Victory Financial Services Pvt Ltd, Chennai V. ACIT(OSD), Corporate Circle-3, Chennai

ITA 2158/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5038 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-11-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARV SREENIVASAN JCIT
• Assessee Lawyers: VIJAYAKUMAR
• Keywords: Principle of natural justice
• Section: 234B; 14A; 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , , # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 2158/MDS/2017 / ASSESSMENT YEAR : 2012-13 VICTORY FINANCIAL SERVICES PVT. LTD., RAJA ANNAMALAI BUILDING, IV FLOOR, 72, MARSHALLS ROAD, EGMORE , CHENNAI 600 008. [PAN: AACCV 7673B] VS. ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -3, CHENNAI. ( / APPELLANT) ( / RESPONDENT) %& / APPELLANT BY : SHRI. VIJAYAKUMAR, CA )*%& / RESPONDENT BY : SHRI. A R V SREENIVASAN, JCIT & /DATE OF HEARING : 20.11.2017 & /DATE OF PRONOUNCEMENT : 02.01.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNAI IN ITA NO. 12/2015- 16/CIT(A)-11 DATED 23.06.2017 FOR ASSESSMENT YEAR 2 012-13. :-2-: ITA NO.2158/MDSS/2017 2. M/S. VICTORY FINANCIAL SERVICES PVT. LTD., THE A SSESSEE, IS IN THE FINANCE AND INVESTMENT BUSINESS. WHILE COMPUTING T HE INCOME FROM BUSINESS FOR ASSESSMENT YEAR 2012-13, THE ASSESSEE HAS WORKED OUT THE DISALLOWANCE U/S. 14A R.W.R. 8D AT RS. 14,66,165/- UNDER THE REGULAR COMPUTATION AS WELL AS UNDER MAT COMPUTATION U/S. 1 15JB. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THE REVISED COMPUTATION STATING THAT THE DISALLOWANCE U/S. 14A R.W.R. 8D SH OULD BE AT RS. 6,48,257/- ONLY, WHICH WAS NOT ACCEPTED BY THE ASSESSING OFFIC ER. BEFORE THE CIT(A), THE ASSESSEE HAS CLAIMED THAT THE DISALLOWANCE UNDE R MAT COMPUTATION U/S. 115JB SHOULD NOT HAVE BEEN MADE BY RELYING CERTAIN CASE LAWS. THE CIT(A) DID NOT ACCEPT THE ASSESSEES STAND FOR THE REASON THAT IN THE CASES RELIED ON BY THE ASSESSEE, THE AO HAS MADE ADJUSTMENTS IN BOT H THE NORMAL COMPUTATION AS WELL AS MAT COMPUTATION U/S. 115JB, WHEREAS, IN THE ASSESSEES CASE, THE AO HAS NOT MADE ANY FRESH ADJU STMENTS, HE HAS SIMPLY ACCEPTED THE TAXABLE INCOME COMPUTED BY THE ASSESSE E FOR THE PURPOSE OF ARRIVING THE TAX LIABILITY AND DISMISSED THE APPEAL . 3. AGGRIEVED, THE ASSESSEE FILED THIS APPEAL WITH T HE FOLLOWING GROUNDS: 1. FOR THAT THE ORDER OF THE COMMISSIONER OF INCO ME TAX (APPEALS) IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CAS E TO THE EXTENT PREJUDICIAL TO :-3-: ITA NO.2158/MDSS/2017 THE INTEREST OF THE APPELLANT AND TO ANY RATE IS OP POSED TO THE PRINCIPLES OF EQUITY, NATURAL JUSTICE AND FAIR PLAY. 2. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO APPRECIATE THAT THE ORDER OF THE ASSESSING OFFICER IS WITHOUT JURISDICTIONS 3. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN UPHOLDING THE DISALLOWANCE U/S. 14A R.W.R. 8D TO TH E EXTENT OF RS. 14,66,165/- WHILE COMPUTING BOOK PROFITS U/S. 115JB OF THE INCO ME TAX ACT. 4. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT DISALLOWANCE U/S. 14A R.W.R. 8D SHO ULD NOT BE INCLUDED FOR COMPUTATION OF BOOK PROFITS U/S. 115JB. 5. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT FRESH CLAIMS CAN BE EVALUATED DURIN G APPELLATE PROCEEDINGS IN THE INTEREST OF JUSTICE 6. FOR THAT THE APPELLANT OBJECTS TO THE LEVY OF IN TEREST OF U/S. 234B AND 234C. 4. THE AR RELIED ON THE JUDGEMENT OF THE DELHI ITAT SPECIAL BENCH DECISION IN THE CASE OF ACIT, CIRCLE 17(1), NEW DEL HI VS VIREET INVESTMENT PVT LTD., IN ITA NO. 502 (DELHI) OF 2012 CO NO. 68 (DEL HI) OF 2014 FOR ASSESSMENT YEAR 2008-09, DATED 16.06.2017. PER CON TRA, THE DR SUPPORTED THE ORDER OF THE CIT(A). 5. WE HEARD THE RIVAL SUBMISSIONS. AFTER CONSIDERI NG THE DECISIONS OF THE HONBLE DELHI HIGH COURT TAKING DIVERSE VIEW S, FOLLOWING THE RATIOS LAID IN THE CASE OF CIT VS VEGETABLE PRODUCTS LTD., 88 I TR 192 SC, THE DELHI ITAT SPECIAL BENCH, SUPRA, HELD THAT THE COMPUTATION UND ER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2) IS TO BE MADE WIT HOUT RESORTING TO COMPUTATION AS CONTEMPLATED U/S. 14A R.W.R. 8D OF T HE INCOME TAX RULES, :-4-: ITA NO.2158/MDSS/2017 1962. THE REVENUE HAS NOT BROUGHT TO OUR NOTICE A NY DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT ON THIS ISSUE. IN TH E FACTS AND CIRCUMSTANCES, FOLLOWING THE DELHI SPECIAL BENCH DECISION, THE ASS ESSEES PLEA IS ALLOWED AND THE APPEAL IS ALLOWED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON TUESDAY, THE 2 ND DAY OF JANUARY, 2018 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) !' /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ' /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 02 ND JANUARY, 2018 JPV &)1232 /COPY TO: 1. % / APPELLANT 2. )*% /RESPONDENT 3. 4 ) ( /CIT(A) 4. 4 /CIT 5. 2) /DR 6. 7 /GF