Manpasand Beverages Ltd., Vadodara V. The Deputy Commissioner of Income Tax, Circle-2(1)(2), Baroda

ITA 2251/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4620 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 26-09-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 09-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: TDS
• Section: 43B; 40A(3); 14A; 80IB; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER MANPASAND BEVERAGES LTD. E - 62, MANJUSAR GIDC, MANJUSAR SAVLI ROAD, VADODARA - 391775 PAN: AAHCM1210E (APPELLANT) VS DY. CIT, CIRCLE - 2(1)(2), BARODA (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL , SR. D . R. ASSESSEE BY: SHRI MUKUND BAKSHI , A.R. DATE OF HEARING : 26 - 09 - 2 019 DATE OF PRONOUNCEMENT : 15 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS A SSESSEE S APPEAL FOR A.Y. 2013 - 14 , ARI SES FROM ORDER OF THE CIT(A) - 2, VADODARA DATED 21 - 07 - 2 017 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) - 1 , VADODARA HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWAN CE OF AN AMOUNT OF RS. 1,55,239/ - U/S. 14A OF THE I.T. ACT, BEING I T A NO . 2251 / A HD/20 17 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 2251 /AHD/20 17 A.Y. 2013 - 14 PAGE NO MANPASAND BEVERAGES LTD. VS. DY. CIT 2 ADMINISTRATIVE COST ON THE INVESTMENTS. THE DISALLOWANCE BEING UNWARRANTED IN FACT S AND IN LAW IS PRAYED TO BE ALLOWED. 2. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 2, BARODA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITIO N OF AN AMOUNT OF RS. 20,90,804/ - REPRESENTING THE FOLLOWING ITEMS OF EXPENSE: - I) INTEREST ON TDS RS. 7,191/ - II) INTEREST ON EXCISE DUTY RS. 7,634/ - II) EXCISE DUTY ON OTHER EXPENSES RS. 15,07,036/ - III) LATE PAYMENT OF EMP . CONTRIBUTION TO P.P. U/S. 36(1 )(VA) RS. 5.68,943/ - RS. 20,90,804/ - THE LD. CIT(A) ERRED IN REJECTING THE CO NTENTION OF THE APPELLANT THAT SUCH DISALLOWANCE OF EXPENDITURE HAS RESULTED IN THE ENHANCEMENT OF THE GROSS TOTAL INCOME WHICH OTHERWISE IS AL LOWED AS DEDUCTION U/S. 80IB(11 A). 3. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED THAT GROUND NO. 1 IS NOT PRESSED, THEREFORE, THE SAME STANDS DISMISSED. REGARDING SECOND GROUND OF APPEAL, THE LD. COUNSEL HAS BROUGHT TO OUR NOTICE THAT SIMILAR ISSU E ON IDENTICAL FACT IN THE PR ECEDING ASSESSMENT YEAR IN THE CASE OF THE ASSES SEE ITSELF HAS BEEN ADJUDICATED BY THE ITAT, AHMEDABAD IN FAVOUR OF THE ASSESSEE. T HE LD. COUNSEL HAS ALSO FILED COPY OF ITA NO. 679/AHD/2017 DATED 0 6 - 02 - 2019 . WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE ABOVE CITED JUDICIAL P RONOUNCEMENT OF THE CO - ORDINATE BENCH OF THE ITAT AND NOT ICED THAT THE IDENTICAL ISSUE ON SIMILAR FACT HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AFTER FOLLOWING THE DECISION OF ITAT AHMEDABAD IN ITA NO. 2662/AHD/2015 IN ASSESSEE S OWN CASE DATED 07 - 06 - 2 018. T HE LD. DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH NOT TO CONTRADICT THE ABOVE CITED FINDING OF THE ITAT VIDE ITA NO. 679/AHD/2017 2019 DATED 6 TH FEB , 2019 ON THE IDENTICAL I SSUE ON SIMILAR FACTS AFTER FOLLOWING THE DECISION OF ITAT IN THE CASE OF ASSE SSEE ITSELF VIDE ITA NO. 2662/AHD/2015 DATED 7 TH JUNE, 2018 DECIDED IN FAVOUR OF THE ASSESSEE. RELEVANT PART OF THE DECISION IS REPRODUCED AS UNDER: - I.T.A NO. 2251 /AHD/20 17 A.Y. 2013 - 14 PAGE NO MANPASAND BEVERAGES LTD. VS. DY. CIT 3 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THERE IS NO AMBIGU ITY THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB (11 A) OF THE ACT. THEREFORE, THE DISALLOWANCE MADE U/S 40A(3), 43B OF THE ACT RELATING TO THE BUSINESS ACTIVITY WOULD BE ELIGIBLE FOR DEDUCTION UNDER CHAPTER - VIA AS PER THE CBDT CIRCULAR NO. 37/2016 DATED 02.11.2016. 9.1 WE ALSO FIND THAT IN THE IDENTICAL FACTS & CIRCUMSTANCES, THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN ITA N O. 26627AHD/2015 VIDE ORDER DATED 7 - 6 - 2018. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER: - '4. GROUND NO.4 CONCERNS CORRESPONDING DEDUCTION U/S. 80IB(11A) ON THE PORTION OF THE ELIGIBLE BUSINESS PROFIT ENHANCED ON ACCOUNT OF DISALLOWANCES UNDER S. 40A(3) OF RS.30,000/ - . SIMILARLY, GROUND NO.5 CONCERNS ENHANCED DEDUCTION UNDER S.80IB(L 1A) OWING TO INCREASE IN ELIGIBLE PROFITS IN VIEW OF THE DISALLOWANCES MADE UNDER S.43B AMOUNTING TO RS.42,07,953/ - . IT IS THE CASE ON BEHALF OF THE ASSESSEE THAT THE ASSESSEE IS ELIGIBLE FOR CORRESPONDING DEDUCTION UND ER S.80IB(L 1A) ON ACCO UNT OF DISALLOWANCES MADE IN THE ASSESSMENT 40A(3) AND 43B OF THE ACT SINCE THE ELIGIBLE PROFIT STOOD ENHANCED DUE TO SUCH DISALLOWANCE. 5. AS SUBMITTED ON. BEHALF OF THE ASSESSEE, WE FIND THAT CBDT HAS ADDRESSED THE AFORESAID ISSUE IN FAVOUR OF THE ASSESS EE AS PER ITS CIRCULAR NO.37/2016 DATED 2ND NOVEMBER, 2016. AS PER THE AFORESAID CIRCULAR, THE BOARD HAS ACCEPTED THE PROPOSITION THAT DISALLOWANCES SO MADE UNDER S.40A(3), 43B ETC. OF THE ACT RELATED TO BUSINESS ACTIVITY WOULD BE ELIGIBLE FOR CHAPTER VI - A DEDUCTION IN VIEW OF THE ENHANCEMENT OF THE PROFITS OF THE ELIGIBLE BUSINESS. IN VIEW OF THE CBDT CIRCULAR, THE CONTROVERSY STANDS SETTLED IN VIEW OF THE ASSESSEE. THUS, GROUND NOS. 4 & 5 OF THE ASSESSEE ARE ALLOWED. ' 9.2 THE LEARNED DR BEFORE US HAS NOT BROUGHT ANYTHING ON RECORD CONTRARY TO THE ARGUMENT ADVANCED BY THE LEARNED AR. 9.3 THEREFORE WE HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION ON THE ENHANCED INCOME ON ACCOUNT OF THE ADDITION OF CERTAIN ITEMS AS DISCUSSED ABOVE. THEREFORE WE REVERSE T HE ORDER OF AUTHORITIES BELOW AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. CONSIDERING THE ABOVE FACTS AND FINDING OF THE CO - ORDINATE BENCH OF THE ITA T ADJUDICATED IN FAVOUR OF THE ASSESSEE ON IDENTICAL FACTS ON SIMILAR ISSUE , THIS GROUND OF THE APPEAL IS ALLOWED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 15 - 11 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SI NGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 15 /11 /2019 I.T.A NO. 2251 /AHD/20 17 A.Y. 2013 - 14 PAGE NO MANPASAND BEVERAGES LTD. VS. DY. CIT 4 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,