VLS Finance Ltd., New Delhi V. DCIT, New Delhi

ITA 746/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3916 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 06-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: YASHWANT BAJPAI; SHARA D AGRAWAL
• Section: 142(1); 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH D NEW DELHI BEFORE SRI G.D.AGRAWAL, HON BLE PRESIDENT AND SMT. BEENA A PILLAI, J UDICIAL MEMBER ITA NO. 746 /DEL/201 5 A.Y. 20 11 - 12 VLS FINANCE LTD. VS. DY.CIT, CENTRAL CIRCLE 19 13, SANT NAGAR NEW DELHI 2 ND FLOOR, EAST OF KAILASH NEW DELHI 110 065 PAN: AAACV 4183G (APPELLANT) (RESPONDENT) APPELLANT BY: SRI YASHWANT BAJPAI AND SH . SHARA D AGRAWAL, ADV. RESPONDENT BY: SH. AMIT JAIN, SR.D.R DATE OF HEARING : 1 7 .01.2018 DATE OF PRONOUNCEMENT : 19.01.18 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 26/11/14 PASSED BY LD.CIT(A) - 27, NEW DELHI FOR A SSESSMENT Y EAR 2011 - 12 ON THE FOLLOWING GROUNDS OF APPEAL: [1] THAT THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMIN G THE DISALLOWANCE OF RS .4 1,63,532/ - [RS .4 3,51,304 .00 - RS.1,87,832 .00 ] U/S 14A OF THE INCOME TAX ACT, 1961 (ACT) MADE BY ITA NO. 746/DEL/2015 A.Y:2011 - 12 VLS FINANCE LTD. VS. DY.CIT 2 THE A.O. APART FROM AMOUNT OF RS.1,87,832/ - OFFERED AND ALREADY ADDED BACK BY THE ASSESSEE IN ITS RETURN OF INCOME INSPITE OF THE FA CT [I] THAT THE LEARNED ASSESSING OFFICER (LAO) STRAIGHT AWAY APPLIED RULE 8D OF LT. RULES, 1962, BY RELYING UPON CBDT CIRCULAR NO.5 DATED 11.02.2014 WITHOUT PROCEEDING WITH AND MAKING COMPLIANCE OF THE PROVISIONS OF SUB - SECTIONS (2) & (3) OF SECTION 14A OF THE ACT AND THE LEGAL POSITION ON THE ISSUE IN QUESTION PRONOUNCED BY VARIOUS COURTS. [II] THAT THE LAO HAS NOT RECORDED SATISFACTION FOR DISAGREEING WITH THE CORRECTNESS OF THE DISALLOWANCE FOR RS.187832/ - WORKED OUT BY THE ASSESSEE. [III] THAT THE LAO HAS ALSO NOT GIVEN ANY COGENT REASONS FOR HIS DISAGREEMENT. [2] THAT THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE ADJUSTMENT OF RS .41 ,63,532/ - TOWARDS DISALLOWANCE MADE BY THE AO U/S 1 4A OF THE ACT WHILE COMPUTING BOOK PROFI T U/S 115JB OF THE ACT. [3] THAT THE APPELLANT CRAVES THE INDULGENCE OF THE LEARNED MEMBERS OF THE ITAT TO ADD, MODIFY, DELETE, WITHDRAW AND/OR ALTER ANY OF THE GROUNDS OF APPEAL, IF NECESSARY. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : A SSESSEE FILED ITS RETURN OF INCOME ON 28/09/11 DECLARING TOTAL INCOME OF RS.31,13,383/ - UNDER NORMAL INCOME AND BOOK PROFIT OF RS.7,27,33,275/ - UNDER MAT. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX A CT , 1961 (THE ACT) AND NOTICES WERE I SSUED UNDER SECTION 143(2) AND 142(1) OF THE A CT. IN RESPONSE TO STATUTORY NOTICES , R EPRESENTATIVES OF ASSESSEE ATTENDED FROM TIME TO TIME AND FILED REQUIRED DETAILS AS CALLED FOR. 2.1. WHILE COMPLETING ASSESSMENT, A SSESSING O FFICER MADE ADDITION OF RS . 41,63,532/ - ON ACCOUNT OF DISALLOWANCE U/S 14A OF ITA NO. 746/DEL/2015 A.Y:2011 - 12 VLS FINANCE LTD. VS. DY.CIT 3 THE INCOME TAX ACT, 1961 (THE ACT) READ WITH RULE 8D OF INCOME TAX RULES, 1961 AN D RS.1,28,540/ - ON ACCOUNT OF DISALLOWANCE OF SHARE TRANSACTION CHARGES. 2.2. AGGRIEVED BY THE ORDER OF LD.AO ASSESSEE PREFER RED APPEAL BEFORE LD.CIT(A), WHO CONFIRMED THE ADDITIONS MADE BY LD. AO. 2.3. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS IN APPEAL BEFORE US NOW. 3. LD. AR SUBMITTED THAT A SSESSING O FFICER WHILE COMPUTING DISALLOWANCE MADE UNDER SECTION 14A , MADE ADJUSTMENTS TO THE BOOK PROFITS OF ASSESSEE UNDER SECTION 115 JB OF THE ACT . LD. A.R. SUBMITTED THAT THE ISSUE NOW STANDS SQUARELY COVERED BY DEC ISION OF SPECIAL BENCH OF THIS T RIBUNAL IN THE CASE OF ACIT VS. VIREET I NVESTMENTS PVT. LTD., REPORTED IN (2017) 82 T AXMANN.COM 415 . HE SUBMITTED THAT THE ISSUE NEEDS TO BE RESTORED BACK TO THE FILE OF THE LD.AO FOR RECOMPUTING THE DISALLOWANCE UNDER SECTION 14A IN TERMS OF OBSERVATIONS RECORDED BY THIS T RIBUNAL IN THE CASE OF ACIT VS. VIREET I NVESTMENTS P VT. LT D . 3.1. LD. DR D ID NOT OBJECT TO THE SUBMISSIONS ADVANCED BY LD.AR. 4. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. 4.1. IT IS OBSERVED THAT THE S PECIAL B ENCH OF THIS T RIBUNAL IN THE CASE OF ACIT VS. VIREET I NVESTMENTS PVT. LT D . WAS DEALING WITH THE SIMILAR ISSUE WHERE LD. AO WHILE COMPUTING THE BOOK PROFITS UNDER SECTION 115JB, MADE ADDITION ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14 A AS PER THE P&L ACCOUNT. THIS TRIBUNAL REMANDED THE ITA NO. 746/DEL/2015 A.Y:2011 - 12 VLS FINANCE LTD. VS. DY.CIT 4 I SSUE BACK TO THE FILE OF LD. AO FOR RECOMPUTING IT IN TERMS OF OBSERVATIONS MADE THEREIN. 4.2. WE ACCORDINGLY DIRECT LD.AO TO COMPUTE THE DISALLOWANCE UNDER SECTION 14A IN TERMS OF THE OBSERVATIONS MADE BY THIS T RIBUNAL IN THE CASE OF ACIT VS. VIREET I NVES TMENTS PVT. LT D . ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PASSED IN THE OPEN COURT ON 19 TH J ANUARY, 2018. S D / - S D / - (G.D.AGRAWAL) (BEENA A PILLAI) PRESIDENT JUDICIAL MEMBER DT. 1 9 T H JANUARY, 2018 *MV ITA NO. 746/DEL/2015 A.Y:2011 - 12 VLS FINANCE LTD. VS. DY.CIT 5 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON 1 8 .01.2018 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 19 .01.2018 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 19.01.2018 JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 1 9 . 0 1 . 1 8 SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER