DCIT, New Delhi V. Globus Spirits Ltd., New Delhi

ITA 2275/DEL/2014

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0542 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 26-07-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 14-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 139; 43; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.2275/DEL/2014 Assessment Year 2009-10 DCIT, Circle-12(1), New Delhi. v. Globus Spirits Ltd., C-631 New Friends Colony, New Delhi. TAN/PAN: AAACG2634B (Appellant) (Respondent) I.T.A. No.1522/DEL/2015 Assessment Year 2011-12 DCIT, Circle-10(1), New Delhi. v. Globus Spirits Ltd., C-631 New Friends Colony, New Delhi. TAN/PAN: AAACG2634B (Appellant) (Respondent) Appellant by: Shri Parveen Kumar, CA Respondent by: Shri Gurpreet Shah Singh, Sr. DR Date of hearing: 27 07 2022 Date of pronouncement: 18 10 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap peal h as b een fil ed b y th e Assessee ag ain st th e o rd ers o f th e Co mmis sio n er o f In co me Tax (App eals)-XV, New Delh i [‘CIT(A)’ in sho rt] d ate d 3 0 .01 .2 01 4 and 2 6 .1 2 .20 14 arisin g fro m th e asse ss men t o r d er d ated 3 1 .0 3 .2 0 0 9 and 3 1 .1 2 .20 1 3 resp ectiv e ly p assed b y th e Assess in g Officer (AO) u n d er Sectio n 1 43 (3 ) o f th e In co me T ax Act , 1 9 6 1 (th e Act) I.T.A. No.2275/Del/2015 & 1522/Del/2014 2 co n cern in g AY 200 9 -10 & 2 0 11 -12 resp ect iv ely . 2 . Th e g ro u n d s o f ap p eal ra ised b y th e Rev en u e read as u n d er: IT A No. 22 75 /D el /2 01 5 A ss es sm en t Y e a r 2 00 9- 10 1. Wh eth er Ld . C I T (A ) w as co rr ec t on fa ct s an d cir cu ms ta nc es of t h e c as e a nd i n l aw i n r es tr ict in g th e a d dit io n of Rs .3 ,6 1, 08 ,5 78 / - t o Rs .1 ,0 7, 85 ,5 0 1/- w hi ch w as ma de by As ses si ng Of fi cer on a cc ou nt of dis al lo wa nc e o f brand pr om oti on e xp en se s ? 2. Wh eth er Ld . C I T (A ) w as co rr ec t on fa ct s an d cir cu ms ta nc es of t h e ca se an d i n la w i n de le ti ng t he ad di t ion of Rs. 1, 92 ,3 19 /- ma de by th e A ss es si ng Off ic er on ac coun t of la te dep os it io n o f em pl o yee s c on tr ib ut io n f un d i gn or in g t he fa ct th at the re a re di ve rg en t vi ew a mo ng st d iff e ren t co ur t? ” 3 . Gro un d No .1 con cern s d isallo wan ce o f b ran d p romot io n ex p en ses. 4 . Brie fly st ated , th e assessee is en g ag ed in th e bu sin ess o f man u fa ctu re an d sale o f co u n try liq u o r and Ind ian ma d e fo reig n liq u o r (IMFL). Th e assessee fi led its retu rn o f in co me fo r Assessmen t Year 2 00 9 -1 0 u nd er Sect io n 1 39 (1) of th e Act d eclarin g t ax ab le in co me at Rs .1 1 ,0 0 ,4 0 ,4 60 /-. A rev i sed retu rn was filed th erea ft e r b y th e assessee rev isin g th e tax ab le in co me at Rs.7 ,3 9 ,3 1 ,8 8 0 /-. Th e case was se le cted fo r scru tiny assess men t . Th e Assessin g Offi cer in ter a l ia o bserv ed th at th e assessee h as cla i med b ran d p romo t io n ex p en ses of Rs .4 ,5 7 ,6 1 ,2 4 1 /- as rev en ue ex p en ses in co n tr ast to th e fac t t h at th e asse ssee its el f h ad cap it al ized su ch ex p en ses un d er th e h ead in tan g ib le k no who w and New Bran d Dev elo p men t in its b o o k s o f acco u n t. The Assessin g Officer acco rd in g l y d en ied su ch cla i m as rev en u e exp e n d itu re. In p arity with th e ad mi ssio n o f fa ct o f in cu rrin g cap ital e x p en d itu re in sy n c with au d ited b oo k s o f acco u n t, th e Assessing Officer th u s I.T.A. No.2275/Del/2015 & 1522/Del/2014 3 trea ted th e ex p en d itu re as cap i ta l ex p en d itu re. Th e Assessin g Officer ac co rd in g ly g ran ted relie f b y way o f d ep recia tio n o f Rs.9 6 ,5 2 ,6 6 3 /- th ereo n an d co n sequen tly in cre ased th e asses sed in co me to th e ex te n t o f Rs.3 ,6 1 ,0 8 ,5 7 8 /- o n th is sco re. 5 . Ag g riev ed , th e ass essee p re ferred ap p eal b e fo re th e CIT(A). Th e CIT(A) after p eru sal o f ex p en ses, ad mi t ted th e cl ai m o f th e assesse e to b e rev en u e ex p end itu re to th e ex ten t o f Rs.3 ,1 8 ,8 0 ,5 7 3 /- bu t h o wev er co n firmed th e b alan ce amo u n t o f Rs.1 ,4 3 ,8 0 ,6 6 8 /- as cap ita l e x p en d itu re. Dep recia t io n o f Rs.3 5 ,9 5 ,1 6 7 /- @ 2 5 % th ereo n was th u s allo we d o n the ex p en d itu re trea te d to b e c ap it al in n atu re. 6 . Ag g riev ed by th e p art rel ie f, th e Rev en u e p referred ap p eal b efo re th e Trib u n al. Th e a ssesse e a ls o fi led Cro ss Ap p eal to ward s th e a mo u n t co n firmed b y CIT(A) to b e cap i tal ex p en dit u re. 7 . Th e assessee h o wev er av ailed Viv a d se Vish was Sch eme, 2 0 20 in its ap p eal in ITA No .2 0 9 0 /Del/2 0 1 4 in Assessmen t Year 2 0 09 -10 an d thu s th e ap p eal o f th e assesse e was d i smissed as with d rawn v id e o rd er o f th e Co -o rd in ate Ben ch d at ed 8 t h Feb ru ary, 2 0 21 . 8 . We are n o w co n cern ed with th e ap p eal o f th e Rev en u e. As p o in ted o u t on b eh alf o f th e asses se e at th e o u tse t, th e id en ti cal issu e ca me u p in Assessmen t Year 20 0 8-0 9 in ITA No .2 58 5 /Del/2 0 1 2 o rd er d ated 2 7 .06 .2 0 17 , th e relev an t d iscu ssio n an d co n clu sio n thereo n co n cern ing Assessmen t Year 20 08 -09 is rep ro du ced h ereu nd er: “4 . Gr ou nd N o. 2 : T he As ses si ng O ff ic er ma de dis allo wa nc e of Rs. 1 ,7 9, 77, 18 1/ - bei ng t he am ou nt of re ve nu e e xp e ndi tu re I.T.A. No.2275/Del/2015 & 1522/Del/2014 4 un der v ar io us h ea d s o f ex pe nd it ure c a pit al iz ed i n the b o oks o f acc ou nt s a s in ta ng ibl e k no w- ho w a nd new br an d de ve lo pm ent , wh ich th e as se ss e e in i ts re tu rn o f inc om e ha d c la ime d as rev en ue ex pe nd it ur e. Th e A ss es si ng Off ic er tr ea te d t h e s ai d exp en se s as ca pi ta l in n at ure o n th e g ro un d t ha t the se e x pen se s giv e be ne fit o f en du rin g na tu re a nd fu rt he r th at the a sse ss ee its el f r ec og ni ze d t h e s am e t o b e o n c a pit al ac co un t i n i ts bo ok s of a cc ou nts . T he I d. C IT (Ap pe al s ), ho wev er , be in g s at isf ie d wit h th e ex pl an a tio n of t he a ss ess ee h as d el ete d t he dis al lo wa nc e. 4.1 In su pp or t of t he gr ou nd t he Id . Sr . DR su bm itte d th at ass es se e it se lf ha d ad mit te d t ha t th e e xpe nd it ur e in cu rr e d we re cap it al in na tu re . He avy ex pe ns es we re i nc ur re d o n br an d bui ld in g. Th e ac ti on o f th e A ss es sin g Of fi cer , t hu s ca nn ot b e hel d er ro ne ou s i n t rea ti ng s ai d e xp en s es as ca pi ta l i n na t ure o n the g ro un d th at t he se ex pe ns es g ive b ene fi t of e nd uri ng nat ur e an d f ur th er th e as s ess ee it se lf h ad re c og niz ed t he sa me t o b e on cap it al a cc ou nt in i ts bo ok s of ac co un t . 4.2 Th e Id. A R, o n th e othe r ha nd , pl ac e d rel ia nc e on t he fir st a pp el la te o rd er. He s ub mi tte d tha t a sse ss ee is i n th e bu sin es s o f ma nu fa ctu re an d sa le o f c ou ntr y li qu or an d I ndi an ma de fo re ig n li qu or (I MF L ). In t h e cou rs e of i ts e xis ti ng bu sin es s o f sa le s a nd m ar ke ti ng o f l iq uo r pr od uc ts , in ad dit io n to ex ist in g br an d an d i n exi st in g St ate s, d ur in g t he y ear t he ass es se e w ho h as to in cr ea se t he sal e o f it s p ro du cts h ad int ro du ce d s om e n ew b ra nd s a nd al so e nt er ed an d in cre as e foc us on n ew St ate s. A s pe r th e E xci s e Po lic y o f Stat es var io us reg is tr at io ns / l ice nse fe es ar e r eq ui red to be p aid in eve ry Sta te fo r m an uf act ure an d s al e o f li qu or p ro du ct s whi ch a re an nu al f ees an d ar e pa id y ea r to yea r on th ei r re newa l. Du ri ng the ye ar th e a ss es s ee c om pa ny as a n acc ou nt in g p ol ic y ma tte r, ins te ad o f de bi ti ng the s ai d ex pe ns es u nde r t he re sp ec ti ve hea ds of e xp en di tu re, ca pit al iz ed pa rt of t he s a me, un de r t h e he ad “i nta ng ib le as se ts / b ra nd de ve lo pm ent ”. N o n ew b rand wa s pu rch as ed . T he br an d de ve lo pm en t e xpe ns es we re in curre d i n the c ou rs e o f exi st ing bu si nes s o f m an ufa ct ur in g and s ale of liq uo r. H e pl ace d r eli an ce o n t he f ol lo wi ng de ci si on s (i ) E mpi re J ut e Co mp any V s. C IT 1 24 I T R 1 (SC ); (ii ) CI T Vs . S it i F in an cia l Co ns um er Fi n. Lt d. , 335 IT R 29 (De l. ); I.T.A. No.2275/Del/2015 & 1522/Del/2014 5 (ii i ) CI T V s. Us ha I ro n & F er ro M et al Co rp or ati on Lt d. , 29 6 I TR 1 40 (De l ) (iv ) CI T Vs . Sa lo ra I nt ern at io na l Lt d. , 30 8 IT R 1 99 (De l ); (v ) CI T Vs . L ib ert y G ro up Ma rk eti ng Di vis io n 3 15 IT R 12 5 (P & H ); (vi ) So ny I nd ia Pv t. L t d. Vs . DC IT , 31 5 IT R 1 50 (AT ) (D el. ) (VI I ) C IT V s. C ore He alt h Ca re L td ., 3 08 IT R 26 3 (G uj . ) 4.3 On p er us al o f the or der s o f th e a uth or it ie s belo w, w e fin d tha t t ho ug h du ri ng th e y ea r t he as se s see h ad ca pit al iz ed a s um of R s. 1, 79 ,7 7,1 81 /- und er t he he ad t an gib le / kn ow -h o w an d br an d de ve lo pm en t in t he bo ok s a nd ha d cl ai me d d ep re cia ti on the re on . H ow ev er , aft er re al iz in g th at t he ex pe n ses so cap it al iz ed ar e of Re ve nu e i n na tu r e, th e a ss es se e v i de it s rev is ed re tu rn c l ai med t he s am e as re ve nu e e xp en se an d con se qu en tl y re duc ed th e de pr ec ia tio n clai me d th er eo n. T he Id . CI T (Ap pe al s ) h as not ed t he f oll ow in g ma te ri al f acts :- i ) T he ap pe ll an t i s in th e bu si ne ss of m a nuf ac tu re a nd s ale of co un tr y liq uo r a nd In di an m ad e fo r eig n li qu or . ii ) In the co ur se o f i t s bu si ne ss a nd fo r the ma rk eti ng fo r its p ro du ct s th e a ppe ll an t in cu rs va rio us e xp en se s wh i ch ar e cla im ed a nd a ll ow e d a s re ve nu e e xp en se. iii ) As p er t he e xci s e pol ic y of S tat e s var io us ann ua l reg is tr at io n/ lic en se fe es ar e re qu ire d to be p aid in e ve ry st at e for th e ma nu fac tu r e a nd sa le of liq u or pr od uct s i n re s pec ti ve Sta te s. (iv ) In th e co ur se of i ts ex is ti ng b usi ne ss o f m anuf ac tu re a nd sal e of li qu or p ro duc ts , in ad dit io n to t he e xis ti ng b ra nd s in exi st in g S ta te s, du r ing th e y ea r, th e a ppe ll an t i ntro du ce d so me ne w b ra nd s an d al s o e nt er ed an d in cr e ase d fo cu s on ne w sta te s so as t o in cre as e th e s al e of it s pr od uc ts. v ) Bec au se o f ac c ou nti ng p ol ic y, t he ro uti ne b us in es s ex pen se s of th e n at ur e m en t ion ed a bo ve in re l ati on t o m ar ke ti ng of it s ne w b ra nd s / pr od uct s an d i n ne w St ate s, i nst ea d of de bit in g un der th e res pe ct i ve h ea ds of ex pe n dit ur e, .w er e c ap it ali ze d un der t he h ea d i nt a ngi bl e as se ts / br an d d ev el op me nt. I.T.A. No.2275/Del/2015 & 1522/Del/2014 6 4.4 O n t he b as is of ab ov e m at er ia l f a cts , t he I d. CI T (A ppe al s ) ha s c om e to t he co nc lu si on t hat the e xp en ses c la i med a s Rev en ue ex pe nse s in t hi s y ea r a re r out in e b us in es s e x pen se s req ui re d to b e in cu rre d in t he c ou rs e o f bu sin es s. T he ma r ket in g an d b ra nd pr om ot i on is an in te gr al p art of b us ine ss ac ti vit y o f the a ss es see c om p any a nd t he en ti re ex pe ns es ar e of r out in e bu sin es s e xpe ns es and ha ve b ee n i ncu rr ed in t he co urs e o f ru nni ng th e e xi st i ng bu si nes s. T he As ses si ng Of fi cer ha s n ot poi nt ed o ut an y s p eci fi c e xp en se, w hi ch is of en du ri ng ben ef it or h as b ee n i ncu rre d t o ac qu ir e any ca pit al as se t. Suc h exp en se s in r es pe ct of o n- go in g b usi ne ss a re u nd is put ed ly Rev en ue i n n at ur e. Un de r th e ab ov e f a cts , w e fu ll y co nc u r wi th the find in gs of t he Id. C IT (Ap pe al s ) also bec au se s i mil ar r ec ur ri ng e xpe ns es inc ur re d in ea rl i er ye ar s h av e be en al lo we d as R evenu e exp en se s. T he dec i sio ns re lie d u po n by t he I d. C IT (A p pea ls ) als o st re ng th en th e f in di ng a rr ive d at by h im u nd er t he fa ct s an d ci rc um st an ce s of t he pr es en t c as e on t he is su e. Th e H on’ bl e Su pre me co ur t i n the ca se of E mp ir e Ju te C om pa ny V