ACIT, Ludhiana V. M/s Aarti Steels Ltd., Ludhiana

ITA 930/CHANDI/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5151 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: SUBHASH AGGARWAL
• Section: 14A; 115JB; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 930/CHD/2013 ASSESSMENT YEAR: 2007-08 THE ACIT, VS. M/S AARTI STEELS LTD., CIRCLE-V, LUDHIANA LUDHIANA PAN NO. AABCA4455D (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAVI SARANGAL RESPONDENT BY : SH. SUBHASH AGGARWAL DATE OF HEARING : 18.05.2017 DATE OF PRONOUNCEMENT : 25.05.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL BY THE REVENUE HAS BEEN RESTORED BACK BY THE HON'BLE PUNJAB & HARYANA HIGH COURT FOR DECISION AF RESH ON ALL ISSUES RELATING TO THE ISSUE OF DISALLOWANCE U/S 14A OF TH E INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') TO THIS TRIBUNAL VIDE ORDER DA TED 28.11.2016 PASSED IN ITA - 483-2015 (O&M). 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FOR THE YEAR UNDER CONSIDERATION HAD DECLARED INCOME OF RS. 28.87 CORE S U/S 115JB OF THE ACT. THE ASSESSING OFFICER, HOWEVER, NOTED THAT ASSESSEE HAD SHOWN INVESTMENT IN SHARES AND MUTUAL FUNDS AND ALSO EARNED DIVIDEND INCOME. HE, THEREFORE, COMPUTED THE DISALLOWANCE U/S 14A OF THE ACT AT ABO UT RS. 1.03 CRORES. THE ASSESSING OFFICER ACCORDINGLY ASSESSED THE REGULAR INCOME OF THE ASSESSEE AT RS. 1.03 CRORES AGAINST NIL INCOME DECLARED. H OWEVER, THE BOOK PROFIT OF RS. 28.87 CRORES WERE ASSESSED FOR TAXATION PURP OSES U/S 115JB OF THE ACT. THE ASSESSEE CHALLENGED THE DISALLOWANCE COMPU TED U/S 14A IN APPEAL BEFORE THE CIT(A). HOWEVER, LD. CIT(A) WITHOUT ADJ UDICATING THE ISSUE REGARDING VALIDITY AND CORRECTNESS OF THE DISALLOWA NCE MADE BY THE ASSESSING OFFICER U/S 14A, HELD THAT DISALLOWANCE U /S 14A WAS NOT TO BE ADDED IN BOOK PROFITS COMPUTED U/S 115JB OF THE AC T. 3. BEING AGGRIEVED BY THE SAID ORDER OF THE CIT(A), THE ASSESSEE PREFERRED APPEAL BEFORE THIS TRIBUNAL. THE TRIBUNAL , HOWEVER, HELD THAT SINCE THE REGULAR INCOME COMPUTED AT RS. 1.03 CRORE S WAS LESS THAN THE RETURNED INCOME U/S 115JB OF THE ACT FOR THE PURPOS ES OF TAXATION, THEREFORE, THE ASSESSEE AS WELL AS THE REVENUE SHOU LD NOT HAVE ANY GRIEVANCE ON THE ADDITION MADE OF RS. 1.03 CRORES S INCE THE TAX WAS PAYABLE U/S 115JB OF THE ACT. BEING AGGRIEVED BY THE ABOVE ORDER, THE REVENUE PREFERRED APPEAL BEFORE THE HONBLE PUNJAB & HARYANA HIGH COURT HIGH COURT. THE HON'BLE HIGH COURT VIDE ORDE R DATED 28.11.2016 (SUPRA) HAS REMANDED THE MATTER BACK TO THE TRIBUNA L OBSERVING THAT THE ISSUE WAS NOT AS TO WHETHER THE DISALLOWANCE MADE U /S 14A IS TO BE ADDED INTO THE BOOK PROFIT U/S 115JB OF THE ACT OR NOT, R ATHER THE ISSUE WAS 3 REGARDING THE CORRECTNESS OF THE COMPUTATION OF DIS ALLOWANCE U/S 14A OF THE ACT IN REGULAR ASSESSMENT AS THE SAME HAS A BEA RING EFFECT IN FUTURE YEARS ON ACCOUNT OF THE BENEFIT ACCORDED TO THE ASS ESSEE U/S 115JAA OF THE ACT. THE HON'BLE HIGH COURT, HOWEVER, HAS FURTHER DIRECTED THAT IT WOULD BE OPEN TO THE ASSESSEE TO RAISE THE CONTENTION BEF ORE THE TRIBUNAL THAT THE MATTER SHOULD BE DECIDED BY THE CIT(A) FIRST, AS TH E CIT(A) HAS NOT DETERMINED THE RELEVANT ISSUES RAISED BY THE ASSESS EE. THE HON'BLE HIGH COURT HAS HELD THAT IT WOULD BE OPEN FOR THE TRIBUN AL TO DECIDE WHETHER TO REMAND THE MATTER TO THE CIT(A) OR TO DECIDE IT, IT SELF, AS THE TRIBUNAL IS ALSO A FACT FINDING AUTHORITY. 4. BEFORE US, BOTH THE LD. REPRESENTATIVES OF THE P ARTIES HAVE SUBMITTED THAT THE MATTER BE RESTORED TO THE FILE OF CIT(A). THE LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE RECTIFICA TION NOTICE DATED 25.9.2013 U/S 154 OF THE ACT ISSUED BY THE LD. CIT( A) TO THE ASSESSEE, WHEREIN, THE LD. CIT(A) HIMSELF HAS OBSERVED THAT NO DISALLOWANCE U/S 14A WAS MADE BY THE ASSESSING OFFICER WHILE COMPUTI NG THE BOOK PROFITS U/S 115JB, HOWEVER, LD. CIT(A) VIDE IMPUGNED ORDER HAS ALLOWED GROUNDS OF APPEAL BY HOLDING THAT DISALLOWANCE MADE U/S 14A FOR COMPUTING BOOK PROFITS U/S 115JB OF THE ACT IS DELETED. THE LD. CI T(A), THEREFORE, HAS PROPOSED TO DECIDE THE ISSUE RELATING TO DISALLOWAN CE U/S 14A READ WITH RULE 8D AFRESH IN ACCORDANCE WITH LAW AS PER MATER IAL AVAILABLE ON RECORD. 5. AS REQUESTED BY BOTH THE LD. REPRESENTATIVES OF THE PARTIES AND ALSO SINCE LD. CIT(A) IS ALREADY SEIZED OF THE MATTER B Y WAY OF INVOKING THE PROVISIONS OF SECTION 154 OF THE ACT AND HAS ALREAD Y PROPOSED TO DECIDED 4 THE ISSUE AFRESH, HENCE, WE DEEM IT FIT TO RESTORE THIS MATTER TO THE FILE OF THE CIT(A) WITH A DIRECTION TO DECIDE ALL THE ISSU ES RAISED BY THE ASSESSEE IN ITS APPEAL BEFORE THE CIT(A) AFRESH, IN THE LIGH T OF THE DIRECTIONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT VIDE ORDER DAT ED 28.11.2016 (SUPRA). 6. IN THE RESULT, THE APPEAL BY THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25.05.2017 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25 TH MAY, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR