ACIT, Gurgaon V. M/s Bajaj Motors Ltd, Gurgaon

ITA 3459/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6908 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Capital asset; Earning of tax free income; Additional evidence; Tax effect
• Section: 143(3); 14A

Judgement Text

ITA NO.3459/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. NO. 3459 /DEL/2013 A.Y. 2006 - 07 ACIT, CIRCLE - 1( 1), GURGAON VS. M/S BAJAJ MOTORS LTD., 39-40 KM STONE DELHI JAIPUR HIGHWAY, VILLAGE-NARSHINGHPUR GURGAON (PAN: AAACB7413P) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. K.K. JAISWAL, DR ASSESSEE BY : SH. ASHWANI KUMAR, CA DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 28 2828 28- -- -01 0101 01- -- -201 201 201 2016 66 6 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 0 00 05 55 5- -- -0 00 02 22 2- -- -201 201 201 2016 66 6 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M THE REVENUE HAS FILED THIS APPEAL AGAINST THE ORD ER DATED 19.3.2013 PASSED BY THE LD. CIT(A), FARIDABAD RELEVANT TO ASS ESSMENT YEAR 2006-07. 2. AFTER GOING THROUGH THE GROUNDS OF APPEAL, WE FI ND THAT THE GROUNDS OF APPEAL RAISED BY THE DEPARTMENT HAVE NOT BEEN SIGN ED BY THE ACIT, CIRCLE-1, GURGAON, AS REQUIRED UNDER SECTION 253(2) OF THE I. T. ACT, 1961. FOR THE SAKE OF CONVENIENCE, THE GROUNDS OF APPEAL RAISED BY THE RE VENUE IN THE PRESENT APPEAL ARE REPRODUCED AS UNDER:- ITA NO.3459/DEL/2013 2 'ANNEXURE 'A' BRIEF FACTS OF THE CASE :- ASSESSEE FILED ITS RETURN OF INCOME ON 28.11.2006 D ECLARING INCOME OF RS. 20,14,30,019/-. ASSESSMENT PROCEEDINGS U/S 143(3) O F THE ACT WERE COMPLETED VIDE ORDER DATED 02.12.2008 AT AN INCOME OF RS: 20, 17,25,295/-. SUBSEQUENTLY, RE-ASSESSMENT WAS COMPLETED U/S 147/1 43(3) OF THE ACT ON 30.12.2011 AT INCOME OF RS. 21,96,84,834/- AFTER MA KING ADDITIONS ON THE FOLLOWING GROUNDS:- I) ADDITION OF RS. 30,99,539/- U/S 36(1)(III) WAS MADE , BEING INTEREST PAID ON LOAN TAKEN FOR RAISING CAPITAL ASSETS WHIC H WERE NOT PUT TO USE DURING THE RELEVANT YEAR. II) ADDITION OF RS. 1,48,60,000/- WAS MADE U/S 14A OF T HE INCOME TAX ACT, 1961. I) ADDITION OF RS. 30,99,539/- ULS 36(1)(III) WAS MADE , BEING INTEREST PAID ON LOAN TAKEN FOR RAISING CAPITAL ASSETS WHICH WERE NOT PUT TO USE DURING THE RELEVANT YEAR. THE A.O. MADE AN DISALLOWANCE OF RS. 30,99,539/- ON ACCOUNT OF INTEREST PAID ON LOANS TAKEN FOR ACQUIRING CAPITAL ASSETS NOT PUT TO USE FOR BUSINESS DURING THE YEAR BY INVOKING THE PROVIS IONS OF SECTION 36(1)(III) OF THE ACT. THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 27,5 6,008/- OUT OF THE ADDITION OF RS. 33,99,539/- MADE BY THE A.O. TAKING INTO ACCOUNT THE DATES ON WHICH VARIOUS ITEMS UNDER THE HEAD CAPITAL WORKS IN PROGRESS WERE ACQUIRED ALONG WITH THEIR AMOUNTS. II) ADDITION OF RS. 1.48,60,000/- WAS MADE ULS 14A OF THE INCOME TAX ACT, 1961:- ITA NO.3459/DEL/2013 3 THE A.O. MADE AN DISALLOWANCE OF RS. 1,48,60,000/- U/S 14A OF THE ACT. THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 1,45 ,74,953/- OUT OF THE ADDITION OF RS. 1,48,60,000/- MADE BY THE A.O. BY O BSERVING THAT THE ASSESSEE MADE INVESTMENT OF RS. 14.86 CRORES IN TAX FREE MUTUAL FUNDS BUT GOT THEM REDEEMED AFTER A SHORT PERIOD OF TIME & RE INVESTED THE REDEEMED AMOUNT IN MUTUAL FUNDS WITH A VIEW TO EARN SHORT-TE RM PROFIT. THE AMOUNT OF INTEREST DISALLOWABLE WAS WORKED OUT ON THE BASI S OF NO. OF DAYS FOR WHICH A CERTAIN AMOUNT WAS INVESTED TAKING 7% RATE OF INTEREST. THE ORDER OF THE LD CIT(A) HAS NOT BEEN FOUND ACCEP TABLE ON THE ABOVE ISSUES, HENCE FURTHER APPEAL TO THE ITAT IS RECOMME NDED IN THIS CASE ON THE BELOW MENTIONED GROUNDS:- ( IN THE CASE OF MIS MIS BAJAJ MOTORS LTD., VILLAGE -NARSINGHPUR, GURGA~N FOR THE ASSESSMENT YEAR 2006-07) 7. DECISION BY THE CIT ON THE SCRUTINY REPORT A. ISSUE WISE DECISION OF THE CIT, AS TO WHETHER AP PEAL IS TO BE FILED OR NOT, MAY BE RECORDED, WITH REASONS, KEEPING IN VIEW THE LINE OF ARGUMENT THE DR IS EXPECTED TO TAKE BEFORE ITAT AT THE TIME OF HEARING: ISSUE NO 1. :- AS PER ANNEXURE- 'A' ISSUE NO.2 :- NOT APPLICABLE. AGGREGATE TAX EFFECT ON ISSUES PROPOSED TO BE CONTESTED IN THE ITAT RS.54 35 855/- B. GROUNDS OF APPEAL TO BE RAISED BEFORE THE ITAT M AY BE FRAMED IN RESPECT OF THE ISSUES NOT ACCEPTED BY THE CIT. ITA NO.3459/DEL/2013 4 1. WHETHER THE LD. CIT(A) WAS RIGHT IN LAW IN ACCEP TING ADDITIONAL EVIDENCE WITHOUT CALLING REMAND REPORT FROM THE A.O . REGARDING DATES OF PURCHASE OF THE CAPITAL ASSETS UNDER CONSIDERATION DESPITE THE FACT THAT THE ASSESSEE WAS NOT PREVENTED BY ANY OF THE CLAUSES ME NTIONED IN RULE 46A OF THE IT RULES. 2. WHETHER THE LD. CIT(A} WAS RIGHT IN LAW IN RESTR ICTING THE DISALLOWANCE TO RS. 3,43,531/- INSTEAD OF RS. 30,99,539/- MADE B Y THE A.O. U/S 36(1}(III} OF THE ACT ON ACCOUNT OF INTEREST PAID O N LOAN TAKEN FOR PURCHASE OF CAPITAL ASSETS WHICH WERE NOT PUT TO USE DURING THE PERIOD UNDER CONSIDERATION. 3. WHETHER THE LD. CIT(A} WAS JUSTIFIED IN RESTRICT ING THE DISALLOWANCE TO RS. 2,85,047/- AGAINST THE DISALLOWANCE OF RS. 1,48 ,60,000/- MADE BY THE A.O. U/S 14A OF THE IT ACT ON INVESTMENT OF RS. 14.86 CRORES MADE BY THE ASSESSEE IN ASSETS DERIVING EXEMPT INCOME. 4. 'THE APPELLANT CRAVES FOR THE PERMISSION TO ADD , DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEA RING OF APPEAL. ' C. IN CASE OF A COMBINED ORDER OR ORDER IN A GROUP CASE, INVOLVING MORE THAN ONE ASSESSEE FALLING UNDER JURISDICTION OF DIFFERENT CSIT, THE CIT SHALL COMMU NICATE THE STAND TAKEN ON COMMON ISSUES TO THE CIT HAVING JURISDICTI ON OVER OTHER CASE(S). A. CATEGORIZATION OF FINAL DECISION BY CIT :- B(I } A. THE APPEAL IS NOT TO BE FILED I. AS THE ORDER IS ACCEPTABLE ON MERITS, OR II. EVEN THOUGH THE ORDER IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LE SS THAN THE LIMIT PRESCRIBED IN CBDT'S INSTRUCTION ON MONETARYLIRNITS . ITA NO.3459/DEL/2013 5 B. APPEAL IS TO BE FILED ON THE 'GROUNDS OF APPEAL ' FRAMED ABOVE I. AS THE ORDER IS NOT ACCEPTABLE ON MERITS, OR II. THOUGH TAX EFFECT IS BELOW THE PRESCRIBED LIMIT , THE CASE FALLS UNDER THE EXCEPTIONS (TO BE SPECIFIED) OF THE INSTR UCTION OF CBDT ON MONETARY LIMITS. III. AUTHORISATION UNDER SECTION 253(2) OF THE LT. ACT IS ISSUED SEPARATELY. APPEAL TO BE FILED ACCORDINGLY. DATED :29.05.2013 SD/- ( NEENA KUMAR) COMMISSIONER OF INCOME TAX, FARIDABAD 3. NO DOUBT THAT THE LD. CIT, FARIDABAD VIDE HIS O RDER 29.5.2013 PASSED U/S. 253(2) OF THE I.T. ACT HAS DIRECTED THE ACIT, CIRCLE-I, GURGAONN TO FILE THE APPEAL BEFORE THE ITAT, DELHI AGAINST THE ORDER DAT ED 19.3.2013 PASSED BY THE LD. CIT(A)-FARIDABAD ON THE GROUNDS MENTIONED ABOV E, BUT THE ACIT, CIRCLE-I, GURGAON HAS NOT APPLIED HIS MIND WHILE FILING THE PRESENT APPEAL BEFORE THE TRIBUNAL AND HE FILED THE GROUNDS OF APPEAL WITHOU T HIS SIGNATURES AND BY ENCLOSING THE ANNEXURE-A CONTAINING THE FACTS AND GROUNDS SIGNED BY CIT, FARIDABAD WHICH IS CONTRARY TO THE PROVISIONS OF SE CTION 253(2) OF THE I.T. ACT. THEREFORE, THE PRESENT APPEAL IS DEFECTIVE AND IS N OT MAINTAINABLE IN THE EYES OF LAW. ITA NO.3459/DEL/2013 6 4. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE DISMISS THE PRESENT APPEAL FILED BY THE REVENUE, BEING DEFECTIVE. BUT IN THE INTEREST OF JUSTICE, WE ARE GIVING THE LIBERTY TO THE REVENUE TO FILE THE A PPLICATION FOR RECALL OF THIS ORDER, AS PER RULES, AFTER RECTIFY THE DEFECT. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/02/2016. SD/- SD/- [ [[ [J.S. REDDY J.S. REDDY J.S. REDDY J.S. REDDY] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 05/02/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES