Spark Capital Advisors (India) Private Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2623/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95906 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: JHARNA
• Keywords: Bad and doubtful debts; Deemed dividend
• Section: 143(3); 14A; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . ' #$ , % & BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ./ ITA NO.2623/MDS/2014 ASSESSMENT YEAR : 2010-11 M/S SPARK CAPITAL ADVISORS (INDIA) PRIVATE LTD., NO.2, REFLECTIONS, LEITH CASTLE CENTER STREET, SANTHOME HIGH ROAD, CHENNAI - 600 028. PAN : AADCS 0211 P V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(4), CHENNAI - 600 034. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : MS. JHARNA, CA +,)* - . / RESPONDENT BY : SHRI A.B. KOLI, JCIT ' - / / DATE OF HEARING : 06.08.2015 01 - / / DATE OF PRONOUNCEMENT: 19.08.2015 /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V I, CHENNAI, DATED 25.06.2014 RELEVANT TO THE ASSESSMENT YEAR 20 10-11. 2 I.T.A. NO.2623/MDS/14 2. THERE IS A DELAY OF 54 IN FILING THE APPEAL. TH E ASSESSEE HAS FILED A PETITION WHEREIN THE ASSESSEE HAS SUBMITTED THAT AN APPLICATION FOR RECTIFICATION UNDER SECTION 154 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') WAS MADE ON 15 TH JULY, 2014 AGAINST THE ORDER OF THE CIT(APPEALS) SINCE THERE WAS A MISTAKE APPARENT ON RECORD. CONSIDERING THE RECTIFICATION PETITION, TH E ASSESSEE HAD NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF THE CIT(A PPEALS). HOWEVER, THE CIT(APPEALS) HAS DISPOSED OF THE RECTI FICATION PETITION. THE ASSESSEE, AS AN ABUNDANT CAUTION ON THE ISSUE A ND DUE TO HUGE DEMAND, HAS PREFERRED AN APPEAL BEFORE THIS TR IBUNAL. THEREFORE, THERE IS A DELAY OF 54 DAYS IN FILING TH E APPEAL AND THE ASSESSEE HAS PRAYED FOR CONDONATION OF THE SAME. 3. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT RAIS ED ANY SERIOUS OBJECTION FOR CONDONING THE DELAY IN FILING THE APPEAL. 4. WE HAVE HEARD BOTH SIDES AND PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS A DELAY OF 54 DAYS IN FILING THE APPEAL BY THE ASSESSEE. W E FIND THAT THE ASSESSEE HAS EXPLAINED SUFFICIENT CAUSE IN FILING T HE APPEAL WITH A DELAY OF 54 DAYS. THEREFORE, WE FIND THAT THERE IS A GENUINE CAUSE 3 I.T.A. NO.2623/MDS/14 NOT FILING THE APPEAL IN TIME. THEREFORE, WE CONDO NE THE DELAY AND THE APPEAL FILED BY THE ASSESSEE IS ADMITTED. 5. NOW LETS DEAL WITH THE MERITS OF THE CASE. THE ASSESSEE IS A COMPANY M/S SPARK CAPITAL ADVISORS (INDIA) PRIVATE LIMITED, ENGAGED IN THE BUSINESS OF INVESTMENT, BANKING, POR TFOLIO MANAGEMENT, CORPORATE FINANCE ADVISORY, SECURITIES BROKING AND TRADING IN SECURITIES. THE ASSESSEE FILED THE RETU RN OF INCOME DECLARING TOTAL INCOME OF ` 1,80,37,166/-. THE CASE OF THE ASSESSEE WAS ALSO SELECTED FOR SCRUTINY AND WITH DUE PROCESS , THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT. THE A.O. HAS MADE TWO ADDITIONS, VIZ. DISALLOWANCE UNDE R SECTION 14A OF THE ACT AND DEEMED DIVIDEND UNDER SECTION 2(22)( E) OF THE ACT. 6. AGAINST THE ORDER OF THE A.O., THE ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE CIT(APPEALS). BEFORE T HE CIT(APPEALS), THE ASSESSEE RAISED A GROUND RELATING TO DISALLOWAN CE UNDER SECTION 14A OF THE ACT ONLY. HOWEVER, THE ASSESSEE FILED ADDITIONAL GROUND BEFORE THE CIT(APPEALS) ON 7 TH JUNE, 2013 IN RESPECT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT A ND SUBMITTED THAT THE ASSESSEE HAS ALREADY FILED RECTIFICATION B EFORE THE ASSESSING OFFICER IN RESPECT OF DEEMED DIVIDEND AND ALSO DISALLOWANCE OF BAD DEBTS AND PRAYED FOR ACCEPTANCE OF THE 4 I.T.A. NO.2623/MDS/14 ADDITIONAL GROUND FILED BY THE ASSESSEE. HOWEVER, THE LD. CIT(APPEALS), BY ORDER DATED 25.05.2014, I.E. SUBSE QUENT TO THE ADDITIONAL GROUND FILED BY THE ASSESSEE, ADJUDICATE D ONLY THE ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT. INSO FAR AS DEEMED DIVIDEND IS CONCERNED, THE CIT(APPEALS) OBSERVED TH AT NO ADDITIONAL GROUNDS WERE FILED DURING THE COURSE OF APPELLATE P ROCEEDINGS AGAINST THE ADDITION OF ` 2,14,00,000/- MADE UNDER SECTION 2(22)(E) OF THE ACT AND HENCE THE SAME IS NOT ADJUDICATED. 7. AGAINST THE ORDER PASSED BY THE CIT(APPEALS), TH E ASSESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL BY RAISING TWO GROUNDS IN RESPECT OF DISALLOWANCE UNDER SECTION 14A OF THE AC T AS WELL AS IN RESPECT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) O F THE ACT AND SUBMITTED THAT ADDITIONAL GROUND HAD BEEN RAISED BE FORE THE CIT(APPEALS) IN RESPECT OF DEEMED DIVIDEND, ON 7 TH JUNE, 2013 AND TO THAT EFFECT, THE ASSESSEE HAS ALREADY FILED THE GROUND BEFORE THE CIT(APPEALS). 8. WE FIND THAT ON 7 TH JUNE, 2013, THE ASSESSEE FILED AN ADDITIONAL GROUND AND THERE IS A STAMP ALSO BY THE DEPARTMENT HAVING RECEIVED THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND TH AT THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN NOT CONSIDERING TH E ADDITIONAL GROUND 5 I.T.A. NO.2623/MDS/14 FILED BY THE ASSESSEE. HE ADJUDICATED ONLY THE ISS UE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT. WE, THE REFORE, SET ASIDE THE ORDER PASSED BY THE CIT(APPEALS) AND DIRECT HIM TO ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN RESPECT OF THE ISSUE OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT A ND DECIDE AFRESH IN ACCORDANCE WITH LAW. SO FAR AS THE ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT IS ALSO CONCERNED, WE DIRECT THE LD. CIT(APPEALS) TO CONSIDER IT AFRESH TO REACH A FINAL ITY OF THE APPEAL. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 19 TH AUGUST, 2015 AT CHENNAI. SD/- SD/- ( . ) ( . ' #$ ) (A. MOHAN ALANKAMONY) (V. DURGA RAO) /ACCOUNTANT MEMBER % /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 19 TH AUGUST, 2015. KRI. 3 - +%/45 651/ /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. ' 7/ () /CIT(A)-VI, CHENNAI-34 4. ' 7/ /CIT-VI, CHENNAI 5. 5 9# +%/% /DR 6. #$ : /GF.