ACIT, New Delhi V. M/s. Sheela Foam Pvt. Ltd., New Delhi

ITA 3210/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5136 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Assessee Lawyers: GAURAV JAIN MS MANISHA SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: B, NEW DELHI) BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. N. K. BILLAIYA, ACCOUNTANT MEMBER ITA NO:-3210, 3211 & 3212/DEL/2016 ( ASSESSMENT YEAR: 2009-10, 2010-11 & 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -6, ROOM NO.-364, ARA CENTRE, E-2, JHANDEWALAN EXTN, NEW DELHI VS. SHEELA FOAM PVT. LTD. 37/2, SITE-4 SAHIBABAD INDUSTRIAL AREA, NEW DELHI PAN AAACS0189B APPELLANT RESPONDENT APPELLANT BY : MS. NIDHI SRIVASTAVA, CIT DR RESPONDENT BY : SH. GAURAV JAIN, ADVOCATE MS. MANISHA SHARMA, ADVOCATE DATE OF HEARING : 22.05.2019 DATE OF PRONOUNCEMENT : 23.05.2019 ORDER PER: N. K. BILLAIYA, AM ITA NO.3210/DEL/2016, 3211/DEL/2016 AND 3212/DEL/20 16 ARE THREE SEPARATE APPEALS BY THE REVENUE PREFERRED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS]-23, NEW DELHI, DATED 04.03.2016 FOR ASSESSMENT YEAR 2009-10, 2010-11 AND 2011-12. 2 2. SINCE COMMON GRIEVANCE ARE INVOLVED IN ALL THESE APPEALS AND SINCE THE CIT(A) HAS DISPOSED ALL THE APPEALS BY A COMMON ORDER, THEREFORE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. FOR THE SAKE OF CONVENIENCE WE ARE TAKING THE GR OUNDS OF ITA NO.3210/DEL/2016 WHICH ARE AS UNDER :- 1. 4. AT THE VERY OUTSET, THE COUNSEL FOR THE ASSESSEE STATED THAT ALL THE ISSUES RAISED BY THE REVENUE HAVE BEEN DECIDED BY T HE TRIBUNAL IN ASSESSEES OWN CASE IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE IN A. Y. 2006-07 TO 2008-09. 3 5. THE DR FAIRLY CONCEDED TO THIS BUT POINTED OUT T HAT THE GRIEVANCE RAISED VIDE GROUND NO.2 IS NOW SETTLED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE HIGH CO URT OF DELHI. 6. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE A UTHORITIES BELOW AND HAVE CAREFULLY PERUSED THE ORDER OF THE TRIBUNAL FO R A. Y. 2006-07 IN ITA NO.3832/DEL/2009, 3294/DEL/2010 AND 950/DEL/2012 DA TED 25.05.2018. 7. ISSUE RAISED VIDE GROUND NO.1 WAS CONSIDERED BY THE COORDINATE BENCH QUA GROUND NO.2 IN ITA NO.950/DEL/2012 AS UND ER :- 27. GROUND NO.2 RELATES TO DISALLOWANCE U/S. 14 A O F THE ACT R.W.R. 8D OF THE RULES AMOUNTING TO RS.55,870/-. 28. WE FIND THAT THE ASSESSEE HAS NOT EARNED ANY E XEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. THUS T HIS GRIEVANCE OF THE ASSESSEE HAS TO BE ALLOWED FOLLOWING THE JUDGMENT O F THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF CHEMINVEST LTD. VS. CIT 121 ITD 318 WHICH HAS BEEN AFFIRMED BY THE HONBLE HIGH COURT OF DELH I 378 ITR 33 [DEL]. SIMILAR VIEW WAS TAKEN IN 399 ITR 483 AND BY THE HO NBLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY PVT. LTD. 372 I TR 97. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.55,870/-. GROUND NO. 2 IS ALLOWED. 4 8. AS NO DISTINGUISHING FACT HAS COME TO OUR NOTICE RESPECTFULLY FOLLOWING THE FINDINGS OF THE COORDINATE BENCH, THE GROUND NO .1 IS DISMISSED. 9. ISSUES RAISED VIDE GROUND NO.3 WERE CONSIDERED B Y THE TRIBUNAL IN ITA NO.3832/DEL/2009 QUA GROUND NO.3 OF ITS APPEAL. THOUGH THE COORDINATE BENCH HAS DECIDED THIS ISSUE IN FAVOUR O F THE ASSESSEE BUT NOW WITH THE DECISION OF HONBLE HIGH COURT DELHI IN TH E CASE OF BHARAT HOTELS LIMITED 410 ITR 417 THE SAME HAS TO BE DECIDED AGAI NST THE ASSESSEE AND IN FAVOUR OF THE REVENUE SINCE THE HONBLE HIGH COU RT HAS HELD THAT EMPLOYEES CONTRIBUTION PROVIDENT FUND AND ESI CONTR IBUTION HAS TO BE DEPOSITED WITHIN THE GRACE PERIOD AND SINCE IN THE PRESENT CASE THE DEPOSIT HAVE BEEN MADE AFTER THE GRACE PERIOD THE SAME CANN OT BE ALLOWED. GROUND NO.3 IS ACCORDINGLY ALLOWED. 10. GROUND NO. 4 AND 5 IS RELATES TO THE CLAIM OF D EDUCTION U/S.10 A AND 80 IB OF THE ACT. WE FIND AN IDENTICAL ISSUE WAS CO NSIDERED BY THE COORDINATE BENCH IN ITA NO.3832/DEL/2009, VIDE GROU ND NO.2 OF THAT APPEAL AND THE RELEVANT FINDINGS READ AS UNDER :- 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE G IVEN THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELO W AND WITH THE ASSISTANCE OF THE ID. COUNSEL FOR THE ASSESSEE, WE HAVE CONSIDERED THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN THE FORM OF PAPER 5 BOOK IN THE LIGHT OF RULE 18(6) OF THE ITAT RULES, 1962. EXHIBIT 36, 44,53 AND 62 EXHIBIT FINANCIAL STATEMENTS OF FOUR ELIGIBL E UNITS. IT CAN BE SEEN THAT IN ALL THESE ELIGIBLE UNITS, THE HEAD OFFICE A CCOUNT WAS SHOWING DEBIT BALANCE WHICH WAS CONVERTED INTO CREDIT BALANCE ONL Y WHEN PROFIT FOR THE YEAR WAS TRANSFERRED. THEREFORE, IT CANNOT BE SAID THAT THE ELIGIBLE UNITS HAD BORROWED FUNDS FROM THE HEAD OFFICE. FURTHER, WE FIND THAT THE DEBTORS OF THE ELIGIBLE U NITS WERE REALIZED BY THE HEAD OFFICE AND ACCORDINGLY, NECESSARY ENTRIES WERE PASSED THROUGH HEAD OFFICE ACCOUNT. CONSIDERING THE FACTUAL MATRIX EXHI BITED IN THE STATEMENT OF ACCOUNT, IT CAN BE STATED THAT THE ELIGIBLE UNIT S HAVE NOT BORNE ANY FINANCIAL CHARGES AND THEREFORE, NO ALLOCATION OF F INANCIAL CHARGES IS TO BE MADE BETWEEN THESE ELIGIBLE UNITS. WE DO NOT FIND A NY ERROR OR INFIRMITY IN THE FINDING OF THE ID. CIT(A). GROUND NO.2 IS ACCOR DINGLY DISMISSED. 11. THE DR STATED THAT THE ISSUE MAY BE RESTORED TO THE FILES OF THE ASSESSING OFFICER FOR VERIFICATION OF THE ACCOUNTS. 12. WE FIND THAT THE CIT(A) WHILE ADJUDICATING THIS ISSUE HAS CONSIDERED AND EXAMINED THE UNDERLING FACTS IN ISSUE, WE, THER EFORE, DO NOT FIND IT NECESSARY TO REMIT THE MATTER TO THE ASSESSING OFFI CER FOR VERIFICATION ONCE AGAIN. THE GROUND NO. 4 AND 5 ARE ACCORDINGLY DISM ISSED. 6 13. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.05.2019. SD/- SD/- (BHAVNESH SAINI) (N.K.BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23.05.2019 NEHA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 22.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 22.05.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 22.05.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 22.05.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 22.05.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 3 . 0 5 . 2 0 1 9 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 3 . 0 5 . 2 0 1 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER