D.C.I.T. CENT. CIR. - 7(2), Mumbai V. GAMMON INFRASTRUCTURE PROJECTS LTD., Mumbai

ITA 7089/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6390 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency; Rule 8D
• Section: 14A; 115JB; 2

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL G BENC H MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 7089/MUM/2017 FOR (ASSESSMENT YEAR 2008-09) ITA NO. 7088/MUM/2017 FOR (ASSESSMENT YEAR 2009-10) ITA NO. 7087/MUM/2017 FOR (ASSESSMENT YEAR 2011-12) DCIT, CC- 7(2) ROOM NO. 655, 6 TH FLOOR, AAYAKAR BHAWAN, MUMBAI-400020. VS. M/S GAMMON INFRASTRUCTURE PROJECTS LTD., GAMMON HOUSE, VEER SAVARKAR MARG, PRABHADEVI, MUMBAI-400025 PAN: AABCG8641H APPELLANT RESPONDENT APPELLANT BY : SHRI CHAUDHARY ARUN KUMAR SINGH (DR) RESPONDENT BY : SHRI VINOD MODI (AR) DATE OF HEARING : 07.02.2019 DATE OF PRONOUNCEMEN T : 07.02.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS GROUP OF THREE APPEALS BY REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LEARNED COMMISSIONER (APPEALS)- 47, MUMBA I ALL DATED 19 TH SEPTEMBER 2017 FOR ASSESSMENT YEAR 2008-09, 2009-10 & 2011-12. IN ALL THE APPEALS THE REVENUE HAS RAISED COMMON GROUNDS O F APPEAL. THUS, WITH THE CONSENT OF PARTIES ALL THE APPEALS WERE CLUBBED , HEARD TOGETHER AND ARE DECIDED BY COMMON ORDER. FOR APPRECIATION OF FACT T HE APPEAL FOR ASSESSMENT YEAR 2011-12 IS TREATED AS LEAD CASE. IN ITA NO. 7087/MUM/2017, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O N ACCOUNT OF EXPENDITURE ITA NO. 7089, 7088 & 7087 MUM 2017 M/S GAMMON INFRASTRUCTURE P ROJECTS LTD. 2 UNDER SECTION 14A READ WITH RULE 1962 IS COVERED UN DER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2). (2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O N ACCOUNT OF EXPENDITURE UNDER SECTION 14A READ WITH RULE 1962 WITHOUT APPRE CIATING THE DECISION OF HONBLE ITAT, F-BENCH, MUMBAI VIDE ITS ORDER DAT ED 21.10.2015 IN THE DCIT VS. VIRAJ PROFILES LTD (2016) 156 ITD 72 (MUMB AI-TRIB.) THAT IN TERMS OF CLAUSE (F) TO EXPLANATION 1 TO SECTION 115 JB(2) AND DABUR INDIA LTD. VS. ACIT (2013) 145 ITD 175 (MUMBAI TRIB.) DIS ALLOWANCE MADE BY ASSESSING OFFICER UNDER SECTION 14A, READ WITH RULE 8D OF 1962 RULES, HAS TO BE ADDED BACK FOR PURPOSE OF ARRIVING AT FIGURE OF BOOK PROFIT.. 2. AT THE OUTSET OF HERING, THE LD. AR OF THE ASSESSEE SUBMITS THAT THE GROUND OF APPEAL RAISED BY REVENUE IS COVERED IN FAVOUR OF AS SESSEE BY THE DECISION OF TRIBUNAL IN ITA NO. 108/MUM/2017 RADHA MADHAV INVES TMENTS PVT. LTD. VS. DCIT DATED 12.09.2018 WHEREIN THE TRIBUNAL BY R ELYING THE DECISION OF SPECIAL BENCH OF DELHI TRIBUNAL IN ACIT VS. VIREET INVESTMENT PVT. LTD. (ITA NO. 502/DEL/2012) WHEREIN IT WAS HELD THAT NO ADJUSTMENT OF DISALLOWANCE U/S 14A IS REQUIRED TO BE MADE IN BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB. 3. ON THE OTHER HAND, THE LD. CIT(DR) AFTER GOING THRO UGH THE CONTENTS OF DECISION OF TRIBUNAL IN RADHA MADHAV INVESTMENT PVT . LTD. (SUPRA) SUBMITS THAT HE STRONGLY RELIED ON THE ORDER OF ASSESSING O FFICER. 4. WE HAVE CONSIDERED THE SUBMISSION OF LEARNED AUTHOR ISED REPRESENTATIVE OF THE ASSESSEE AND THE LEARNED DR FOR THE REVENUE AND ALSO CAREFULLY PERUSED THE ORDER OF AUTHORITIES BELOW. WE HAVE ALSO DELIBE RATED ON VARIOUS CASE LAWS RELIED BY LOWER AUTHORITIES. WE HAVE NOTED THA T THE LD. CIT(A) WHILE ITA NO. 7089, 7088 & 7087 MUM 2017 M/S GAMMON INFRASTRUCTURE P ROJECTS LTD. 3 GRANTING RELIEF TO THE ASSESSEE RELIED UPON THE DEC ISION OF SPECIAL BENCH OF DELHI TRIBUNAL IN VIREET INVESTMENT PVT. LTD. (SUPR A) WHEREIN IT WAS HELD THAT COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB OF THE ACT SHOULD BE MADE WITHOUT CONSIDERING THE DISALLOWANCE UNDER SEC TION 14A READ WITH RULE 8D. THE LD. CIT(A) ALSO REFERRED AND RELIED U PON THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT VS. JSW ENERGY LTD . [2015] 60 TAXMANN.COM 303 (BOM.) WHEREIN HONBLE COURT ALSO H ELD THAT PROVISION OF SECTION 14A CANNOT IMPORTED INTO THE COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB. IN VIEW OF THE ABOVE LEGAL DISCUSSIO N AND THE DECISION REFERRED BY LD. AR OF THE ASSESSEE IN RADHA MADHAV INVESTMENT PVT. LTD. (SUPRA), WE DO NOT FIND ILLEGALITY AND INFIRMITY IN THE ORDER OF LD. CIT(A), WHICH WE AFFIRM. IN THE RESULT, GROUNDS OF APPEAL R AISED BY REVENUE ARE DISMISSED. 5. IN ITA NO. 7088 & 7087/MUM/2017 FOR A.Y. 2009-10 & 2008-09, THE REVENUE HAS IDENTICAL GROUND OF APPEAL AS RAISED IN APPEAL FOR A.Y. 2011-12. CONSIDERING OUR DECISION ON IDENTICAL GROUND OF APP EAL FOR A.Y. 2011-12 AND FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE GRO UND OF APPEAL RAISED BY REVENUE IN THESE APPEAL ARE ALSO DISMISSED. 6. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/02/2019 . SD/ SD/- MANOJ KUMAR AGGARWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMB ER MUMBAI, DATE: 07 .02.2019 ITA NO. 7089, 7088 & 7087 MUM 2017 M/S GAMMON INFRASTRUCTURE P ROJECTS LTD. 4 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI