L & T Infrastructure Development Projects Limited, CHENNAI V. DCIT, CHENNAI

ITA 807/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6371 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-08-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 03-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RU GEORGE
• Assessee Lawyers: N V BALAJI
• Section: 14A; 115JB; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.807 & 808/MDS/2017 ' (' / ASSESSMENT YEAR : 2012-13 M/S L&T INFRASTRUCTURE DEVELOPMENT PROJECTS LIMITED, POST BOX NO.979, MOUNT POONAMALLEE ROAD, MANAPAKKAM, CHENNAI - 600 089. PAN : AAACL 7617 D V. (1) THE PRINCIPAL COMMISSIONER OF INCOME-TAX, CHENNAI-4, CHENNAI - 600 034. (2) THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(1), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI N.V. BALAJI, ADVOCATE ,-*+ . / / RESPONDENT BY : SMT. RUBY GEORGE, CIT 0 . 1$ / DATE OF HEARING : 03.08.2017 2!( . 1$ / DATE OF PRONOUNCEMENT : 23.08.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE ASSESSEES APPEAL IN I.T.A. NO.807/MDS/2017 IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISS IONER OF INCOME TAX, CHENNAI, UNDER SECTION 263 OF THE INCOME-TAX A CT, 1961 (IN SHORT 'THE ACT') AND I.T.A. NO.808/MDS/2017 IS DIRE CTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8 , CHENNAI, 2 I.T.A. NOS.807 & 808/MDS/17 DATED 13.02.2017. SINCE BOTH THE APPEALS ARE FILED BY THE ASSESSEE, WE HEARD THE APPEALS TOGETHER AND DISPOSI NG OF THE SAME BY THIS COMMON ORDER. 2. LETS FIRST TAKE I.T.A. NO.807/MDS/2017. THE ON LY ISSUE ARISES FOR CONSIDERATION IS COMPUTATION OF BOOK PRO FIT UNDER SECTION 115JB OF THE ACT. 3. SHRI N.V. BALAJI, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THIS TRIBUNAL IN BEACH MINERALS COMPANY (P.) L TD. V. ACIT (2015) 64 TAXMANN.COM 218 FOUND THAT THE DISALLOWAN CE MADE UNDER SECTION 14A OF THE ACT CANNOT BE ADDED TO THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE PRINCIPAL COMM ISSIONER FOUND THAT THE ASSESSING OFFICER HAS NOT MADE ANY PROPER ENQUIRY. ACCORDING TO THE LD. COUNSEL, WHILE REFERRING TO TH E ORDER OF THIS TRIBUNAL IN THE ASSESSEE'S OWN GROUP COMPANY, THE P RINCIPAL COMMISSIONER FOUND THAT THE APPEAL WAS ALREADY FILE D BEFORE THE HIGH COURT, THEREFORE, THE ORDER OF THE ASSESSING O FFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE. IN THE CASE BEFORE US, ACCORDING TO THE LD. COUNSEL, THE ASSESS ING OFFICER, IN FACT, HAS TAKEN ONE OF THE VIEWS POSSIBLE. THEREFO RE, THE PRINCIPAL 3 I.T.A. NOS.807 & 808/MDS/17 COMMISSIONER CANNOT SAY THE ORDER PASSED BY THE ASS ESSING OFFICER IS ERRONEOUS. 4. WE HAVE HEARD SMT. RUBY GEORGE, THE LD. DEPARTME NTAL REPRESENTATIVE, ALSO. THIS TRIBUNAL IN THE ASSESSE E'S OWN GROUP COMPANY, BY AN ORDER DATED 11.08.2016, FOUND THAT T HE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT CANN OT BE ADDED TO THE BOOK PROFIT COMPUTED UNDER SECTION 115JB OF THE ACT. A SIMILAR VIEW WAS TAKEN BY THIS TRIBUNAL IN BEACH MI NERALS COMPANY (P.) LTD. (SUPRA). THEREFORE, AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, WHEN THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS UNDER THE PROVISIONS OF INCOME-TAX ACT, THE P RINCIPAL COMMISSIONER CANNOT SAY THAT THE ASSESSING OFFICER HAS NOT MADE ANY PROPER ENQUIRY. THEREFORE, THE PRINCIPAL COMMI SSIONER IS NOT JUSTIFIED IN EXERCISING HIS POWER UNDER SECTION 263 OF THE ACT. ACCORDINGLY, THE IMPUGNED ORDER OF THE PRINCIPAL CO MMISSIONER PASSED UNDER SECTION 263 OF THE ACT IS QUASHED. 5. NOW COMING TO I.T.A. NO.808/MDS/2017, THE ONLY I SSUE ARISES FOR CONSIDERATION IS DISALLOWANCE MADE BY THE ASSES SING OFFICER UNDER SECTION 14A OF THE ACT READ WITH RULE 8D(III) OF THE ACT. 4 I.T.A. NOS.807 & 808/MDS/17 6. SHRI N.V. BALAJI, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT ALL THE INVESTMENTS WERE MADE IN SUBSIDIARY CO MPANIES. THEREFORE, THE CIT(APPEALS) BY PLACING RELIANCE ON THE ORDER OF THIS TRIBUNAL IN ACIT V. SUN TV NETWORKS LIMITED IN I.T. A. NOS.1515 TO 1520/MDS/2013 CONFIRMED THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER. THE ASSESSEE NOW CONTENDS BEFORE THIS TRI BUNAL THAT THIS TRIBUNAL IN BEACH MINERALS COMPANY (P.) LTD. (SUPRA ) HELD THAT THE INVESTMENT MADE IN SISTER CONCERN CANNOT BE ATTRIBU TED FOR MANAGEMENT OF SUCH FUNDS. THEREFORE, THE TRIBUNAL FOUND THAT THERE CANNOT BE ANY DISALLOWANCE FOR EXPENDITURE. 7. WE HAVE HEARD SMT. RUBY GEORGE, THE LD. DEPARTME NTAL REPRESENTATIVE, ALSO. FROM THE MATERIAL AVAILABLE ON RECORD IT IS NOT KNOWN HOW THE COMPANIES IN WHICH THE INVESTMENTS WE RE MADE BY THE ASSESSEE ARE SUBSIDIARY COMPANIES OF THE ASSESS EE. THE SHAREHOLDING PATTERN OF THE COMPANIES IN WHICH INVE STMENTS WERE SAID TO BE MADE HAS NOT BEEN BROUGHT ON RECORD BY B OTH THE AUTHORITIES BELOW. IT IS ALSO NOT KNOWN HOW THE AS SESSEE WAS FORCED TO MAKE INVESTMENTS IN THOSE COMPANIES. UNL ESS IT IS BROUGHT ON RECORD THE SHAREHOLDING PATTERN OF THE C OMPANIES IN WHICH THE INVESTMENTS WERE MADE, THIS TRIBUNAL IS O F THE CONSIDERED 5 I.T.A. NOS.807 & 808/MDS/17 OPINION THAT THE ISSUE RAISED BY THE ASSESSEE CANNO T BE ADJUDICATED EFFECTIVELY. ACCORDINGLY, THE ORDERS OF BOTH THE A UTHORITIES BELOW ARE SET ASIDE AND THE ISSUE OF DISALLOWANCE UNDER SECTI ON 14A OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING O FFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER AND B RING ON RECORD THE SHAREHOLDING PATTERN OF THE COMPANIES IN WHICH THE INVESTMENTS WERE SAID TO BE MADE BY THE ASSESSEE-COMPANY AND AL SO THE SITUATION UNDER WHICH THE ASSESSEE WAS FORCED TO MA KE INVESTMENTS AND THEREAFTER, DECIDE THE ISSUE AFRESH IN ACCORDAN CE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 8. IN THE RESULT, THE ASSESSEES APPEALS IN I.T.A. NO.807/MDS/2017 IS ALLOWED AND I.T.A. NO.808/MDS/20 17 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23 RD AUGUST, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 23 RD AUGUST, 2017. KRI. 6 I.T.A. NOS.807 & 808/MDS/17 . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT, CHENNAI- 4, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.