DCIT CC 3(1) CEN RG 3, MUMBAI V. PRATIBHA INDUSTRIES LTD, MUMBAI

ITA 6939/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4234 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI ABI RAMA KARTIKEYAN
• Keywords: Rule 8D
• Section: 143(3); 14A

Judgement Text

AAYAK AAYAK AAYAK AAYAKR APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQAKRNA N AKRNA N AKRNA N AKRNA NYAAYAPIZ YAAYAPIZ YAAYAPIZ YAAYAPIZ MAMUBA[ MAMUBA[ MAMUBA[ MAMUBA[- -- - MAO MAOMAO MAO. .. . IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SRI MAHAVIR SINGH, JM AND SRI MANOJ KUMAR A GGARWAL, AM AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SAM MM M . / ITA NOS.6939 & 6940/MUM/2017 ( INAQA-ARNA BAYA- / ASSESSMENT YEAR 2008-09 & 2009-10) DCIT, CENT. CIRCLE 3(1), CENTRAL RANGE-3, MUMBAI. VS. PRATIBHA INDUSTRIES LTD., 14TH FLOOR, UNIVERSAL MAJESTIC, P.L. LOKHANDE MARG, GOVANDI (W), MUMBAI ( APILAAQA APILAAQA APILAAQA APILAAQAI II I - -- - / APPELLANT) .. ( P` P`P` P`%YAQAA %YAQAA %YAQAA %YAQAAI II I- -- - / RESPONDENT) PAN NO. AAACP 4709 N REVENUE BY : SHRI ,SHRI ABI RAMA KARTIKEYAN, DR ASSESSEE BY : NONE DATE OF HEARING: 12.3.2019 DATE OF PRONOUNCEMENT : 12-03- 2019 AADOSA AADOSA AADOSA AADOSA / O R D E R PER MAHAVIR SINGH, JM: THESE APPEALS BY THE REVENUE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-51, MUMBAI [IN SHORT CIT(A)], IN APPEAL NO. CIT(A)-51/DC.CC-3(1)/IT-237/16-17 NO. C IT(A)-51/DC.CC- 3(1)/IT-238/16-17 BOTH DATED 21.9.2017. THE ASSE SSMENT WAS FRAMED BY THE DCIT CC-3(1) FOR THE A.Y. 2008-09 & 2009-10 VIDE SEPARATE ORDERS 2 ITA NO.6939 & 6940/MUM/2017 ASSESSMENT YEAR 2008-09 & 09-10 DATED 2.6.2016 UNDER SECTION 143(3) OF THE INCOME T AX ACT, 1961 (HEREINAFTER THE ACT). 2. THE ONLY COMMON ISSUE RAISED IN THESE APPEALS OF THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) IN DELET ING THE ADDITION OF DISALLOWANCE OF 2,61,68,800/- FOR THE A.Y. 2008-09 AND 1,58,65,718/- FOR A.Y. 2009-10 UNDER SECTION. 14A O F THE ACT MADE TO BOOK PROFIT OF THE ASSESSEE UNDER SECTION.115JB. FOR THIS, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE ADDITION OF DISALLOWANCE OF 2,61,68,800/- FOR A.Y. 2008-09 AND 1,58,65,718/- FOR A.Y. 2009-10 UNDER SECTION. 14A MADE TO BOOK PROFIT OF THE ASSESSEE UNDER SECTION.115JB. 2. . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE DISALLOWA NCE MADE UNDER SECTION.14A CANNOT BE CONSIDERED WHILE COMPUT ING THE BOOK PROFIT UNDER SECTION.115JB 1(C) WHEN THE ISSUE IN THE CASE OF THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF F BENCH OF ITAT, MUMBAI IN THE CASE OF VIRAJ PROFILES LTD(2016) 156 ITD 72, MUMBAI . 3. SINCE THE FACTS ARE IDENTICAL IN BOTH THE ASSESS MENT YEARS, WE DISCUSS THE FACTS FOR THE ASSESSMENT YEAR 2008-09 A ND THE DECISION WILL APPLY MUTATIS-MUTANDIS TO THE ASSESSMENT YEAR 2009-10. 4. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF INFRASTRU CTURE FACILITIES. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IN ITS RETURN OF INCOME DECLARED BOOK PROFIT INCOME UNDER SECTION.11 5JB OF THE ACT AT 35,98,17,280/-. THE ORIGINAL ASSESSMENT WAS COMPLE TED UNDER 3 ITA NO.6939 & 6940/MUM/2017 ASSESSMENT YEAR 2008-09 & 09-10 SECTION.143(3) OF THE ACT ON 23.12.2010, INTER ALIA , DISALLOWING VARIOUS CLAIM OF EXPENSES BY THE ASSESSEE. IN THE SECOND APPEAL, AFTER GIVING TOTAL RELIEF TO THE ASSESSEE, THE CIT( A) DIRECTED THE AO TO ASCERTAIN THE ASSESSEES CLAIM THAT IT HAD SUO M OTO OFFERED AN AMOUNT OF 2,61,68,800/- FOR DISALLOWANCE UNDER SECTION.14A OF THE ACT. 5. THEREAFTER, THE AO WHILE GIVING APPEAL EFFECT PR OCEEDED TO RE- COMPUTE THE BOOK PROFITS UNDER SECTION.115JB BY FUR THER MAKING AN ADDITION OF 2,61,68,800/- UNDER SECTION.14A OF THE ACT. 6. ON APPEAL, THE CIT(A) DELETED THE DISALLOWANCE M ADE BY THE ASSESSING OFFICER. AGGRIEVED, THE REVENUE IS IN AP PEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. LD COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF IT AT DELHI, SPECIAL BENCH IN THE CASE OF VIREET INVESTMENT PVT LTD., 82 TAXMANN.COM 415(DEL), WHEREIN, IT IS HELD THAT WHILE APPLYING T HE PROVISIONS OF SECTION 115 JB OF THE ACT, THE COMPUTATION UNDER CL AUSE (F) OF EXPLANATION (1) TO SECTION 115 JB(2), THE DISALLOWA NCE IS TO BE MADE WITHOUT RESORTING TO THE COMPUTATION AS CONTEM PLATED UNDER SECTION.14A R.W. RULE 8D OF THE ACT. WE FIND THAT THIS ISSUE IS ALREADY SETTLED IN THE CASE OF VIREET INVESTMENT (S UPRA) AND HENCE, CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE GRO UND OF APPEAL OF THE REVENUE. 4 ITA NO.6939 & 6940/MUM/2017 ASSESSMENT YEAR 2008-09 & 09-10 8. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 12- - 03- 2019. AADOSA KI AADOSA KI AADOSA KI AADOSA KI GAAO GAAOGAAO GAAOYANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK 15. 03.2019 KAO KI KAO KI KAO KI KAO KI G GG G SD/ (MANOJ KUMAR AGGARWAL) (MAHAVI R SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12 03- 2019 BKP/SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//