DCIT 10(3), MUMBAI V. NEPTUNE FINCOT P.LTD, MUMBAI

ITA 6410/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9208 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 31-10-2013
• Court: TRIBUNAL
• Department Lawyers: AND CROSS OBJECTION
• Assessee Lawyers: ARE DIRECTED A GAINST
• Keywords: Reassessment proceedings
• Section: 143(3); 115JB; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER ITA NO. 6410/MUM/2013 ASSESSMENT YEAR: - 2007 - 08 DY. COMMISSIONER OF INCOME TAX 10(3), MUMBAI ROOM NO. 451, 4 TH FLOOR, AAYKAR BHAVAN, MAHARISHI KARVE ROAD, MUMBAI 400 020. VS.` M/S NEPTUNE FINCOT PVT. LTD. C - 101, B, SHANKARDHAM PLAZA, NEAR MEHUL CINEMA, J.N. ROAD, MULUND (W), MUMBAI 400 080. APPELLANT RESPONDENT CO NO. 08/MUM/2015 ARISING OUT OF ITA NO. 6410/MUM/2013 ASSESSMENT YEAR: - 2007 - 08 M/S NEPTUNE FINCOT PVT. LTD. C - 101, B, SHANKARDHAM PLAZA, NEAR MEHUL CINEMA, J.N. ROAD, MULUND (W), MUMBAI 400 080. VS.` DY. COMMISSIONER OF INCOME TAX 10(3), MUMBAI ROOM NO. 451, 4 TH FLOOR, AAYKAR BHAVAN, MAHARISHI KARVE ROAD, MUMBAI 400 020. APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 1.8.2013 FOR A.Y. 2007 - 08. THE REVENUE HAS RAISED FOLLOWING GROUNDS: - REVENUE BY SHRI N. PADMANABHAN ASSESSEE BY SHRI NISHIT GANDHI DATE OF HEARING 23.03.2015 DATE OF PRONOUNCEMENT 25 .03.2015 M/S NEPTUNE FINCOT PVT. LTD. 2 | P A G E 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING REBATE U/S 88E WHILE COMPUTING THE BOOK PROFIT U/S 115JB OF I. T. ACT.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HA S FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 115JB IS AN OVER - RIDING PROVISION AND THE QUESTION OF DEDUCTION OF REBATE FOR STT PAID U/S 80E DOES NOT ARISE.' 2. THE ONLY ISSUE ARISES FROM THE GROUNDS RAISED BY THE REVENUE IS WHETHER THE REBATE U/S 88E HAS TO BE ALLOWED WHILE COMPUTING BOOK PROFIT U/S 115JB. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS ISSUE IS NOW COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX VS. MBL & CO. LTD 358 ITR 01 . WE FURTHER NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THE CO - ORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 13.03.2015 IN CASE OF DCIT VS. M/S MEHTA VAKIL AND CO. PVT.LTD. IN ITA NO. 8741/MUM/2011, IN PARA 5 TO 7 AS UNDER: - 5. THE NEXT ISSUE RELATE TO THE COMPUTATION OF MAT TAX LIABILITY VIS - - VIS THE REBATE U/S 88E OF THE ACT. THE AO TOOK THE VIEW THAT THE MAT TAX LIABILITY SHOULD BE COMPARED WITH THE TAX PAYABLE UNDER NORMAL PROVISIONS OF THE TAX AFTER DEDUCTING THE REBATE AL LOWABLE U/S 88E OF THE ACT. HOWEVER, THE ASSESSEE CONTENDED THAT THE TAX LIABILITY UNDER BOTH THE PROVISIONS SHOULD BE COMPARED BEFORE DEDUCTING REBATE U/S 88E OF THE ACT. THE AO DID NOT AGREE WITH THE CONTENTIONS OF THE ASSESSEE AND HELD THAT, IF THE TAX PAYABLE AFTER ALLOWING REBATE U/S 88E WORKS OUT TO LESS THAN 10% OF THE BOOK PROFIT, THE PROVISIONS OF SEC. 115JB SHALL BE APPLICABLE. THE AO NOTICED THAT THE TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT AFTER GIVING REBATE U/S 88E OF THE ACT WAS RS. 98,02,699/ - AND THE SAME WORKED OUT TO LESS THAN 10% OF BOOK PROFIT COMPUTED U/S 115JB OF THE ACT. ACCORDINGLY, THE AO HELD THAT THE BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME AND HENCE THE TAX SHALL BE PAYABLE AT 10% OF BOOK PROFIT. HOWEVER, THE L D CIT(A) REVERSED THE DECISION OF THE AO AND HENCE THE REVENUE HAS FILED THIS APPEAL BEFORE US. 6. WE NOTICE THAT THE LD CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THE BANGALORE BENCH OF TRIBUNAL IN THE CASE OF M/S HORIZON CAPITAL LTD (ITA NO.592/BANGAL ORE/2010) AND ALSO THE DECISION RENDERED BY THE DELHI BENCH M/S NEPTUNE FINCOT PVT. LTD. 3 | P A G E OF TRIBUNAL IN THE CASE OF M/S MBL & CO. LTD (ITA NO.2478/DEL/2010), WHEREIN IT WAS HELD THAT THE REBATE U//S 88A TO 88E SHALL ALSO APPLY TO THE TAX COMPUTED U/S 115JB OF THE ACT. THE TRIBUNAL HAS ALSO NOTICED THAT THE RETURN OF INCOME (ITR - 6) PRESCRIBED IN THE INCOME TAX RULES ALSO SUPPORTED THE VIEW TAKEN BY THE ASSESSEES. ACCORDINGLY, THE LD CIT(A) REVERSED THE VIEW TAKEN BY THE AO. 7. WE NOTICE THAT THE DECISION RENDERED BY THE BANGALORE BENC H OF TRIBUNAL IN THE CASE OF M/S HORIZON CAPITAL LTD (SUPRA) HAS SINCE BEEN APPROVED BY THE HONBLE HIGH COURT OF KARNATAKA (2011)(245 CTR 601; 64 DTR 306), WHEREIN IT WAS HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCT THE REBATE U/S 88E OF THE ACT FROM THE TAX LIABILITY ARISING U/S 115JB OF THE ACT. THE CO - ORDINATE BENCH OF THE TRIBUNAL HAS ALSO TAKEN IDENTICAL VIEW IN THE CASE OF M/S AMBIT SECURITIES BROKING P LTD VS. ADDL. CIT (ITA NO.7856/M/2011 DATED 6.2.2013). ALL THESE DECISIONS GO TO SHOW THAT THE TRI BUNAL/HIGH COURT HAS TAKEN A CONSISTENT VIEW THAT THE TAX LIABILITY ARISING UNDER NORMAL PROVISIONS OF THE ACT AND U/S 115JB OF THE ACT SHOULD BE COMPARED BEFORE ALLOWING REBATE U/S 88E OF THE ACT. CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL/HIGH COURT, WE ARE OF THE VIEW THAT THERE IS NO INFIRMITY IN THE DECISION RENDERED BY LD. CIT(A) ON THIS ISSUE. 4. ACCORDINGLY, FOLLOWING THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX VS. MBL & CO. LTD (SUPRA) AS WELL AS THE D ECISION OF THIS COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS. M/S MEHTA VAKIL AND CO. PVT.LTD. (SUPRA) , WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) IN ALLOWING THE REBATE U/S 88E FROM THE TAX LIABILITY ARISING UNDER MAT . 5. IN T HE CROSS OBJECTION, THE ASSESSEE HAS RAISED THE ONLY ISSUE AS UNDER: - 1 IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE REASSESSMENT FRAMED U/S. 147 R.W.S 143(3) WAS BAD IN LAW IN AS MUCH AS THE REQUISITE PRECONDITIONS FOR INITIATING REASSESSMENT PROCEEDINGS AS WELL COMPLETION THEREOF WERE NOT FULFILLED. 6. THE ASSESSEE HAS RAISED ONLY A LEGAL GROUND OF VALIDITY OF RE - OPENING OF ASSESSMENT. HOWEVER, IN VIEW OF OUR FINDING ON THE MERITS OF THE ISSUE, THE GROUND RAISED BY THE ASSESSEE IN THE CROSS OBJECTION BECOMES ACADEMIC. ACCORDINGLY, WE DO NOT PROPOSE TO DISPOSE OFF THE SAME. M/S NEPTUNE FINCOT PVT. LTD. 4 | P A G E 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS THE APPEAL FILED BY THE ASSESSED ARE DISMISSED. ORDER PRONOUCNED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH 2015 SD/ - SD/ - ( N.K. BILLAIYA ) (VIJAY PAL RAO) ( ACCOUNTANT MEMBER ) (JUDICIAL MEMBER ) MUMBAI DATED 25 .03.2015 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI