASSESSEE HAS RAISED THE SPECIFIC GROUND IN GROUND NO. III(B) AS REPRODUCED HEREINABOVE. HOWEVER, THE LD. CIT(A) HAS NOT GIVEN ANY FINDINGS OVER THE SPECIFIC GROUND RAISED BY T HE ASSESSEE BEFORE DEALING THE ISSUE WITH REGARD TO THE DISALLOWANCE OF EXPENSES UNDER SECTION 14A R.W. RULE 8D. UNDER THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REMIT THE MATTER BACK TO I.T.A. NO . 2 107 /M/ 15 4 THE LD. CIT(A) TO DECIDE THE ISS UE AFRESH IN ACCORDANCE WITH THE LAW AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE WE HAVE SET ASIDE THE ORDER OF THE LD. CIT(A) WITH REGARD TO THE GROUND RAISED BEFORE HIM IN GROUND NO. III (B), ADJUDICATION OF GROUND RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL ON MERITS IS NOT WARRANTED AT THIS STAGE. THUS, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 31 ST MARCH , 201 6 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 31 . 0 3 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.