DCIT - 10(1)(1), MUMBAI V. HINDUJA VENTURES LTD. , MUMBAI

ITA 2992/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4843 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 09-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.2992 & 2993/M/2018 ASSESSMENT YEARS: 2012-13 & 2013-14 DCIT-10(1)(1), ROOM NO.209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. HINDUJA VENTURES LTD., 49/50, IN CENTRE, 12 TH ROAD, MIDC, ANDHERI (E), MUMBAI 400 093 PAN: AAACH2058N (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI HARI RAHEJA, A.R. REVENUE BY : SHRI MANOJ KUMAR SINGH, D.R. DATE OF HEARING : 08.05.2019 DATE OF PRONOUNCEMENT : 13.05.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED TWO APPEALS HAVE BEEN PREFERRED B Y THE REVENUE AGAINST THE ORDER DATED 27.02.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2012-13 & 2013-14. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THE VAR IOUS GROUNDS OF APPEALS IN BOTH THE YEARS IS AGAINST NON CONFIRMATION OF DISALLOWANCE AS MADE BY THE AO UNDE R SECTION 14A OF THE ACT READ WITH RULE 8D TO BOOK PROFIT AS UNDER SECTION 115JB OF THE ACT, 1961. ITA NOS.2992 & 2993/M/2018 M/S. HINDUJA VENTURES LTD. 2 3. THE FACTS IN BRIEF ARE THAT THE AO IN THE ASSESS MENT PROCEEDINGS CALCULATED THE DISALLOWANCE UNDER SECTI ON 14A READ WITH RULE 8D AT RS.1,38,71,122/- IN A.Y. 2012-13 AN D RS.94,77,094/- IN A.Y. 2013-14 AND ADDED THE SAME W HILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF TH E ACT. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PAR TLY SUSTAINED THE ADDITION UNDER SECTION 14A READ WITH RULE 8D WHILE FULLY DELETED THE ADDITION MADE UNDER SECTION 115JB OF THE ACT BY OBSERVING AND HOLDING AS UNDER: THE SUBMISSION AND ARGUMENTS MADE BY THE AR AND CA SE LAWS RELIED UPON HAS BEEN DULY CONSIDERED ANT THE ISSUE BEING DIRECTLY C OVERED BY THE DECISION OF HON'BLE BOMBAY HIGH COURT IN CIT VS. BENGAL FINANCE & INVESTMENTS PVT. LTD IN ITS ORDER DATED 05..01.2018 WHERE IN THE HON'BLE BOMBAY HIGH COURT HAS DISMISSED THE APPEAL OF THE DEPARTMENT AND HELD THAT 'SO FAR AS QUESTION (B) IS CONCERNED, THE IMPUGNED ORDER OF THE TRIBUNAL FOLIOWED ITS DECISION IN M/S. ESSAR TELEHOLDINGS LT D. V/S. DCIT IN ITA NO. 3850/MUM/2Q10 TO HELD THAT AN AMOUNT DISALLOWED UND ER SECTION 14A OF THE ACT CANNOT BE ADDED TO ARRIVE AT BOOK PROFIT FO R PURPOSES OF SECTION 115JB OF THE ACT. THE REVENUE'S APPEAL AGAINST THE ORDER OF THE TRIBUNAL IN M/S. ESSAR TELEHOLDINGS (SUPRA) WAS DISMISSED BY TH IS COURT IN INCOME TAX APPEAL NO.438 OF 2012 RENDERED ON 7TH AUGUST, 2014. IN VIEW OF THE ABOVE, QUESTION (B) DOES NOT RAISE ANY SUBSTANTIAL QUESTIO N OF LAW.' IN VIEW OF THE ABOVE DISCUSSED RATIO, AS THE ISSUE IS DIRECTLY COVERED BY THE ABOVE REFERRED JUDGMENT OF HON'BLE BOMBAY HIGH COURT, THI S GROUND OF THE APPELLANT IS ALLOWED AND THE AO IS DIRECTED TO COMPUTE THE BOOK PROFIT U/S. 115JB WITHOUT CONSIDERING THE DISALLOWANCE U/S. 14A. 5. NOW THE REVENUE HAS CHALLENGED THE DELETION OF DISALLOWANCE MADE U/S 14A RULE 8D TO THE BOOK PROFI TS IN THESE APPEALS BY THE LD CIT(A). AFTER HEARING BOTH THE PA RTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT TH E CASE OF THE ASSESSEE IS COVERED IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE BY THE DECISION OF THE HONBLE JURISDICTION AL BOMBAY HIGH COURT WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A ) AND ALSO ITA NOS.2992 & 2993/M/2018 M/S. HINDUJA VENTURES LTD. 3 BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNA L IN THE CASE OF ACIT VS. VIREET INVESTMENTS PVT. LTD. (2017) 82 T AXMAN.COM 415 (DEL. TRIB. SB) WHEREIN IT HAS BEEN HELD THAT COMPUTATION UNDER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB SUB SECTION (2) HAS TO BE MADE WITHOUT RESORTING TO COMPUTATION AS CONTEMPLATED UNDER SECTION 14A READ WITH RULE 8D. ACCORDINGLY, WE DISMISS BOTH THE APPEALS OF THE REVENUE BY UPHOL DING THE ORDER OF THE LD. CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.05.2019. SD/- SD/- (SANDEEP GOSAIN) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 13.05.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.