Avonmore Capital & Management services Ltd, New Delhi V. DCIT Circle-3(2), New Delhi

ITA 4820/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5913 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RANU JA IN
• Section: 14A; 115JB; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC B ENCH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 4820/DEL/2019 [ASSESSMENT YEAR: 2014-15] AVONMORE CAPITAL & MANAGEMENT VS. THE DY. C.I.T SERVICES LTD. CIRCLE - 3(2) 3, SCINDIA HOUSE, 2 ND FLOOR, NEW DELHI CONNAUGHT PLACE, JANPATH, NEW DELHI PAN: AABCA 0478 N [APPELLANT] [RESPONDENT] DATE OF HEARING : 15.09.2021 DATE OF PRONOUNCEMENT : 15.09.2021 ASSESSEE BY : MS. RANU JAIN, ADVOCA TE REVENUE BY : SHRI R.K. GUPTA, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] I, NEW DELHI DATED 29.03.2019 PERTAINING TO ASSESSMENT YEAR 2014-15. 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE MADE U/S 14A OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'] FO R COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT BY WAY OF AN ORDER DATED 14.09.2017, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 154 OF THE ACT. REASONS, WHICH PROMPTED THE ASSESSING OFFICER TO RECTIFY THE MISTAKE APPARENT FROM RECORD IS THAT IN ITS COMPUTATION OF INCOME, THE ASSESSEE HAD ADDED A SUM OF RS. 22,4 8,459/ U/S 14A UNDER NORMAL PROVISIONS OF THE ACT. SINCE THE SAME WAS NOT OFFERED FOR CALCULATION OF BOOK PROFIT UNDER MAT PROVISION, THE ASSESSING OFFICER WAS OF THE OPINION THAT THIS MISTAKE RESULTED IN UN DER ASSESSMENT OF BOOK PROFIT UNDER MAT PROVISION AND, ACCORDINGLY, M ADE ADDITION OF RS. 22,48,459/ FOR COMPUTING BOOK PROFIT UNDER MAT PRO VISION. 4. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT(A) AND STRONGLY CONTENDED THAT ANY DISALLOWANCE MADE U/S 1 4A OF THE ACT IS NOT TO BE CONSIDERED FOR COMPUTATION OF BOOK PROFIT AND MAT PROVISION. 3 5. THE CLAIM OF THE ASSESSEE DID NOT FIND ANY FAVOU R WITH THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE ASSESSING OF FICER. 6. BEFORE ME, THE LD. COUNSEL FOR THE ASSESSEE PLAC ED STRONG RELIANCE ON THE DECISION OF THE SPECIAL BENCH OF TH E TRIBUNAL IN THE CASE OF VIREET INVESTMENT 82 TAXMANN.COM 415. 7. PER CONTRA, THE LD. DR STRONGLY RELIED UPON THE FINDINGS OF THE LOWER AUTHORITIES AND STATED THAT THE FACTS OF THE CASE ARE DISTINGUISHABLE. 8. I HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE ORD ERS BELOW. I FIND THAT SUO MOTO DISALLOWANCE MADE BY THE ASSESSEE IN ITS COMPUTATION OF INCOME WAS NOT CONSIDERED BY IT WHILE COMPUTING BOO K PROFIT UNDER MAT PROVISION. I FIND THAT THE ASSESSING OFFICER HA S INVOKED THE PROVISIONS OF SECTION 154 OF THE ACT CLAIMING THAT NOT CONSIDERING THE DISALLOWANCE MADE U/S 14A OF THE ACT HAS RESULTED I NTO A MISTAKE APPARENT FROM RECORD WHICH IS RECTIFIABLE. 4 9. AT THE VERY OUTSET, I DO NOT AGREE WITH THIS ACT ION OF THE ASSESSING OFFICER, AS IN MY CONSIDERED OPINION, A D EBATABLE ISSUE CANNOT BE A RECTIFIABLE MISTAKE APPARENT FROM RECOR D. BE THAT AS IT MAY, THIS ISSUE HAS NOW BEEN SETTLED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF VIREET INVESTMENT [SUPRA] W HEREIN IT HAS BEEN HELD THAT COMPUTATION UNDER CLAUSE (F) OF EXPLANATI ON 1 TO SECTION 115JB(2) OF THE ACT IS TO BE MADE WITHOUT RESORTING TO COMPUTATION AS CONTEMPLATED UNDER SECTION 14A R.W.R 8D OF THE ACT. ON BOTH COUNTS, THE ASSESSEE SUCCEEDS. THE ASSESSING OFFICER IS DIR ECTED TO DELETE THE DISALLOWANCE MADE U/S 14A OF THE ACT FROM COMPUTATI ON OF BOOK PROFIT UNDER MAT PROVISION. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO. 4820/DEL/2019 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15.09. 2021 IN THE PRESENCE OF BOTH THE REPRESENTATIVES. /- SD/- [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 15 TH SEPTEMBER, 2021 VL/ 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI DATE OF DICTATION 15.09.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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