M/S SPAN HOLDING PVT. LTD.,NEW DELHI V. ACIT, NEW DELHI

CO 20/DEL/2022

AI Insights

The case involves multiple appeals by M/s. Span Holding Pvt. Ltd. against the orders of the CIT(A)-24, New Delhi, concerning various assessment years from 2007-08 to 2013-14. The primary legal contention raised by the assessee was that no additions were made based on incriminating material, which is a prerequisite for assessments under Section 153A r.w.s. 143(3) of the Income Tax Act, as established by the Supreme Court in PCIT Vs. Abhisar Buildwell Pvt. Ltd. The Tribunal found that the additions made were not based on any incriminating material found during the search in the assessee's premises, leading to the quashing of the assessments for the years 2011-12, 2012-13, and 2013-14. The Tribunal also addressed procedural issues regarding the approval under Section 153D, which was not applicable for the assessment year 2013-14 due to the nature of the assessment being regular and not unabated.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 40562 (ITAT-DELHI)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Other Referred Cases: PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC), NTPC Vs. CIT (1998), 229 ITR 383 (SC)
• Laws Referred To: Section 153A r.w.s. 143(3) of the Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHAUDHARY
• Assessee Lawyers: M.P. RASTOGI
• Keywords: Proportionate interest; Tax effect; Earning of tax free income; Rule 8D
• Section: 143(3); 153A; 22; 14A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’ NEW DELHI BEFORESHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.455/Del/2017 Assessment Year: 2010-11 With ITA No.379/Del/2017 Assessment Year: 2013-14 M/s. Span Holding Pvt. Ltd., 220, Okhla Industrial Estate, Phase-III, New Delhi Vs. ACIT, Central Circle, New Delhi PAN :AAACS0294H (Appellant) (Respondent) With ITA No.782/Del/2017 Assessment Year:2007-08 With ITA No.783/Del/2017 Assessment Year:2008-09 With ITA No.784/Del/2017 Assessment Year: 2009-10 With ITA No.785/Del/2017 Assessment Year: 2010-11 With ITA No.786/Del/2017 Assessment Year: 2011-12 With ITA No.787/Del/2017 Assessment Year:2013-14 With ITA No.793/Del/2017 Assessment Year:2012-13 ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 2 | P a g e ACIT, Central Circle, New Delhi Vs. M/s. Span Holding Pvt. Ltd., 220, Okhla Industrial Estate, Phase-III, New Delhi PAN :AAACS0294H (Appellant) (Respondent) With C.O. Nos.18 to 24/De/2022 (Arising out of ITA Nos.782 to 787 & 793/Del/2017 Assessment Year: 2013-14 M/s. Span Holding Pvt. Ltd., 220, Okhla Industrial Estate, Phase-III, New Delhi Vs. ACIT, Central Circle, New Delhi PAN: AAACS0294H (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM The instant batch of sixteen cases pertains to the single assessee herein M/s. Span Holding Pvt. Ltd. All other relevant details, assessment year-wise are read as under: Sl. No. Appeal No. Appellant Respondent Order Appealed against 1. 455/Del/2017 for AY 2010-11 M/s. Span Holding Pvt. Ltd. ACIT, Central Circle-8, New Delhi CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 63/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. Assessee by Sh. M.P. Rastogi, Advocate Sh. Deepak Malik, Adv. Sh. Shivam Malik, Adv. Department by Ms. Jaya Chaudhary, CIT(DR) Date of hearing 17.12.2024 Date of pronouncement 27.12.2024 ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 3 | P a g e 2. 379/Del/2017 for AY: 2013-14 M/s. Span Holding Pvt. Ltd. ACIT, Central Circle-8, New Delhi CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 66/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 3-4 782/Del/2017 for AY: 2007-08 andC.O.No.18/Del /2022 ACIT, Central Circle-8, New Dehi M/s. Span Holding Pvt. Ltd. CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 95/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 5-6 783/Del/2017 for AY: 2008-09 and C.O.No.19/Del/20 22 ACIT, Central Circle-8, New Dehi M/s. Span Holding Pvt. Ltd. CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 96/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 7-8 784/Del/2017 for AY: 2009-10 and C.O.No.20/Del/20 22 ACIT, Central Circle-8, New Dehi M/s. Span Holding Pvt. Ltd. CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 97/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 9-10 785/Del/2017 for AY: 2010-11 and C.O.No.21/Del/20 22 ACIT, Central Circle-8, New Dehi M/s. Span Holding Pvt. Ltd. CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 63/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 11-12 786/Del/2017 for AY: 2011-12 AndC.O.No.22/De l/2017 ACIT, Central Circle-8, New Dehi M/s. Span Holding Pvt. Ltd. CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 64/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 13-14 787/Del/2017 for AY: 2013-14 and C.O.No.24/Del/20 22 ACIT, Central Circle-8, New Dehi M/s. Span Holding Pvt. Ltd. CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 66/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 15-16 793/Del/2017 for AY: 2012-13 andC.O.No.23/Del /2022 ACIT, Central Circle-8, New Dehi M/s. Span Holding Pvt. Ltd. CIT(A)-24, New Delhi’s order dated 23.11.2016 passed in case no. 65/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 2. Heard both the parties at length. Case files perused. ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 4 | P a g e 3. It emerges during the course of hearing with the able assistance coming from both the parties, and more particularly, the Revenue’s side that it’s three appeals ITA Nos. 786, 793 &787/Del/2017 for assessment years 2011-12; 2012-13 & 2013- 14 involved tax effect of Rs.49,82,180/-; 57,22,778/- and 44,23,311/-, respectively which are less than the minimum tax effect Rs.60 lakhs as prescribed in CBDT’s latest circular 9/2024, dated 17.09.2024 made applicable to all pending appeals as well. We accordingly dismiss the Revenue’s instant appeals ITA Nos.786, 793 & 787/Del/2017for this precise reason subject to all just exceptions. 4. Learned counsel representing assessee is equally fair in not pressing for its cross objections C.O. Nos. 22 to 24/Del/2022, case-wise, respectively. Rejected accordingly. 5. We now proceed to deal with the remaining ten cases i.e. assessee’s ITA Nos.455 & 379/Del/2017& cross objection C.O. Nos. 18 to 21/Del/2017; Revenue’s appeals ITA No. 782 to 785/Del/2017. 6. Mr. Rastogi refers to the assessee’s identical legal grounds raised in all these cases that the corresponding assessment ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 5 | P a g e herein are not sustainable in law since no addition therein has been made based on incriminating material, which forms a condition precedent as per hon’ble apex court recent landmark decision in PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC). 7. Learned CIT(DR), on the other hand, vehemently objects to the assessee’s instant additional ground that such a recourse could not be allowed to be taken at this belated stage wherein all the relevant facts do not form part of the records. We find no merit in the Revenue’s foregoing technical ground once the assessee’s foregoing legal arguments sought to be canvassed by way of an additional ground go to root of the matter and all the relevant facts are already on record. We thus quote NTPC Vs. CIT (1998), 229 ITR 383 (SC) that this tribunal could indeed admit any such legal ground going to the root of the matter for the purpose of determining correct tax liability of a taxpayer provided all relevant facts form part of the records. We accordingly admit the assessee’s foregoing additional grounds/arguments in very terms. ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 6 | P a g e 8. Next comes our adjudication reversing the foregoing issue of the validity of the impugned reassessments in light of Abhisar Buildwell Pvt. Ltd. (supra). We are informed that the search herein took place in assessee’s or its group cases on 16.01.2013. Learned CIT(DR)states that there was a yet another similar search action on the very date against M/s. U.K. Paints as well. Ms. Chaudhary’s case accordingly is that the impugned additions made in assessee’s hands are in fact based on the incriminating materials found in the said latter party’s search which to be upheld. 