M/s. QA Infotech (P) Ltd., New Delhi V. DCIT, New Delhi

ITA 2203/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5503 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: GAUTAM JAIN ADV SH P K KAMAL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.-2203/DEL/2015 ( ASSESSMENT YEAR: 2011-12) QA INFOTECH (P). LTD. 2B, POCKET D, SFS FLATS, MAYUR VIHAR, PHASE-III, NEW DELHI. PAN NO. AAACQ1061E VS DCIT CIRCLE 14(1) NEW DELHI. ASSESSEE BY SH. GAUTAM JAIN, ADV. SH. P.K. KAMAL REVENUE BY SH. RAVI KANT GUPTA, SR. DR ORDER PER SHRI K.NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 03.07.2014 IN APPEAL N O. 74/13-14 PASSED BY THE LD. COMMISSIONER OF INCOME T AX (APPEALS)-XVII, NEW DELHI (HEREINAFTER FOR SHORT CA LLED AS THE LD. CIT (A)). ASSESSEE PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT FOR THE AY 2011 -12 THE ASSESSEE FILED THE RETURN OF INCOME ON 19.09.2011 D ECLARING THE INCOME OF RS. 2,85,72,193/- AND BOOK PROFITS AT RS. 20,87,79,519/-. LD. ASSESSING OFFICER CONCLUDED THE DATE OF HEARING 07.05.2018 DATE OF PRONOUNCEMENT 08.05.2018 2 ITA NO. 2203/DEL/2015 ASSESSMENT PROCEEDINGS BY ORDER DATED 17.06.2013 MA KING DISALLOWANCE OF RS. 6,92,003/- U/S 14A OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) UNDER T HE NORMAL PROVISIONS OF THE ACT BUT WHILE CALCULATING THE BOO K PROFITS UNDER MAT PROVISIONS LD. ASSESSING OFFICER HAS ERRE D IN ENHANCING THE BOOK PROFITS ON ACCOUNT OF THE DISALL OWANCE U/S 14A OF THE ACT. WHILE PLACING RELIANCE ON THE DECISION DATED 09.10.2013 PASSED BY THE TRIBUNAL REPORTED IN M/S POWER GRID CORPORATION INDIA LTD. FOR THE AY 2008-0 9. LD. CIT (A) CONFIRMED THE ADDITION OF RS. 6,92,003/- U/ S 14A OF THE ACT TO THE BOOK PROFITS. HENCE, THE APPEAL IN THIS APPEAL BEFORE US. 3. IT IS THE ARGUMENT OF THE LD. AR THAT THE SPECIA L BENCH OF THE TRIBUNAL IN ACIT VS. VIREET INVESTMENT (P) L TD. (2017) 82 TAXMANN.COM 415 (DEL.) HELD THAT THE COMPUTATION UN DER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2) IS TO BE MADE WITHOUT RESORTING TO THE COMPUTATION AS CONTEMPLATE D U/S 14A READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 . BASING ON THIS, HE SUBMITTED THAT THE ADDITION OF RS. 6,92 ,003/- U/S 14A OF THE ACT TO THE BOOK PROFITS IS NOT SUSTAINAB LE. 4. PER CONTRA, LD. DR SUBMITTED THAT THE DECISION O F HON'BLE DELHI HIGH COURT IN THE CASE OF PR. CIT V. BHUSHAN STEEL LTD.: ITA NO.593/2015 WAS DECIDED WITHOUT NOTICING THE EA RLIER JUDGMENT, CIT VS. GOETZE (INDIA) LTD. 361 ITR 505, AS SUCH, BHUSHAN STEEL DOES NOT CARRY ANY PRESIDENTIAL VALUE . 3 ITA NO. 2203/DEL/2015 5. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS SUBMITTED ON EITHER SIDE. THE ARGUMENT S NOW ADVANCED BEFORE US BY THE LD. DR ARE SIMILAR TO THE ARGUMENTS ADVANCED BEFORE THE SPECIAL BENCH. HAVING CONSIDERED THE SAME THE SPECIAL BENCH REACHED A CON CLUSION THAT THE COMPUTATION UNDER CLAUSE (F) OF EXPLANATIO N 1 TO SECTION 115JB(2) IS TO BE MADE WITHOUT RESORTING TO THE COMPUTATION AS CONTEMPLATED U/S 14A OF THE ACT READ WITH RULE 8D OF THE RULES. IN THE CIRCUMSTANCES, WHILE RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIAL BENCH IN THE CASE OF VIREET INVESTMENT (P) LTD. (SUPRA), WE FIND IT DIFF ICULT TO SUSTAIN THE ADDITION OF RS. 6,92,003/- U/S 14A OF THE ACT T O THE BOOK PROFITS AND ACCORDINGLY DIRECT THE LD. AO TO DELETE SUCH AN ADDITION MADE TO THE BOOK PROFITS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.05.2018 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA C HARY) PRESIDENT JUDICIAL MEMB ER DATED: 08.05.2018 *KAVITA ARORA 4 ITA NO. 2203/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 07.05.2018 DRAFT PLACED BEFORE AUTHOR 08.05.2018 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 08.05.18 KEPT FOR PRONOUNCEMENT ON 08.5.18 FILE SENT TO THE BENCH CLERK 09.5.18 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.