ACIT, New Delhi V. M/s The National Small Industries Corporation Ltd., New Delhi

ITA 4961/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86844 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 28-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B R R KUMAR
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K , JUDICIAL MEMBER ITA NO . 4961 /DEL/ 2013 ASSESSMENT YEAR : 2009 - 10 ACIT, CIRCLE 16(1), NEW DELHI. VS. THE NATIONAL SMAL L INDUSTRIES CORPORATION LTD., NSIC BHAWAN, OKHLA INDL. AREA, NEW DELHI. AAACT0686N (APPELLANT) (RESPONDENT) APPELLANT BY: SH. M.P. RASTOGI, ADV. RESPONDENT BY: SH. B.R.R. KUMAR, SR. DR O R D E R PER S.V. ME HROTRA, A.M. TH IS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) , NEW DELHI DATED 15/05 /2013 FOR A.Y. 2009 - 10 . 2. THE ASSESSEE COMPANY IN THE RELEVANT ASSESSMENT YEAR WAS ENGAGED IN THE BUSINESS OF HIRE PURCHASE, LEASING, CTL, MARKETING, ASSIST ANCE. IT HAD FILED ITS RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSMENT WAS COMPLETED AT A TO TAL INCOME OF RS. 6,87,36,987/ - WHICH WAS ADJUSTED AGAINST THE BROUGHT FORWARD LOSS TO THIS EXTENT, INTER ALIA, MAKING A DISALLOWANCE U/S 14A OF RS. 3,82,48 9/ - AND EXCHANGE FLUCTUATION LOSS OF RS. 55,34,623/ - . 3. LD. CIT(A) PARTLY ALLOWED THE ASSESSEE S APPEAL. ITA NO. 4961 /D/ 2013 2 4. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(A) THE DEPARTMENT IS IN APPEAL BEFORE US AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 3,41,164/ - AGAINST ADDITION MADE BY THE AO U/S 14A OF THE I.T. ACT; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELE TING THE ADDITION OF RS. 55,34,623/ - MADE BY THE AO BY DISALLOWING FOREIGN EXCHANGE FLUCTUATION LOSS; 3. THE APPELLANT CRAVES FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF APPE AL. 5. APROPOS GROUND NO. 1 , LD. COUNSEL POINTED OUT THAT A SIMILAR DISALLOWANCE IN A.Y. 2008 - 09 WAS MADE AND THE SAME HAS BEEN PARTLY DELETED. THE DEPARTMENT HAS NOT PREFERRED ANY APPEAL AGAINST THE CIT(APPEALS) ORDER FOR A.Y. 2008 - 09. HE FURTHER POINT ED OUT THAT LD. CIT(A) HAS ONLY FOLLOWED THE FINDINGS FOR A.Y. 2008 - 09 WHICH HAVE BEEN REPRODUCED IN PARA 2.2 OF HIS ORDER. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES, WE FIND THAT IN PARA 2.3 LD. CIT(A) HAS OBSERVED AS UNDER: 2.3 THE SUB MISSIONS OF THE APPELLANT AND THE FACTS HAVE BEEN CAREFULLY CONSIDERED. IN THE ASSESSMENT ORDER, THE AO MADE A DISALLOWANCE OF RS. 3,41,164/ - UNDER RULE 8D(2)(II) AND A DISALLOWANCE OF RS. 41,325/ - UNDER RULE 8D(2)(III). A SIMILAR DISALLOWANCE MADE IN A. Y. 2008 - 09 UNDER RULE 8D(2)(II) HAS BEEN DELETED, AND A DISALLOWANCE UNDER RULE 8D(2)(III) HAS BEEN UPHELD, BY THE CIT(A) - 12, VIDE HER ORDER DATED 7.1.13. THE APPELLANT HAS POINTED OUT THAT THEY HAD SUFFICIENT FUNDS OF THEIR OWN TO FINANCE THE ITA NO. 4961 /D/ 2013 3 INVESTMENTS AND HAS FILED THE REQUIRED DETAILS. DISALLOWANCE UNDER RULE 8D(2)(II) IS THEREFORE, NOT SUSTAINABLE IN LAW. HOWEVER, THE DISALLOWANCE UNDER RULE 8D(2)(III) IS ENTIRELY, JUSTIFIED. CONSIDERING THE FACTS AND FOLLOWING THE DECISION OF THE CIT(A) IN THE PR ECEDING YEAR, THE DISALLOWANCE UNDER RULE 8D(2)(II) IS DELETED, AND THE DISALLOWANCE UNDER RULE 8D(2)(III) IS UPHELD. THE GROUNDS ARE PARTLY ALLOWED. 7. THE DEPARTMENT HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO CONTROVERT THE FINDINGS OF LD. CIT(A) THAT T HE ASSESSEE HAD SUFFICIENT FUNDS OF THEIR OWN TO FINANCE THE INVESTMENTS. WE, THER E FORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF LD. CIT(A). 8. APROPOS GROUND NO. 2 , LD. COUNSEL POINTED OUT THAT THE ADDITION WAS MADE BY THE AO ON ACCOUN T OF FOREIGN EXCHANGE FLUCTUATION LOSS IN A.Y. 2008 - 09 WHICH HAS BEEN DELETED BY THE TRIBUNAL IN ASSESSEE S OWN CASE, VIDE ITA NO. 2455/DEL/2013 DATED 31/10/2013 , WHEREIN THE TRIBUNAL , FOLLOWING THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. WOODWARD GOVERNOR INDIA P. LTD. (2007) 294 ITR 451 , DISMISSED THE REVENUE S APPEAL. WE FIND THAT LD. CIT(A) IN PARA 3.3 HAS OBSERVED AS UNDER: 3.3 THE SUBMISSIONS OF THE APPELLANT AND THE FACTS HAVE BEEN CAREFULLY CONSIDERED. THE APPELLANT H AS POINTED OUT THAT ON SIMILAR FACTS, THE ADDITION MADE IN A.Y. 2008 - 09 HAS BEEN DELETED BY THE CIT(A) - 12 VIDE HER ORDER DATED 7.1.13. THE APPELLANT HAS PLACED RELIANCE ON SEVERAL JUDICIAL DECISIONS INCLUDING THE DECISION OF THE HON BLE SUPREME COURT IN T HE CASE OF ONGC VS. CIT [322 ITR 180]. CONSIDERING THE FACTS, AND FOLLOWING THE ORDER OF THE CIT(A) IN THE PRECEDING YEAR, THE ADDITION IS NOT JUSTIFIED AND IS DELETED. THE GROUND IS ALLOWED. ITA NO. 4961 /D/ 2013 4 9. IN VIEW OF THE DECISION OF TRIBUNAL IN ASSESSEE S OWN CAS E (SUPRA), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 10. IN THE RESULT , THE REVENUE S APPEAL IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 23/02/2015 SD/ - SD/ - ( GEORGE GEORGE K ) JUDICIAL MEMBER ( S.V. ME HROTRA ) ACCOUNTANT MEMBER DATED: *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR