DCIT, Central Circle-1(4), Kolkata, Kolkata V. M/s Greenply Industries Ltd., Kolkata

ITA 2164/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1538 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 08-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: SHIKHA AGA RWAL ACA
• Keywords: Earning of tax free income; Additional evidence
• Section: 14A; 115JB

Judgement Text

1 ITA NO.2164/KOL/2016 GREENPLY INDUSTRIES LTD., AY- 2012-13 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VARKEY, JM] I.T.A. NO. 2164/KOL/2016 ASSESSMENT YEAR: 2012-13 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(4), KOLKATA. VS. M/S. GREENPLY INDUSTRIES LTD. (PAN: AAACU7284R) APPELLANT RESPONDENT DATE OF HEARING 25.01.2018 DATE OF PRONOUNCEMENT 14.02.2018 FOR THE APPELLANT SHRI ARINDAM BHATTACHARJEE, ADDL. CIT, SR. DR FOR THE RESPONDENT SMT. SHIKHA AGARWAL, ACA ORDER PER SHRI A.T.VARKEY, JM THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF LD. CIT(A)-20, KOLKATA DATED 31.08.2016 FOR AY 2012-13 ON THE FOLLOWING REVISED GROUNDS: 1. THAT THE FACT AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN FACT IN ADMITTING ADDITIONAL EVIDENCE IN VIOL ATION OF PROVISIONS OF RULE 46A OF THE I.T.ACT, 1961. A) THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN RESTRICTING THE ADDITION U/S. 14A AMOUNTING TO RS.1310/- 2. AT THE TIME OF HEARING LD. DR COULD NOT POINT OU T WHAT WAS THE ADDITIONAL EVIDENCE THAT HAS BEEN ADDUCED AFRESH AT THE TIME OF HEARING BEFORE THE LD. CIT(A), THEREFORE, IN THE ABSENCE OF THE SAME, GROUND NO. 1 CANNOT SURVIVE AN D IS, THEREFORE, DISMISSED. 3. IN RESPECT OF GROUND NO. 1(A), BRIEF FACTS OF TH E CASE ARE THAT THE AO DISALLOWED RS.42,43,850/- BY INVOKING SEC. 14A READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 AND 2 ITA NO.2164/KOL/2016 GREENPLY INDUSTRIES LTD., AY- 2012-13 DISALLOWED IT ON THE BOOK PROFIT OF THE ASSESSEE DE TERMINED U/S. 115JB OF THE ACT AND HAS DELETED THE DISALLOWANCE MADE BY THE AO. AGGRIEVED, REVENUE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS OBSERVED THAT A SIMILAR ISSUE RELATING TO ADDITION ON ACCOUNT OF EXPENDITURE DISALLOWED UNDER SECTION 14A WHILE COMPUTING BOOK P ROFIT UNDER SECTION 115JB OF THE ACT HAS BEEN DECIDED BY THE SPECIAL BENCH OF THIS TRIBU NAL AT DELHI IN THE CASE OF ACIT VS VIREET INVESTMENT PVT. LTD. (ITA NO. 502/DEL/2012 D ATED 16.06.2017) WHEREIN IT WAS HELD, AFTER TAKING INTO CONSIDERATION THE DECISION OF DEL HI HIGH COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA), THAT THE EXPENDITURE INCURRED TO EARN EXEMPT INCOME COMPUTED UNDER SECTION 14A OF THE ACT COULD NOT BE ADDED WHILE COMPUTING B OOK PROFIT UNDER SECTION 115JB OF THE ACT. IN THE CASE OF CIT VS JAYSHREE TEA INDUSTRIES LTD. (ITAT NO. 47 OF 2014 DATED 19.11.2014), HONBLE KOLKATA HIGH COURT HAS ALSO EX PRESSED A SIMILAR VIEW BY HOLDING THAT THE PROVISION OF SECTION 115JB IN THE MATTER OF COM PUTATION IS A COMPLETE CODE IN ITSELF AND RESORT NEED NOT AND CANNOT BE MADE TO SECTION 14A O F THE ACT. HONBLE KOLKATA HIGH COURT HAS FURTHER HELD THAT THE COMPUTATION OF THE AMOUNT OF EXPENDITURE RELATABLE TO EXEMPT INCOME OF THE ASSESSEE MUST BE MADE INDEPENDENTLY B Y APPLYING CLAUSE (F) OF EXPLANATION (1) UNDER SECTION 115JB OF THE ACT WHERE THE ASSESS EE HAS NOT CLAIMED SUCH EXPENDITURE TO BE NIL. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAYSHREE TEA INDUSTRIES LTD. (SUPRA), W E SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR COMPUTING THE AMOUNT OF EXPENDITURE RELATABLE TO THE EXEMPTED INCOME OF THE ASSESSEE INDEPENDENTLY BY APPLYING CLAUSE (F) OF EXPLANATION (1) UNDER SECTION 115JB O F THE ACT WITHOUT RESORTING TO SECTION 14A OR RULE 8D. THIS GROUND OF THE ASSESSEES APPEA L IS THUS PARTLY ALLOWED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 04.02.20 18 SD/- SD/- (J. SUDHAKAR REDDY) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 4TH FEBRUARY, 2018 JD.(SR.P.S.) 3 ITA NO.2164/KOL/2016 GREENPLY INDUSTRIES LTD., AY- 2012-13 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CENTRAL CIRCLE-1(4), KOLKATA. 2 RESPONDENT M/S. GREENPLY INDUSTRIES LTD., NEW B . K. MARKET, 2 ND FLOOR, 16A, SHAKESPEARE SARANI, KOLKATA-700 001. 3. THE CIT(A) KOLKATA 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. / TRUE COPY, BY ORDER, SR. PVT. SECRETARY