Saurashtra Cement Ltd., PORBANDAR V. The Dy. Commr. of Income Tax, Cir.-2, JAMNAGAR

MA 11/RJT/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2984 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-07-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 11-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 14A

Judgement Text

M.A.No.11/RJT/2020 Assessment Year 2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted through E-Court at Ahmedabad) BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER M.A. No.11/RJT/2020 (In C.O. No.6/RJT/2017) Assessment Year: 2013-14 Saurashtra Cement Limited, vs. D.C.I.T., Circle – 2, Mr. Railway Station, Jamnagar. Ranavav, Porbandar. [PAN – AAHFS 5211 J] (Appellant) (Respondent) Appellant by : Shri Vimal Desai, Ld. AR Respondent by : Shri B.D. Gupta, Ld. Sr. D.R. Date of hearing : 29.07.2022 Date of pronouncement : 31.08.2022 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This Miscellaneous Application is filed by the assessee in respect of order dated 06.08.2019 passed by the Tribunal. 2. The Ld. AR submitted that for the year under consideration, the assessee had earned the dividend income for Rs. 25,643 and had made suo moto disallowance u/s 14A of the Act for Rs. 1,20,000/-. The Assessing Officer made the addition for Rs. 97,55,639 u/s 14A of the Act while passing the assessment order u/s 143(3) of the Act for the relevant year. The CIT(A) reduced the addition to Rs. 8,20,000/- as against the addition of Rs. 97,55,639 made by the Assessing Officer. Against the order of the CIT(A), the assessee as well as the Revenue were in appeal raising following grounds: Revenue’s Ground (ITA No. 71/Rajkot/2017) The learned CIT(A) erred on facts and in law in restricting the disallowance made u/s 14A of the Act at Rs. 8,20,000 as against Rs. 97,55,639. M.A.No.11/RJT/2020 Assessment Year 2013-14 2 Assessee’s Ground (C.O. No. 6/RJT/2017) 1. The learned Assessing Officer has erred in law as well as on facts in making the disallowance u/s 14A of Rs. 97,55,639. The CIT(A) has erred in confirming the same to the extent of Rs. 8,20,000. 2. The learned Assessing Officer has erred in law as well as on facts in making the disallowance of depreciation of Rs. 4,335 claimed on the electricity line. The CIT(A) has erred in confirming the same. 3. The learned Assessing Officer has erred in law as well as on facts in making the disallowance of Mumbai Guest House Maintenance Charges of Rs. 5,99,000. The CIT(A) has erred in confirming the same. The Ld. AR submitted that the Revenue’s ground with respect to disallowance u/s 14A raised by the Revenue was adjudicated by the Tribunal vide para 5-7 of the order. 4. The Ld. AR submitted that the Tribunal adjudicated the Cross Objection filed by the assesse stating therein that the learned AR does not wish to press the C.O., hence, the same is dismissed as not pressed. The Ld. AR submitted that the learned AR did not press only ground No. 2 and ground No. 3 of the CO and not all 3 grounds as mentioned in the order. The Ld. AR further submitted that Ground No. 1 is cross and corresponding ground to the department’s ground for disallowance u/s 14A. In view of the fact that department appeal is dismissed on the ground that disallowance u/s 14A should not be more than the exempt income, the assessee’s ground for confirming the disallowance u/s 14A by the CIT(A) to the extent of Rs. 8,20,000 should be adjudicated. Therefore, the Ld. AR submitted that there is mistake apparent from record, and prayed to rectify the same and to give a suitable direction to the Assessing Officer in the interest of justice by suitably modifying the order dated 06.08.2019 by directing to restrict the disallowance u/s 14A of the Act to Rs. 1,20,000/-. 5. The Ld. DR relied upon the order of the Tribunal and submitted that the Cross objection was not pressed at the time of hearing, therefore, there is no need to M.A.No.11/RJT/2020 Assessment Year 2013-14 3 adjudicate Ground No. 1 of the C.O. of assessee. The Ld. DR submitted that there is no mistake apparent from record. 6. We have heard both the parties and perused all the relevant material available on record. The Tribunal vide order dated 06.08.2019 decided the appeal of the Revenue in respect of disallowance u/s 14A and has observed that the disallowance should not be more than the exempt income. There is further observation of the Tribunal that dividend income of the assesse is only 25,643/- whereas assessee made suo moto disallowance u/s 14A to the tune of Rs. 1,20,000/-. It appears that the assessee contested the Ground No. 1 of the Cross Objection in connection with the revenue’s appeal as it has same issue involved. Therefore, there is mistake apparent from record in order dated 06.08.2019 and therefore we modify paras 7 and 8 of the order dated 06.08.2019 as under: “7. The Ld. AR does not wish to press Ground No. 2 and 3 of the Cross objection. Hence, Ground No. 2 and 3 are dismissed as not pressed. As regards to Ground No. 1 of Cross Objection, the same is in connection with Revenue’s Ground and the observation made therein will be applicable and it appears that the CIT(A) has made disallowance more than the exempt income u/s 14A of the Act. Therefore, we direct the Assessing Officer to verify the same in consonance with the suo moto disallowance made by the assesse and accordingly made disallowance u/s 14A of the Act. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Ground No. 1 of C.O. is partly allowed for statistical purpose. 8. In the result, appeal filed by the Revenue is dismissed and C.O. filed by the assessee is partly allowed for statistical purpose.” Thus, Miscellaneous Application filed by the assesses is allowed. 7. In result, Miscellaneous Application filed by the assesses is allowed. Order pronounced in the open Court on this 31 st day of August, 2022. Sd/- Sd/- (ANNAPURNA GUPTA) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 31 st day of August, 2022 PBN/* M.A.No.11/RJT/2020 Assessment Year 2013-14 4 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Rajkot Bench, Rajkot