9. We find no substance in the Revenue’s foregoing legal arguments once it has come on record that learned departmental authorities have not made any addition in assessee’s hands based on any seized material in its own search going by Abhisar Buildwell Pvt. Ltd. (supra). We further deem it to clarify that all these are unabated assessments only as on the date of search. We accordingly accept the assessee’s instant legal ground in all these assessment years in very terms. The impugned assessments herein stand quashed therefore. ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 7 | P a g e 10. All other pleadings on merits herein have been rendered academic. 11. This leaves us with the assessee’s remaining appeal ITA No. 379/Del/2017 wherein it challenges correctness of both the learned lower authorities action making section 14A disallowance of Rs.4,20,703/- relating to it’s exempt income amounting to Rs. 42,03,634/-. We further note that it has also sought to raise an additional ground challenging validity of the impugned assessment itself for want of the prescribed section 153D approval. 12. We wish to make it clear first of all the impugned assessment year 2013-14 involves regular assessment as the date of search herein 28.01.2013 and therefore, the foregoing “unabated” assessment law would not apply herein. This is indeed coupled with the fact that the assessee has also raised the very section 153D approval of substantive ground in it’s corresponding cross objection (supra) wherein it never pressed the same as the Revenue’s appeal was dismissed for involving low tax effect (supra). We thus reject the assessee’s instant additional ground in ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 8 | P a g e very terms so as to avoid mutual conflict in our findings in very terms. 13. Coming to merits of the impugned section 14A disallowance, learned counsel could hardly pinpoint any illegality or infirmity therein as the Assessing Officer had adopted the correct figures for the purpose of computing Rule 8D disallowance involving three limbs of direct, proportionate interest, administrative expenditure, respectively. The assessee fails in its instant sole substantive ground on merits. So is the outcome of main appeal ITA No. 379/Del/2017. 14. To sum up, our decision in assessee’s appeals and Revenue’s appeals istabulated as under: Sl. No. Appeal/cross objection no. Appellant Respondent Result 1. ITA No.786/Del/2017 ACIT M/s. Span Holdings Pvt. Ltd. Dismissed 2. ITA No.793/Del/2017 ACIT M/s. Span Holdings. Pvt. Ltd. Dismissed 3. ITA No.787/Del/2017 ACIT M/s. Span Holdings. Pvt. Ltd. Dismissed 4. C.O. No.22/Del/2022 M/s. Span Holdings. Pvt. Ltd. ACIT Rejected as not pressed 5. C.O. No. 23/Del/2022 M/s. Span Holdings. Pvt. Ltd. ACIT Rejected as not pressed 6. C.O. No. 24/Del/2022 M/s. Span Holdings Pvt. Ltd. ACIT Rejected as pressed 7. ITA No. 782/Del/2017 ACIT M/s. Span Holdings Pvt. Ltd. Dismissed 8. ITA No.783/Del/2017 ACIT M/s. Span Holdings Pvt. Ltd. Dismissed 9. ITA No.784/Del/2017 ACIT M/s. Span Holding Pvt. Ltd. Dismissed ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 9 | P a g e 10 ITA No.785/Del/2017 ACIT M/s. Span Holding Pvt. Ltd. Dismissed 11. ITA No. 455/Del/2017 M/s.Span Holding Pvt. Ltd. ACIT Allowed 12. ITA No. 379/Del/2017 M/s.Span Holding Pvt. Ltd. ACIT Dismissed 13. C.O. No. 18/Del/2022 M/s.Span Holding Pvt. Ltd. ACIT Allowed 14 C.O. No.19/Del/2022 M/s. Span Holding Pvt. Ltd. ACIT Allowed 15. C.O. No.20/Del/2022 M/s. Span Holding Pvt. Ltd. ACIT Allowed 16. C.O. No.21/Del/2022 M/s. Span Holding Pvt. Ltd. ACIT Allowed 15. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 27th December, 2024 Sd/- Sd/- (AVDHESH KUMAR MISHRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27th December, 2024. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "