Steriplate Pvt. Ltd., New Delhi V. ACIT, Faridabad

ITA 2808/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7193 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 14-06-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 06-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N J SINGH
• Assessee Lawyers: RUPESH J AIN; BHATVITA KUMAR
• Keywords: Retrospective amendment
• Section: 234B; 115JB; 154; 2

Judgement Text

1 2808/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2 NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER ITA NS. 2808/DEL/2014 ASSTT. YR: 2004-05 STERIPLATE PVT. LTD. VS. ACIT CIRCLE-II, A-232, 1 ST FLOOR, PHASE-1, FARIDABAD. OKHLA INDUSTRIAL AREA, NEW DELHI. PAN: AAACS 8953 M ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI RUPESH JAIN ADV. & MS. BHATVITA KUMAR ADV. RESPONDENT BY : SHRI N.J. SINGH SR. DR DATE OF HEARING : 14/06/2016. DATE OF ORDER : 21/06/2016. O R D E R THIS IS ASSESSEES APPEAL AGAINST THE ORDER DATE D 24.2.2014, PASSED BY THE LD. CIT(A)-2, FARIDABAD IN APPEAL NO. 558/20 11-12, RELATING TO AY 2004-05. 2. SOLE EFFECTIVE GROUND RAISED IS AS UNDER: THE LD CIT(A) ERRED, IN LAW AND ON FACTS AND CIRCU MSTANCES OF THE CASE, IN HOLDING THAT INTEREST UNDER SECTION 2 34B OF THE INCOME-TAX ACT IS CHARGEABLE ON THE INCREMENTAL AMO UNT OF TAX COMPUTED U/S 115JB WHICH AROSE DUE TO RETROSPECTIVE AMENDMENT FROM 1 ST APRIL, 2001 BY INSERTION OF CLAUSE (I) TO THE EXPLANATION 1 OF SECTION 115JB(2) BY THE FINANCE (N O. 2) ACT, 2009. 3. BRIEF FACTS OF THE CASE ARE THAT WHILE GIVING EF FECT TO THE ORDER IN ITA 931/2008 DATED 30.05.2011 OF THE HONBLE PUNJAB & H ARYANA HIGH COURT, 2 2808/DEL/2014 THE AO, INTER ALIA, ADDED TO THE TOTAL BOOK PROFIT OF RS. 15,71,738/- PROVISION OF DIMINUTION IN VALUE OF INVESTMENT AM OUNTING TO RS. 87,42,414/- AND, ACCORDINGLY, DETERMINED THE BOOK P ROFIT U/S 115JB AT RS. 90,89,860/-. HE LEVIED INTEREST U/S 234B, 234D AND ALSO WITHDREW INTEREST ALLOWED U/S 244A. 4. ASSESSEE FILED RECTIFICATION APPLICATION U/S 154 CLAIMING THEREIN THAT INTEREST U/S 234B WAS NOT PAYABLE FOR THE REASON TH AT THE DEMAND HAD ARISEN CONSEQUENT TO THE AMENDMENT MADE IN THE FINANCE (NO . 2) ACT, 2009, MADE EFFECTIVE RETROSPECTIVE FROM 1.4.2001 BY INSERTING CLAUSE (I) TO THE EXPLANATION 1 OF SECTION 115JB(2) OF THE ACT. THE A O, HOWEVER, REJECTED THE ASSESSEES CLAIM. LD. CIT(A) CONFIRMED THE AOS ACTION. 5. AT THE TIME OF HEARING, LD. COUNSEL SUBMITTED TH AT IN THE SISTER CONCERNS CASE OF ASSESSEE VIZ. M/S STERIPLAST PVT. LTD. THE ITAT DELHI BENCH VIDE ITS ORDER DATED 22.6.2012 IN ITA NO. 449 1/DEL/2011, HAS ALLOWED THE ASSESSEES CLAIM FOLLOWING HONBLE CALCUTTA HIG H COURTS DECISION IN THE CASE OF EMAMI LTD. VS. CIT 337 ITR 470 (CAL.). HE F URTHER SUBMITTED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . JSW ENERGY LTD. 379 ITR 36 HAS ALSO TAKEN THE SAME VIEW OBSERVING I N PARA 17 AS UNDER: 17. IN THE PRESENT CASE, WHAT THE ASSESSEE HAS POI NTED OUT IS THAT SOME OF THE AMOUNTS INCLUDED IN THE BOOK PROFI TS AS PER EXPLANATION (H) TO SECTION 115JB WERE BROUGHT IN B Y THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2001. THE ASSESSEE CANNOT BE HELD TO BE LIABLE FOR FAILIN G TO MAKE A PROVISION FOR PAYMENT OF ADVANCE TAX WHICH WAS NOT POSSIBLE ON THE LAST DATE AS PER THE LAW THEN PREVAILING. THUS, CLAUSE (H) WHICH IS REPRODUCED ABOVE HAVING BEEN BROUGHT IN WI TH RETROSPECTIVE EFFECT BUT FINANCE ACT 2008, THE ADVA NCE TAX COMPUTATION BY THE ASSESSEE FOR THE YEAR 2006-07 CA NNOT BE FAULTED AND IT CANNOT BE SAID THAT THE ASSESSEE IS IN DEFAULT AND, 3 2808/DEL/2014 THEREFORE, THERE IS ANY LIABILITY TO PAY INTEREST I N TERMS OF SECTION 234B OF THE INCOME-TAX ACT, 1961 . 6. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLL OWING THE DECISIONS OF HONBLE HIGH COURTS, I SET ASIDE THE ORDERS OF AUT HORITIES BELOW ON THE ISSUE IN QUESTION AND ALLOW THE ASSESSEES CLAIM AND DELE TE THE INTEREST LEVIED U/S 234B OF THE ACT. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCEMENT IN OPEN COURT ON 21/06/2016. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 21/06/2016. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.