ACC LIMITED(FORMERLY KNOWN AS THE ASSOCIATED CEMENT CO.LTD., V. ADDL CIT 1(1),

MA 110/MUM/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3657 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: H
• Assessment Year: 2001-2002
• Appeal Filed On: 13-05-2015
• Court: TRIBUNAL
• Department Lawyers: BASANT KASAT; ALPESH T DHARAD
• Keywords: Opportunity of being heard; Retrospective amendment
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER M.A. NO.110/MUM/2015 ( ARISING OUT OF ITA NO.4240/MUM/2007) / ASSESSMENT YEAR: 2001-02 ACC LIMITED,(FORMERLY KNOWN AS THE ASSOCIATED CEMENT COMPANIES LTD.) CEMENT HOUSE, 121, M.K.ROAD, MUMBAI VS. ADDIT IONAL COMMISSIONER OF INCOME-TAX, RANGE-1(1), MUMBAI ( ! /ASSESSEE) ( ' /REVENUE) P.A. NUMBER : AAACT1507C M.A. NO.111/MUM/2015 ( ARISING OUT OF ITA NO.4562/MUM/2007 / ASSESSMENT YEAR: 2001-02 ACC LIMITED,(FORMERLY KNOWN AS THE ASSOCIATED CEMENT COMPANIES LTD.) CEMENT HOUSE, 121, M.K.ROAD, MUMBAI VS. ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE-1(1), MUMBAI ( ! /ASSESSEE) ( ' /REVENUE) P.A. NUMBER : AAACT1507C 2 M.A. NO.110 & 111/MUM/2015 ACC LIMITED . *+,- /DEPARTMENT BY : SHRI BASANT KASAT & SHRI ALPESH T. DHARAD ./,- /ASSESSEE BY : SHRI O.P. MEENA-DR 0 1 ! 2 / DATE OF HEARING : 20/11 /201 5 1 ! 2 / DATE OF ORDER: 03 /12 /2015 O R D E R PER JOGINDER SINGH: JUDICIAL MEMBER BOTH THESE MISCELLANEOUS APPLICATIONS ARE FILED BY THE ASSESSEE AGAINST THE TRIBUNAL ORDER DATED 31/10/201 4. FIRST, WE SHALL TAKE UP M.A. NO.110/MUM/2015, WHEREIN, THE GR IEVANCE OF THE ASSESSEE IS WITH RESPECT TO FACTS RECORDED IN P ARA 4.1 OF THE ORDER OF THE TRIBUNAL, WHICH IS REPRODUCED HEREUNDE R FOR READY REFERENCE:- 4.1 FACTS IN BRIEF ARE THAT THE ASSESSEE HAD DEDUC TED AN AMOUNT OF RS.74,74,754/- BEING DIVIDEND EXEMPT U/S. 10(33) OF THE ACT. IN THE COMPUTATION OF INCOME U/S. 115JB, THE ASSESSEE HAS REDUCED THE ABOVE AMOUNT FOR COMPUTING ITS PROF ITS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE W AS ASKED AS TO WHY THE ABOVE SAID AMOUNT SHOULD NOT BE DISAL LOWED U/S. 14A OF THE ACT. THE ASSESSEE VIDE ITS LETTER DATED 22/1/2004 STATED THAT THE COMPANY HAS NOT INCURRED EXPENDITUR E FOR THE PURPOSE OF EARNING OF ANY INCOME, WHICH IS EXEMPT U NDER THE ACT AND HENCE, PROVISION OF SECTION 14A WILL NOT BE APP LICABLE IN THE CASE OF THE ASSESSEE. HOWEVER, THIS CLAIM WAS NOT F OUND ACCEPTABLE BY THE AO. ACCORDING TO THE AO THE SAID SECTION CAME WITH RETROSPECTIVE EFFECT FROM 1.4.1962 BY THE FINA NCE ACT, 2001, AND CLEARLY LAYS DOWN THAT FOR THE PURPOSE OF COMPU TATION OF TOTAL INCOME NO DEDUCTION SHALL BE ALLOWED IN RESPE CT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH 3 M.A. NO.110 & 111/MUM/2015 ACC LIMITED . HAS NOT FORMED PART OF TOTAL INCOME. CONSEQUENT TO THE INSERTION OF ABOVE PROVISION, EXPENSES INCURRED TOWARDS EXEMP T INCOME ARE LIABLE FOR DISALLOWANCE UNDER THE ABOVE SECTION AND WHERE EXPENSES ARE NOT ASCERTAINABLE, THE SAME HAVE TO BE DETERMINED AND ALLOCATED TOWARDS THE SAID INCOME FOR DISALLOWA NCE. AS THE ASSESSEE DID NOT PROVIDE THE DETAILS ABOUT THE INTE REST AMOUNT REFERABLE TO INVESTMENT IN TAX FREE BONDS ETC., THE RE IS NO OPTION BUT TO MAKE PROPORTIONATE ALLOCATION . THE AO FOLLO WING THE EARLIER ORDERS FOR ASSESSMENT YEARS 1999-2000 AND 2 000-01 DISALLOWED A SUM OF RS.31,17,643/- OUT OF TOTAL INT EREST EXPENSES ON PROPORTIONATE BASIS AS EXPENDITURE ALLE GED TO BE INCURRED FOR EARNING DIVIDEND INCOME. THE LD. CIT(A ) FOLLOWED THE ORDER OF HIS PREDECESSOR AND ALLOWED THE GROUND OF THE ASSESSEE. KEEPING IN VIEW THE TOTALITY OF FACTS AN D THE CIRCUMSTANCES THE LD. ASSESSING OFFICER IS DIRECTED TO RE-COMPUTE AS PER THE DECISION OF THE HON'BLE SUPREME COURT IN AJANTA PHARMA LTD. VS. CIT (2010) 327 ITR 305 AND DECIDE A FRESH FOR WHICH DUE OPPORTUNITY OF BEING HEARD TO BE PROVIDED TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PU RPOSES. 2. DURING HEARING OF THIS APPLICATION, THE LD. COUN SEL DREW OUR ATTENTION TO AFORESAID PARA BY CONTENDING THAT THE FACTS HAS NOT BEEN PROPERLY RECORDED, HOWEVER, WE FOUND THIS GROU ND HAS BEEN SENT TO THE FILE OF THE LD. ASSESSING OFFICER AND A LLOWED FOR STATISTICAL PURPOSES. THE ASSESSEE IS AT LIBERTY TO STATE THE F ACTS BEFORE THE LD. ASSESSING OFFICER, WHO WILL EXAMINE THE FACTS FIRST AND THEN DECIDE IN ACCORDANCE WITH LAW. IT IS DIRECTED ACCORDINGLY . 3. SO FAR AS, M.A. NO.111/MUM/2015 IS CONCERNED, TH E LD. COUNSEL FOR THE ASSESSEE WANTED TO WITHDRAW THE APP LICATION, THEREFORE, THIS MISCELLANEOUS APPLICATION IS DISMIS SED AS WITHDRAWN. 4 M.A. NO.110 & 111/MUM/2015 ACC LIMITED . FINALLY, M.A. NO.110/MUM/2015 IS DISPOSED OFF IN TE RMS INDICATED HEREINABOVE AND M.A. NO.111/MUM/2015 IS D ISMISSED AS WITHDRAWN. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLU SION OF THE HEARING ON 20/11/2015 SD/- SD/- ( N.K.BILLAIYA ) (JOGINDER SINGH) # $ / ACCOUNTANT MEMBER $ / JUDICIAL MEMBER 0 MUMBAI; : DATED : 03/12/2015 F{X~{T? P.S/. .. %&'( ) (& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. N N O! ( *+ ) / THE CIT, MUMBAI. 4. N N O! / CIT(A) - 13, MUMBAI 5. UVW .!X , N *+2 *X Y , 0 / DR, ITAT, MUMBAI 6. W[ \0 / GUARD FILE. / BY ORDER, /U+! .! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , 0 / ITAT, MUMBAI.