s. CI T (su pr a ) h as bee n ple as ed t o h old t hat it i s on ly w hen a n end ur in g ad va nt ag e is in t he c ap it al fie ld t ha t th e ex pe ndi tu re wo ul d b e di sa ll ow abl e. I f a dv an ta ge of e nd ur in g benef it is i n the R eve nu e fi eld it wo ul d be on t h e R ev en ue ac co unt . T he Ho n’ ble j ur is dic ti o nal H ig h Co ur t of Del hi i n the cas e of CI T Vs. S it i Fi na nci al Co ns um er Fi n. L td . (s up ra ) ha s be en p lea se d to h old t ha t ad ve r tis em en t an d pu bl i cit y ex pe nse s ev en whe n su bst an ti al , ha vi n g bee n in cu rr ed t o fac il it ate b usin e ss, n o adv an ta ge in ca pi t al f ie ld is re su lte d. Ag ai n in the c as e of CI T Vs. Us ha I ro n & Fer ro Me ta l Co rp or ati on Lt d. (su pr a) t he Ho n’ ble ju ri sd ic ti o nal H ig h C ou rt of Del hi ha s bee n ple ase d t o hol d th at th e ex p end it ur e inc ur re d by th e a ss es se e t ow ar ds im pr ovi ng it s b us i nes s wa s fo r t he exp an si on of it s e xis ti ng bu sin es s. M er ely b eca us e th e a ss es se e t re at ed th e am ou nt as a cap it al ex pen di tu re in i ts bo ok s, i t w oul d n ot be bo un d by a s the re is no es to pp e ls ag ain st th e l a w an d j ust a ss es sm en t is t he obj ec t o f th e L eg is lat ur e un der t he p rov is io ns of the I. T. Ac t. Th e fi rs t a pp el lat e ord er on th e i ss ue i s c om pr eh ensi ve a nd rea so ne d o ne t o wh ich we f ul ly c o ncu r w it h. T he sa me i s up hel d. G ro un d No . 2 i s ac co rd in gly r ej ect ed .” 9 . Th e issu e is th u s n o t res-in teg ra an d th e id en tical i ss u e was ex amin ed b y th e Co -o rd in ate Ben ch i n Assessmen t Year 2 0 08 -09 . Th e Assessin g Offi cer h as also res ted i ts d ec is io n t o d en y th e I.T.A. No.2275/Del/2015 & 1522/Del/2014 7 cla i m o n th e b as is o f fin d in g s in Assess men t Yea r 20 0 8-0 9. Hen ce, in p ari ty with th e v iew t ak en b y th e ITAT, we d o n o t see an y erro r in th e fin d in g s g iv en by th e CIT(A) in fav o u r o f th e assesse e. We th u s see n o reaso n to in terfere w ith th e o rd er o f th e CIT(A). 1 0 . Gro un d No .1 o f th e ap p eal o f th e Re v en u e is d ismissed . 1 1 . Gro un d No .2 co n cern s ad d itio n o n a cco u n t o f la te d ep o sit o f emp lo y ee p ro v id en t fu n d . Th e Co -ord in ate Ben ch o f Trib u n al in ITA No .19 5 7 /Del/2 0 22 in th e case o f In n o v isio n Ltd . o rd er d ated 2 1 .0 9 .20 2 2 h as d ecid ed th e is su e in fav o u r o f th e as sessee . In p arity , we see th a t n o erro r h as b een co mmit ted b y th e CIT(A) wh ile g ran tin g reli ef to th e assess ee. We th u s d eclin e t o in terfere with th e o rd er o f t h e CIT(A). 1 2 . Gro un d no .2 o f th e ap p eal o f th e Rev en u e is d ismiss ed . ITA No .1 52 2 /Del/ 2 0 15 Assessmen t Year 2 0 1 1 -1 2 1 3 . Th e g ro u nd s o f ap p eal ra ised b y th e Rev en u e read as u n d er: 1. Wh eth er o n t he fac ts an d c ir cu ms t anc es of th e c as e an d i n la w, t he L d. C IT (A ) er re d i n del et in g t he ad dit io n ofR s. 2, 70 ,5 4, 19 4/ - ma de on a cc ou nt o f c ap it ali za ti on o f Br an d Pr om oti on e xp en se s. 2. Whe the r o n th e fac ts a nd c ir cu ms t anc es o f th e case , the Ld . CI T (A ) e rr ed in de let in g t he ad di tio n of Rs. 52 ,3 2,99 1/ - ma de on ac co un t of sh or t t er m ca pit al g ai n on s al e o f mutu al fu nd s ign or in g th e fac t tha t it w as n ot cl ai med e it he r i n o rig in al ret ur n or r evi se d re tur n fi le d. ” 1 4 . Gro un d No .1 is id en tica l to Gro un d No .1 o f ITA No .2 27 5 /Del/2 0 1 5 ex cep t fo r th e ch an g e in th e q u an tu m o f I.T.A. No.2275/Del/2015 & 1522/Del/2014 8 d isal lo wan ce. In p arity with th e p rin cip les ap p reciat ed in ITA No .2 27 5 /Del/2 0 1 5 , we see n o merit in th e g riev an ce o f th e Rev en u e. In o u r view, Th e CIT(A) h as n o t co mmit ted an y erro r wh ich may warran t in t erferen c e. 1 5 . Gro un d No .1 o f th e Rev en u e’s ap p ea l is d i smissed . 1 6 . Gro un d No .2 co ncern s ad d it io n o n acco u n t o f sh ort ter m cap it al g ain . 1 7 . Th e CIT(A) h as d e alt wi th th e issu e a s u n d er: “5 .5 Reg ar di ng th e G r ou nd No .5 of the ap pea l, th e Ld. Co un sel su bm it ted tha t by an i na dv er t ent mi sta ke , th e ap pel la nt co mp any ha d off er e d a n a mo un t o f R s. 52, 32 ,9 91 /- as sh or t te rm cap it al ga in, wh er eas th e sa me wa s in t he n at ur e o f exe mp t div id en d i nc om e. I t w as s ub mi tt ed th at d ur in g t he co ur se o f ass es sm en t p ro cee d ing , vi de let te r d at ed 3 .1 0. 20 13, th e L d. A O wa s re que st ed t o gi ve co rr ec t tre at me n t to th is i ncom e. T he L d. Co un sel w as ag gr i eve d t ha t t he Ld . AO to ok sh el ter in t he dec is io n of Go et ze (In dia ) L td . (S up r a ) a nd d id not al l ow t he la wfu l cl ai m of th e ap pel la nt . 5.5 .2 F ur ni sh in g fu rth er d et ai ls, t he L d. Co un se l su bm it t ed th at the a pp ell an t ha d ma de in ve st men t in mu tu al fu nd s an d as pe r the re le va nt sc he m es, th e e nt ir e a mo u nt of di vid en d ea rn ed wa s to be r ei nve st ed t her ei n an d on r ed em pti on o f th e sa me, t he ini ti al i nv es tm en t a mo un t an d t he d iv i den d r ei nve sted t he reo n i s rec ei ve d by th e co mp an y. I t w as su b mit te d t ha t th e s ai d amo un t of Rs. 52 ,3 2, 99 1/ - c om pr ise s of or igi na l in ve st me nt an d d i vid en d inc om e e ar ne d t he reo n. T he Ld . C o un sel al so in fo rm ed t hat acc or di ng ly , an a mo un t of R s. 31 ,4 6 ,35 5/ - wa s s ho wn in the ret ur n of in co me f o r AY 20 10 -1 1 as ex em pt di vi de nd in co me. A cop y of t he de ta il s of t he d ivi de nd i n co me fo r co mput at ion o f inc om e f or AY 2 01 0-1 1 w as f il ed b ef ore me . Th e L d. C ou nse l fil ed t he br ea d- up of th e sa me a s u nd e r: I.T.A. No.2275/Del/2015 & 1522/Del/2014 9 Particulars Date of Invt. Amount Invested Date of Redmp. Amount of Redmp. Div. Re- invest. Div. taken last year Div. income of AY 2011- 12 Capital Gain Invt. as 31.3.2011 Remark Reliance Mutual Fund/ Money Manager. No fresh investment during year. Investment in last year out of surplus IPO funds 25.9.2009 16,00,00,000 17.5.2010 16,40,26,308 40,26,308 31,46,365 879,953 Investment redeemed during the year. Exempt income received along with original Reliance Mutual Fund/ Money , Manager Invested from SB1, CC account 30.11.2010 2,00,00,000 2.12.2010 2,00,08,837 8,837 NA 8,837 0 Holding for 3 day only. Reliance Mutual Fund/ Money Manager, Dividend reinvest only 31.3.2010 NA NA 5,58,052 NIL 558,052 NA 558,052 Dividend income re- invested LIC MF Saving Plus Fund. Invested out of own funds from ICICI Bank account 20.5.2010 16,40,00,000 20.7.2010 16,51,97,846 11,97,846 NA 1,197,846 0 Investment made out of proceeds of redemption of Reliance Mutual Fund received SBI Mutual Fund. Invested from SBI, CC account. 31.3.2011 1,00,00,000 NA 0 NA 0 0 10,000,000 1 day TOTAL 26,44,688 10,558,052 T o t a l D i v i d e n d re c e i v e d = 3 1 , 4 6 , 3 5 5 (i n A Y 2 0 1 0 - 1 1 ) + 2 6 , 4 4 , 6 8 8 (i n A Y 2 0 1 1 - 1 2 ) = 5 7 , 9 1 , 0 4 3 5 . 5 . 3 T h e L d . Co u n s e l re l i e d u p o n t h e CB D T Ci r c u l a r No . 1 4 , d a t e d 1 1 . 4 . 1 9 5 5 , i n wh i c h i t wa s h e l d t h a t t h e d e p art m e n t sh o u l d n o t t a k e a d v a n t a g e o f t h e a s s e s se e ' s i g n o r a n c e t o co l l e c t m o r e t a x o u t o f h i m t h a n t h e l i a b i l i t y d u e t o h i m . R e l i a n c e w a s p l a c e d o n t h e B o m b a y H i g h Co u rt i n t h e c a se o f B a l m u k u n d A c h a r y a v . D CI T 3 1 0 I T R 3 1 0 , i n wh i c h i t wa s h e l d t h a t t h e a u t h o ri t i e s u n d e r t h e A c t a re o b l i g e d i n ac c o rd a n c e w i t h l a w. R e l i a n c e wa s a l s o m a d e o n t h e f o l l o w i n g c a se s: (i ) Ni r m a l a L M e h t a v . A . B a l a s u b ra m a n i a m , CI T (2 00 4 ) 2 6 9 I T R 1 (B o m ); (i i ) A CI T v . T e c h n o f a b E n g g . L t d . 2 0 0 9 T I O L , 6 6 4 IT A T (D e l ); a n d (i i i ) CI T v . R a m c o I n t e r n a t i o n a l , 3 3 2 I T R 0 3 0 3 (P &H) . 5 . 5 . 4 T h e L d . Co u n s e l a l so p l e a d e d t h a t n o n e w c l ai m b a se d o n n e w f a c t s h a s b e e n m a d e b y t h e a p p e l l a n t . R e l i a n c e w a s p l a c e d o n t h e d e c i si o n o f P u n j a b & H a ry a n a H i g h C o u rt i n t h e c a s e o f R a m c o I n t e r n a t i o n a l (S u p ra ), i n wh i c h h a v i n g r e f e r re d t o t h e G o e t z (I n d i a ), c a s e i t wa s h e l d t h a t a n y a d m i s si b l e c l a i m u n d e r I.T.A. No.2275/Del/2015 & 1522/Del/2014 10 t h e . A c t c a n b e m a d e d u ri n g t h e a s se s sm e n t p ro c e e di n g t h r o u g h f i l i n g o f l e t t e r a n d f i l i n g o f r e v i s e d re t u rn i s n ot m a n d a t o ry . 5 . 5 . 5 W i t h o u t p r e j u d i c e , t h e L d . C o u n se l su b m i t t e d t h a t t h i s c l a i m c a n b e f i l e d b e f o r e m e a s t h e G o e t z (I n d i a ) de c i s i o n a l l o w s f i l i n g o f n e w c l a i m b e f o re t h e a p p e l l a t e a u t h o ri t i es . ” 1 8 . On a p eru sal o f the o rd er o f th e CIT(A), it ap pears th at o win g to an in ad v erten t mi stak e , th e as sessee h as wro n gly o ffered ex emp t in co me rec eiv ed b y way o f d iv id en d as sh o rt te rm c ap it al g ain wh ich is o t h erwise n o t tax ab le in law. Th e C IT(A) h as ex amin ed th e issu e th read b are an d fo u nd as a matt er o f fac t th a t su ch in co me in ad v erten tly o ffered as tax ab l e in co me u n d er the h ead ‘Sh o rt Term Cap it al Gain ” is e x emp t in co me in de ed an d n o t su scep tib l e to t ax atio n . 1 9 . In th ese fac ts , th e CIT(A), in o u r v ie w, h as rig h t ly ap p l ied th e u n d erly in g p rin ciples o f CBDT Cir c u lar No .1 4 d ated 1 1 .0 4 .19 55 wh erein it was o b serv ed th at th e Dep artmen t sh o u ld n o t tak e ad v an tag e o f th e i g n o ran ce o f th e a ssessee an d co lle c t mo re tax with o u t th e sa me b ein g d u e. Articl e 2 6 5 o f th e Co n st itu t io n o f In d ia p ro v id es th at n o tax sh al l b e l ev ied o r co llected ex cep t b y th e au th o rity o f la w. Acq u iescen ce can n o t tak e away fro m a p arty , th e re lie f th a t h e is en t it led to . 2 0 . Th e Ho n ’b le Alla h ab ad Hig h Cou rt in S mt. Ra j Ra n i Gu la ti vs. CIT (2 0 1 2 ) a s rep o rted in 2 4 9 CTR 5 1 (A ll . ) o b serv ed in si mi lar fac ts with referen ce to GOETZE (In d ia ) Ltd . vs. CIT (2 0 0 6 ) 2 84 ITR 32 3 (S C) th at th e a ssessee was en ti tl ed to raise leg al is su e b e fo re First Ap p el la te Au th o rity wh ich p o ssessed co - termin u s p o wers si mi lar to th e Asses sin g Offic er. In th at case , th e assesse e fi led th e retu rn o f in co me an d in ter a lia d ec lared Lo n g Term Cap ita l Gai n tax ab le at 2 0 % wh ich was accep ted b y th e I.T.A. No.2275/Del/2015 & 1522/Del/2014 11 Assessin g Offic er. Th e assesse e d id n o t fi le rev i se re tu rn . Befo re th e CIT(A), th e as sessee co n ten d ed t h at th e asse ssee b y mi stak e o ffer ed cap i tal g ain tax a t 2 0 % whereas th e tax ra te ap p licab l e stan d s at 1 0 % as p er th e p ro v isio n s o f law. In th ese fa cts , th e reli ef g ran ted b y th e CIT(A) was d eclin ed b y th e Trib u n al. Th e Ho n ’b le Hig h Co u rt res to red th e o rd er o f th e CIT(A). 2 1 . Th u s, wh ere th e CIT(A) fo u n d on fac ts th at th e red e mp t io n amo u n t o f in v es tmen t also co mp rises o f cert ain ex e mp t d iv id en d in co me wh ich h as b een wro ng ly o ffered fo r cap i ta l ga in tax , th e act io n o f th e CIT(A) in g ran tin g su itab le rel ie f can n o t b e fau lt ed . In th e ab sen ce o f an y reb u ttal o n fac ts , we see n o reaso n to in ter fere with th e reli e f g ran ted b y the CIT(A) in acco rd with law. We th u s see n o me rit in th e Gro u n d No .2 o f th e R ev en u e’s Ap p eal. 2 2 . Gro un d No .2 o f th e Rev en u e’s Ap p eal is d i smissed . 2 3 . In th e resu l t, th e a p p eal o f th e Rev en u e is d ismiss ed . Order pronounced in the open Court on 18/10/2022. Sd/- Sd/- [KUL BHARAT ] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /09/2022 Prabhat