The Jt.CIT.,(OSD)Circle-5, Ahmedabad V. Nirma Limited, Ahmedabad

ITA 3035/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89404 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-05-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 02-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M C SHAH
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD BEFORE S/SHRI N. S. SAINI, A.M. AND S. S. GODARA, J.M. ITA NO.3035/AHD/2011 ALONG WITH CO NO.30/AHD/2012 ASSTT. YEAR: 2001-02 JT. COMMISSIONER OF INCOME-TAX (OSD), CIRCLE-5, AHMEDABAD. VS NIRMA LTD., NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD-380015 (APPELLANT) (RESPONDENT) PA NO.AAACN 5350K REVENUE BY SHRI MADHU SUDAN, SR.DR ASSESSEE BY SHRI M. C. SHAH DATE OF HEARING: 5.5.2015 DATE OF PRONOUNCEMENT: 13/5/2015 O R D E R PER SHRI N. S. SAINI, ACCOUNTANT MEMBER. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS AS UNDER :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF EXPENDI TURE TOWARDS DISCOUNT/INTEREST ON DDBS AMOUNTING TO RS.31,66,89, 285/- AS AGAINST RS.28,96,45,191 ALLOWED BY THE ASSESSING OF FICER. ITA NO.3035/AHD/2011 & CO 30/AHD/2012 ASST. YEAR 2001-02 2 2. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . THE CIT(A) HAS HELD AS UNDER :- 3.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. I HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER AND SUBMISSION OF THE LD. A.R. OF THE APPELLANT. THE IMPUGNED ORDER IS PASSED U/143(3) R.W.S. 254 OF I.T . ACT. THIS ORDER HAS BEEN PASSED SPECIALLY FOR GIVING EFFECT TO THE ORDER OF HONBLE ITAT PASSED IN ITA NO.3687/AHD/2008 DT.13.7.2009. HONBLE ITAT HAS UNA MBIGUOUSLY DIRECTED THAT APPELLANT IS ENTITLED TO PROPORTIONATELY CLAIM EXPE NDITURE TOWARDS DISCOUNT/INTEREST ON DDBS ON ACCRUAL BASIS IN THE Y EAR UNDER APPEAL. HOBBLE ITAT FURTHER DIRECTED THE AO TO CORRECTLY WORK OUT THE AMOUNT OF DEDUCTION TO THE EXTENT IT RELATES TO THE YEAR UNDER APPEAL. IN MY C ONSIDERED VIEW AO WAS LEFT WITH NO SCOPE OF DENYING PROPORTIONATE CLAIM OF EXPENDIT URE TOWARDS DISCOUNT/INTEREST ON THE DDBS ON ACCRUAL BASIS AFTER A CLEAR CUT DIRE CTION GIVEN BY HONBLE ITAT. IT IS CLEARLY HELD BY HONBLE SUPREME COURT IN THE CAS E OF BHOPAL SUGAR INDUSTRIES LTD. VS. ITO (1961) REPORTED AT 40 ITR 618 THAT AN ORDER PASSED BY AO AND VIRTUALLY REFUSING TO CARRY OUT THE DIRECTION WHICH A SUPERIOR TRIBUNAL HAS GIVEN TO HIM IN EXERCISE OF THE APPELLATE POWERS IN RESPECT OF AN ORDER OF ASSESSMENT MADE BY HIM SUCH REFUSAL IS AN EFFECT OF DENIAL OF JUSTICE AND IT IS FURTHER MORE DESTRUCTIVE OF ONE OF THE BASIC PRINCIPLES IN THE A DMINISTRATION OF JUSTICE BASED AS IN OUR COUNTRY ON HIERARCHY OF COURTS. IT IS HELD I N THE CASE OF ARCH DIOCESE OF VARAPOLY VS. AG. ITO (1998) 233 ITR 228 (KER) THAT IT CAN BE DEFINITELY SAID THAT THERE IS MANIFEST INJUSTICE IN REFUSING TO COMPLY W ITH THE DIRECTIONS OF THE TRIBUNAL CONTAINED IN ITS APPELLATE ORDER BY THE AO. IN VIEW OF THE ABOVE SAID FACTUAL POSITION, IT IS VERY CLEAR THAT THE AO HAS TO ALLOW PROPORTIONATE CLAIM OF THE EXPENDITURE TOWARDS DISCOUNT/INTEREST ON DDBS ON AC CRUAL BASIS FOR THE YEAR WORKS OUT TO RS.31,66,89,286/-. I FIND NO REASON WH Y THE SAME SHOULD NOT BE ALLOWED. IN VIEW OF IT, THE AO IS DIRECTED TO ALLOW EXPENDITURE TOWARDS DISCOUNT/INTEREST ON DDBS OF RS.31,66,89,286/-. THI S GROUND OF APPEAL IS ALLOWED. 3. BEFORE US, THE DR RELIED UPON THE ORDER OF ASSES SING OFFICER. THE LD. DR COULD NOT POINT OUT HOW THE ORDER PASSED BY THE AO WAS IN UNCONFORMITY AND IN ACCORDANCE WITH THE DIRECTIO NS GIVEN BY THE TRIBUNAL. NO ERROR IN THE FINDING OF CIT(A) COULD B E POINTED OUT BY THE ITA NO.3035/AHD/2011 & CO 30/AHD/2012 ASST. YEAR 2001-02 3 REVENUE. IN ABSENCE THEREOF WE DO NOT FIND ANY MERI T IN THIS GROUND OF APPEAL OF REVENUE AND ACCORDINGLY THE SAME IS DI SMISSED. 4. IN THE CROSS OBJECTION THE GROUND NO.2 RAISED IS THAT THE CIT(A) ERRED IN DISMISSING THE GROUND OF PRIOR PERIOD EXPE NSES OF RS.69,00,893/- AS HELD ALLOWABLE IN THE ORDER DATED 06.01.05. THE CIT(A) HELD THAT THIS GROUND IS EMANATING FROM THE ORDER GIVING EFFECT TO CIT(A)S ORDER DATED 6.1.05 AND CANNOT BE ADJUD ICATED IN THIS APPEAL. 5. GROUND NO.3 OF THE CROSS OBJECTION IS DIRECTED A GAINST THE ORDER OF CIT(A) IN DISMISSING THE GROUND OF ALLOWIN G DEDUCTION U/S 80HHC FOR RS.106.76 LACS. THE CIT(A) HELD THAT THIS GROUND IS EMANATING FROM THE ORDER GIVING EFFECT TO CIT(A)S ORDER DT.6.1.05 AND CANNOT BE ADJUDICATED IN THIS APPEAL. 6. GROUND NO.4 IS DIRECTED AGAINST THE ORDER DISMIS SING THE GROUND OF DEDUCTION OF REFUND OF RS.1,30,352/- AS P ER THE ORDER GIVING EFFECT TO CIT(A) ORDER DT.6.1.05. THE CIT(A) HELD T HAT THIS GROUND IS EMANATING FROM THE ORDER GIVING EFFECT TO CIT(A)S ORDER DT.6.1.05 AND CANNOT BE ADJUDICATED IN THIS APPEAL. ITA NO.3035/AHD/2011 & CO 30/AHD/2012 ASST. YEAR 2001-02 4 7. THE LD. AR OF THE ASSESSEE MADE NO SUBMISSION ON THE ABOVE GROUNDS OF CROSS OBJECTION. THEREFORE, THEY ARE DIS MISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE AND THE CRO SS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/5/2015 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (N. S. SAINI) ACCOUNTANT MEMBER MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD ITA NO.3035/AHD/2011 & CO 30/AHD/2012 ASST. YEAR 2001-02 5 1. DATE OF DICTATION: 10/5/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 13/5/202011 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: