The ACIT, Central Circle-1(3), Ahmedabad V. The Sandesh Limited, Ahmedabad

ITA 2920/AHD/2011

• Counselvise Citation: 292020514 RSA 2011
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 25-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R C SHAH
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI A K GARODIA ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER ITA NOS.2920 & 2921/AHD/2011 (ASSESSMENT YEARS:-2005-06 & 2008-09) THE ASSISTANT COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-1(3), ROOM NO.304, 3 RD FLOOR, AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD V/S THE SANDESH LIMITED, SANDESH BHAVAN, LAD SOCIETY ROAD, AHMEDABAD-380054 PAN: AAACT 5730 D [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI VINOD TANWANI, SR. DR ASSESSEE BY:- SHRI R C SHAH, AR DATE OF HEARING:- 12-03-2012 DATE OF PRONOUNCEMENT:- 20-04-2012 O R D E R PER KUL BHARAT (JM) :- THESE TWO APPEALS HAVE BEEN FILED BY REVENUE AGAINST COMMON ORDER DATED 02-09-2011 PA SSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-II I, [HEREINAFTER REFERRED TO AS THE LEARNED CIT(A)] A HMEDABAD FOR ASSESSMENT YEARS (AYS) 2005-06 AND 2008-09. ITA NO.2920/AHD/2011: 2 2 2 IN THIS APPEAL THE GRIEVANCE OF REVENUE IS RESTRI CTING THE DISALLOWANCE TO RS.75,000/- OUT OF RS.10,80,058/- M ADE U/S 14A OF THE INCOME-TAX ACT, 1961. THE LEARNED DR CONTEN DED THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE. ON THE CONTRARY, THE LEARNED AR SUBMITTED THAT ACTI ON OF AO IN INVOKING RULE 8D IS EX-FACIE ILLEGAL IN VIEW OF THE FACT THAT THE CASE PERTAINS TO THE AY 2005-06. THE LEARNED AR RE LIED UPON VARIOUS CASE LAWS TO BUTTRESS HIS CONTENTION. THE L EARNED AR HAS RELIED UPON THE JUDGMENTS PASSED BY HONBLE CO-ORDI NATE BENCH IN ITA NO.4046/AHD/2009 TITLED AS MINDA INVESTMENTS LTD. VS. DCIT (2011) 138 TTJ (DEL) 240, WHEREIN IT HAS BEEN HELD THAT RULE 8D IS NOT RETROSPECTIVE AND CAN NOT BE APPLIED TO THE AY 2006-07. 3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY THE RESPECTIVE REPRESENTATIVES OF THE PARTIES. MANY JUD GMENTS HAVE BEEN PASSED BY CO-ORDINATE BENCHES AND HONBLE HIGH COURT ON THE ISSUE IN QUESTION. FOLLOWING RATIO DECIDED IN M INDA INVESTMENT LTD. (SUPRA), WE REMIT THE MATTER BACK T O THE FILE OF AO TO DECIDE THE MATTER AFRESH IN THE LIGHT OF JUDI CIAL PRONOUNCEMENTS. THIS APPEAL IS ALLOWED FOR STATISTI CAL PURPOSE. ITA NO.2921/AHD/2011: 4 IN THIS APPEAL THE REVENUE IS AGGRIEVED BY THE DE LETION OF DISALLOWANCE OF RS.5,57,230/- MADE U/S 14A OF THE A CT AND ALSO ADDITION OF RS.7,70,047/- MADE U/S 41(1) OF THE ACT . THE LEARNED DR SUBMITTED THAT THE YEAR IN QUESTION IS AY 2008-0 9, THEREFORE, 3 3 RULE 8D IS RIGHTLY INVOKED BY THE AO. ON THE CONTRA RY, LEARNED AR ARGUED THAT RULE 8D WOULD NOT APPLY AUTOMATICALL Y. 5 WITH REGARD TO GROUND NO.1, WE HAVE ALREADY DECID ED THE SIMILAR ISSUE IN AY 2005-06 AND MATTER HAS BEEN RES TORED BACK TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH. IN THIS YEAR ALSO, WE REMIT THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF JUDICIAL PRONOUNCEMENT AS STATED HEREINABOVE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE. 6 WITH REGARD TO GROUND NO.2 IN THIS APPEAL REGARDI NG DELETION OF ADDITION OF RS.7,70,047/-, BOTH THE PAR TIES AGREED THAT THE ISSUE IS COVERED BY THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. GP INTERN ATIONAL LTD. (2010) 229 CTR (P&H) 86, WHEREIN THE HONBLE HIGH C OURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSE RVING THAT THE TRIBUNAL HAS RIGHTLY COME TO THE CONCLUSION THAT TH E AFORESAID LIABILITY OF THE ASSESSEE CANNOT BE SAID TO HAVE CE ASED TO EXIST AND THE PROVISIONS OF SECTION 41(1) AND EXPLANATION TO THIS PROVISION ARE NOT APPLICABLE, BECAUSE THE ASSESSEE IS STILL SHOWING IT AS A LIABILITY IN ITS BOOKS AND HAS NOT WRITTEN OFF THE SAME. IN THE PRESENT CASE ALSO, THE FACTS ARE SIMILAR AND TH EREFORE, FOLLOWING THE AFORESAID DECISION OF THE HONBLE HIG H COURT IN THE CASE OF GP INTERNATIONAL LTD. (SUPRA), WE DECIDE TH E ISSUE IN FAVOUR OF THE ASSESSEE. THIS GROUND RAISED BY THE R EVENUE STANDS DISMISSED. 4 4 7 IN THE RESULT, ITA NO.2920/AHD/2011 IS ALLOWED FO R STATISTICAL PURPOSE AND ITA NO.2921/AHD/2011 IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT TODAY ON 20-04-2012 SD/- SD/- (A K GARODIA) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER DATE : 20-04-2012 COPY OF THE ORDER FORWARDED TO: 1. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE-1(3), ROOM NO.304, 3 RD FLOOR, AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD 2. THE SANDESH LIMITED, SANDESH BHAVAN, LAD SOCIETY ROAD, AHMEDABAD-380054 3. CIT CONCERNED 4. CIT(A)-III, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD