DCIT 10(1), MUMBAI V. ITD CEMENTATION INDIA LTD, MUMBAI

ITA 6833/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2724 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 10-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A; 115JB; 37

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, I MUMBAI .. , , , BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER, AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.6833/MUM/2014 ASSESSMENT YEAR: 2009-10 D C I T 10(1) ROOM NO. 453, 4 TH FLOOR AAYAKAR BHAVAN MUMBAI 400020 / VS. M/S. ITD CEMENTATION INDIA LTD. NATIONAL PLASTIC BUILDING A-SUBHASH ROAD PARANJPE B SCHEME VILE PARLE (E), MUMBAI 400057 ( # / REVENUE) ( $%&' /ASSESSEE) PAN. NO. AAACT142A ( # ) '* / DATE OF HEARING : 12/07/2016 ) '* / DATE OF ORDER: 12/07/2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 05/08/2010 OF LD. COMMISSIONER OF INCOME TAX, MUMBA I. THE ONLY GROUND AGITATED BY THE REVENUE, BEFORE THI S TRIBUNAL, IS WITH RESPECT TO DIRECTING THE ASSESSING OFFICER TO ALLOW FORESEEN LOSSES OF RS.3,79,69,663/-. # ! / REVENUE BY SHRI A.K. KARDAM $%&' ! / ASSESSEE BY SHRI VIJAY MEHTA ITA NO.6833/MUM/2014 M/S. ITD CEMENTATION INDIA LTD. 2 2. DURING HEARING, THE LEARNED D.R. SHRI A.K. KARDA M DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER . HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI VIJAY MEH TA CONTENDED THAT THE IMPUGNED ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL FOR ASSESS MENT YEAR 2008-09 (VIDE ORDER DATED 08.12.2015) (ITA NO. 6476/MUM/2013). THIS FACTUAL MATRIX WAS NOT CONTROV ERTED BY THE LEANRED D.R. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE AB OVE WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE ORDER OF THE TRIBUNAL DATED 08.12.2015 FOR READY REFERENCE A ND ANALYSIS: - THIS APPEAL FILED BY THE REVENUE ON 1.11.2013 IS A GAINST THE ORDER OF THE CIT (A)-21, MUMBAI DATED 14.8.2013 FOR THE A SSESSMENT YEAR 2008-2009. IN THIS APPEAL, REVENUE RAISED THE FOLLO WING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITIONS OF R S. 7,14,92,402/- ON ACCOUNT OF NON-RECONCILIATION OF A IR DATA WITHOUT APPRECIATING THE FACT THAT THE TRANSACTIONS WERE CARRIED OUT ON PAN OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT (A) ERRED IN ALLOWING THE ASSESSEES CLA IM OF UNFORESEEN LOSSES OF RS. 4,82,62,449/- WHICH IS CON TINGENT LOSS AND ARE NOT ALLOWABLE AS PER THE PROVISION OF THE S ECTION 37 OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS . 13.85 LAKHS MADE IN ACCORDANCE WITH RULE 8D R.W.S 14A OF THE AC T. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE IS A CIVIL CONTRACTOR AND FILED THE RETURN OF INCOME FOR THE AY 2008-09 DECLARING THE TOTAL INCOM E OF RS. 52,48,377/- AFTER SET-OFF OF UNABSORBED DEPRECI ATION OF RS.9,14,38,861/-. ASSESSMENT WAS COMPLETED U/S 143(3)(II) OF THE ACT AND THE ASSESSED INCOME WAS ITA NO.6833/MUM/2014 M/S. ITD CEMENTATION INDIA LTD. 3 DETERMINED AT RS. 20,19,52,818/- UNDER THE NORMAL PROVISIONS AND BOOK PROFITS U/S 115JB WAS DETERMINE D AT RS. 17,13,70,000/-. IN THE ASSESSMENT, AO MADE CERT AIN ADDITIONS VIZ (I) RS. 7,44,01,605/- ON ACCOUNT OF N ON- RECONCILIATION OF AIR ENTRIES WITH THAT OF THE BOOK S OF ACCOUNTS OF THE ASSESSEE; (II) RS. 4,82,62,449/- ON ACCOUNT OF FUTURE LOSSES; (III) DISALLOWANCE OF RS. 15.29 LAKHS U/S 14A R.W. RULE 8D OF THE ACT ARE SOME OF T HE ADDITIONS MADE BY THE AO. AGGRIEVED WITH THE SAID DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLAT E AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ON PERUSAL OF THE RELEVANT MATERIAL PL ACED BEFORE HIM, CIT (A) GRANTED PART RELIEF TO THE ASSE SSEE. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), RE VENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABO VE MENTIONED GROUNDS. 4. GROUND NO.1 RELATES TO THE DELETION OF ADDITION BY THE CIT (A) FOR ASSESSEES DENIAL OF ALLEGED TRANSACTIO N AND AOS FAILURE TO ESTABLISH THAT THE IMPUGNED TRANSAC TIONS BELONG TO THE ASSESSEES ONLY. CIT (A) DELETED THE ADDITION CONSIDERING THE AOS FAILURE TO DISCHARGE HIS ONUS. ON THIS ISSUE, CIT (A) PASSED A SPEAKING ORDER AS EVIDENT F ROM PARA 2.3 OF HIS ORDER. RELEVANT LINES FROM THE SAID PARA 2.3 OF THE CIT (A)S ORDER ARE EXTRACTED AS UNDER: 2.3........ ............. IN VIEW OF THE ABOVE DECISIONS, IT IS CLEAR THAT APPELLANT HAD DENIED THE ABOVE TRANSACTIONS FROM THE BEGINNIN G AND AO ALSO COULD NOT PROVE POSITIVELY THAT ABOVE TRANSACTIONS BELONG TO APPELLANT, HENCE, ADDITION CANNOT BE SUSTAINED. THI S GROUND OF APPEAL IS ALLOWED. 5. AFTER HEARING THE LD REPRESENTATIVES OF BOTH TH E PARTIES, WE FIND THAT AO EXPECTS AN IMPOSSIBILITY T O MEET. HOW WILL ASSESSEE RECONCILE THE TRANSACTION, WHICH DOES NOT PERTAIN TO HIM AT ALL? THEREFORE, ON PERUSAL OF THE RELEVANT MATERIAL ON THIS ISSUE PLACED BEFORE US AS WELL AS THE ORDERS OF THE REVENUE AUTHORITIES, WE ARE OF THE CONSIDERED OPINION THAT THE DECISION TAKEN BY THE C IT (A) ON THIS ISSUE IS FAIR AND REASONABLE AND IT DOES NO T CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.1 RAIS ED BY THE REVENUE IS DISMISSED. ITA NO.6833/MUM/2014 M/S. ITD CEMENTATION INDIA LTD. 4 6. GROUND NO.2 RELATES TO THE DELETION OF ADDITION OF RS. 4.83 CRS (ROUNDED OF). BEFORE US, ON THIS ISSUE, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO P ARA 3 OF THE ORDER OF THE CIT (A) AND SUBMITTED THAT SIMI LAR ADDITION WAS MADE IN EARLIER YEARS IN ASSESSEES OW N CASE AND THE MATTER TRAVELLED TO THE ITAT VIDE ITA NO.2991/MUM/2011, DATED 17.5.2013. PARA 3.3 OF THE CIT (A)S ORDER IS RELEVANT IN THIS REGARD. WHILE ADJUDICATING THIS ISSUE, CIT (A) EXTRACTED PARA 18 AND 19 OF THE SAID TRIBUNALS ORDER (SUPRA) DATED 17.5.201 3 IN PARA 3.3 OF HIS ORDER AND DECIDED THE ISSUE IN FAVO UR OF THE ASSESSEE. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, RELEVANT LINES FROM THE CIT (A)S CONCLUSION ON THE ISSUE UNDER CONSIDERATION ARE EXTRACTED AS UNDER: 3.3........... IN THE APPELLANTS OWN CASE, HONBLE ITAT DECIDED T HE CASE IN FAVOUR OF THE APPELLANT HENCE, FOLLOWING THE ABOVE DECISION; THE ADDITION MADE BY THE AO IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 7. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THA T WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE, CIT ( A) RELIED ON THE DECISION OF THE ITAT AND RIGHTLY FOLLOWED THE P RINCIPLE OF CONSISTENCY. THEREFORE, IN OUR VIEW, THE DECISION T AKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.2 RAISED BY TH E REVENUE IS DISMISSED. 4. WE FIND THAT ON IDENTICAL FACTS/ISSUE THE TRIBUN AL VIDE AFORESAID ORDER DATED 08.12.2015, WHILE DISPOSING O F GROUND NO. 2 WITH RESPECT TO UNFORESEEN LOSSES, BY FOLLOWI NG THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2004-05 (ITA NO . 3699 & 2991/MUM/2011 ORDER DATED 17.05.2013) DISMISSED THE APPEAL OF THE REVENUE. FOLLOWING THE PRINCIPLE OF C ONSISTENCY AND IN THE ABSENCE OF ANY CONTRARY FACTS, WE FIND N O INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). HIS STAND IS AF FIRMED, CONSEQUENTLY, APPEAL OF THE REVENUE IS DISMISSED. ITA NO.6833/MUM/2014 M/S. ITD CEMENTATION INDIA LTD. 5 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 12/07/2016. SD/- SD/- ( G.S. PANNU ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER ( MUMBAI; , DATED : 12/07/2016 AA? P.S / /. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. -./ / THE APPELLANT (RESPECTIVE ASSESSEE) 2. 01./ / THE RESPONDENT. 3. ( 2' ( - ) / THE CIT-10, MUMBAI. 4. ( 2' / CIT(A)- 21, MUMBAI, 5. 4#5 0' $ , -* -$6 , ( / DR, I BENCH, ITAT, MUMBAI 6. 7% 8 / GUARD FILE. ! / BY ORDER, 14' 0' //TRUE COPY// /! (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI