DCIT, Circle- 12(1), New Delhi V. IFCI Ltd., New Delhi

ITA 2895/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4617 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA
• Keywords: Capital asset; Depreciation; Unabsorbed depreciation; Rule 8D
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.2895/DEL/2018 (ASSESSMENT YEAR 2012-13) DY. CIT, CIRCLE-12(1), NEW DELHI. VS. M/S IFCI LTD., IFCI TOWER, 61, NEHRU PLACE, NEW DELHI-110 019. PAN AAACT 0668G (APPELLANT) (RESPONDENT) APPELLANT BY MS. ANIMA, SR. DR RESPONDENT BY SH. S. VASUDEVAN, CA SH. SHASHANK SHARMA, ADV. DATE OF HEARING 14.07.2021 DATE OF PRONOUNCEMENT 30.09.2021 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE DEPARTMENT AGAINS T ORDER DATED 28.02.2018 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-42, NEW DELHI {CIT(A)} FOR ASSESSMEN T YEAR 2012-13. 2 ITA NO.2895/DEL/2018 DCIT VS. IF CI LTD. 2.0 THE BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF LEASING AND FINA NCE. THE ASSESSEE PROVIDES FINANCIAL ASSISTANCE IN THE FORM OF SHORT, MEDIUM OR LONG TERM LOANS FOR WORKING CAPITAL REQUIREMENTS OR EQUITY RELATED REQUIREMENTS AND ALSO FINANCES PROJECTS IN THE FORM OF RUPEE LOANS, FOREIGN CURRENCY LOANS, UNDERWRITING AN D SUBSCRIBING TO THE CAPITAL ISSUES. THE RETURN OF IN COME WAS FILED DECLARING AN INCOME OF RS.1,67,58,68,134/- AFTER SE T OFF AGAINST BROUGHT FORWARD BUSINESS LOSS OF RS.1,95,84,65,473/- AND UNABSORBED DEPRECIATION OF RS.1,70,83,02,735/-. THE BOOK PROFITS U/S 115JB OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WERE COMPUTED AT RS.5,50,26,19,665/-. SUBSEQUENTLY, THE ASSESSEE REVISED ITS RETURN OF INCOME SHOWING A TOTAL INCOME OF RS.1,42,97,88,723/- AFTER SETTING OFF BROUGHT FORWAR D BUSINESS LOSS OF RS.1,95,81,90,350/- AND UNABSORBED DEPRECIATION OF RS.1,70,83,02,735/- AND BOOK-PROFITS U/S 115JB AT RS.5,50,26,19,665/-. THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.1,52,19,72,150/- AFTER MAKING DISALLOWANCE OF DEPRECATION AMOUNTING TO RS.1,09,18,928/- AND DISALLOWANCE U/S 14A OF THE 3 ITA NO.2895/DEL/2018 DCIT VS. IF CI LTD. ACT AMOUNTING TO RS.8,12,64,498/-. THE BOOK-PROFIT WAS COMPUTED AT RS.5,58,38,84,160/- AFTER MAKING DISALLOWANCE U/ S 14A AMOUNTING TO RS.8,12,64,498/-. 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. F IRST APPELLATE AUTHORITY CHALLENGING THE ACTION OF THE A SSESSING OFFICER IN MAKING AN ADDITION TO BOOK-PROFITS OF THE ASSESS EE BY THE AMOUNT DISALLOWED U/S 14A OF THE ACT. THE LD. FIRST APPELL ATE AUTHORITY DELETED THE AFORESAID ADDITION BY FOLLOWING THE ORDE R OF THE SPECIAL BENCH OF ITAT DELHI IN THE CASE OF ACIT VS. VIREET INVESTMENTS PVT. LTD REPORTED IN [2017] 82 TAXMANN.COM 415 (DELHI TR IB.) (SB). 2.2 NOW, THE DEPARTMENT HAS APPROACHED THIS TRIBUNA L AND HAS CHALLENGED THE DELETION OF DISALLOWANCE BY THE LD. CIT(A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSING OFFICER IS WRONG IN APPLYING THE PROVISIONS OF SECTION 14A REA D WITH RULE 8D IN COMPUTING THE BOOK PROFIT AS PER SECTION 115J B OF THE IT ACT WHEREAS EXPRESS PROVISIONS OF CLAUSE (F) OF EXP LANATION TO SECTION 115JB STATE OTHERWISE. 4 ITA NO.2895/DEL/2018 DCIT VS. IF CI LTD. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING TH E RIGHT TO AMEND, MODIFY, ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF APPEAL. 3.0 AT THE OUTSET, THE LD. AUTHORIZED REPRE SENTATIVE (AR) SUBMITTED THAT THE APPEAL OF THE DEPARTMENT WAS LIA BLE TO BE DISMISSED AT THE VERY THRESHOLD ITSELF CONSIDERING THE ORDER OF THE SPECIAL BENCH OF THE ITAT DELHI IN THE CASE OF ACIT VS. VIREET INVESTMENTS PVT. LTD. REPORTED IN [2017] 82 TAXMANN .COM 415 (DELHI TRIB.) (SB). THE LD. AR ALSO SUBMITTED THAT IDENTICAL ISSUE HAD BEEN DECIDED BY THIS TRIBUNAL IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2008-09 AND 2009-10 VIDE ORDER DATED 31.08.2020 IN ITA NO.2062/DEL/2012 AND ITA NO.2473/DEL/2014 RESPECTIVELY. 4.0 PER CONTRA, THE LD. SR. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER BUT FAIRLY ACCEPTED THAT THE ISSU E STOOD COVERED AGAINST THE REVENUE. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AN D HAVE ALSO PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE T HROUGH THE 5 ITA NO.2895/DEL/2018 DCIT VS. IF CI LTD. JUDGMENTS RELIED UPON BY THE LD. AR IN THIS REGARD. WE AGREE WITH THE CONTENTION OF THE LD. AR THAT THE CASE OF THE R EVENUE IS NOT TENABLE FOR THE REASON THAT ITAT DELHI SPECIAL BENC H IN THE CASE OF ACIT VS. VIREET INVESTMENTS (SUPRA) HAS CATEGORICAL LY HELD THAT COMPUTATION UNDER CLAUSE (F) OF EXPLANATION-1 TO SE CTION 115JB (2) OF THE ACT IS TO BE MADE WITHOUT RESORTING TO THE CO MPUTATION AS CONTEMPLATED U/S 14A READ WITH RULE 8D OF THE INCOME TAX RULES, 1962. 5.1 WE FURTHER NOTE THAT THE CO-ORDINATE BE NCH OF ITAT DELHI IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2008-09 AND 2009-10 HAS AGAIN DECIDED THE IDENTICAL ISSUE IN ASSESSEES FAVOUR IN PARAGRAPH 69 OF THE SAID ORDER BY FOLLOWING THE ORDE RS OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF ACIT VS. VIREET IN VESTMENTS PVT. LTD. (SUPRA). 5.2 WE FURTHER NOTE THAT THE HONBLE DELHI H IGH COURT IN THE CASE OF PR. CIT VS. BHUSHAN STEEL LTD. IN ITA NO.59 3/2015 VIDE ORDER DATED 29.09.2015, WHILE UPHOLDING THE VIEW TAKE N BY THE ITAT, HELD THAT ADDITION CANNOT BE MADE U/S 14A TO THE BOOK- 6 ITA NO.2895/DEL/2018 DCIT VS. IF CI LTD. PROFITS IN ABSENCE OF ANY SPECIFIC REFERENCE IN SEC TION 115JB OF THE ACT. 5.3 ACCORDINGLY, RESPECTFULLY FOLLOWING THE SET TLED JUDICIAL POSITION IN THIS REGARD ON THE ISSUE, WE DISMISS TH E GROUNDS RAISED BY THE DEPARTMENT. 6.0 IN THE FINAL RESULT, THE APPEAL OF T HE DEPARTMENT STANDS DISMISSED. ORDER PRONOUNCED ON 30 TH SEPTEMBER, 2021. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 30/09/2021 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI