Deputy Commissoner of Income Tax, Ludhiana V. M/S Vardhman Special Steels Limited, Ludhiana

MA 113/CHANDI/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7052 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 12-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GEETINDER MAANSR
• Keywords: Proportionate interest
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER M.A. NO. 113/CHD/2018 (IN ITA NO. 574/CHD/2017) ASSESSMENT YEAR: 2012-13 THE DCIT, VS. M/S VARDHMAN SPECIAL STEELS LIMITED , CIRCLE-1, CHANDIGARH ROAD, LUDHIANA LUDHIANA PAN NO. AADCV4812B (APPELLANT) (RESPONDENT) APPELLANT BY : MS.GEETINDER MAAN,SR.DR RESPONDENT BY : SH. YOGESH KUMAR DATE OF HEARING : 03.08.2018 DATE OF PRONOUNCEMENT : 21. 08.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT MISC. APPLICATION DATED 3.4.2018 HAS BE EN MOVED BY THE DEPARTMENT PLEADING THEREIN THAT A MISTAKE APPARENT ON RECORD HAS CREPT IN THE ORDER OF THE TRIBUNAL DATED 11.12.2017. IT HAS BEEN FURTHER PLEADED BY THE REVENUE THAT WHILE FILING OF THE APPEAL, THE DE PARTMENT HAS WRONGLY ATTACHED THE GROUNDS OF APPEAL IN THE CASE OF ANO THER ASSESSEE NAMELY M/S SHRREYANS INDUSTRIES LTD, LUDHIANA INSTEAD OF GROUN DS OF APPEAL TO BE TAKEN IN THE CASE OF THE ASSESSEE I.E. M/S VARDHMAN SPECIAL STEELS LTD LUDHIANA. IT HAS BEEN PLEADED THAT LATER ON, THE MO DIFIED GROUNDS OF APPEAL WERE SENT TO THE REGISTRY VIDE THEIR OFFICE LETTER DATED 17.8.2017, HOWEVER, 2 M.A. NO. 113/CHD/2018 IN ITA 574/CHD/2017- VARDHMAN SPECIAL STEELPS LTD., LUDHIANA THIS TRIBUNAL VIDE ORDER DATED 11.12.2017 HAS DISMI SSED THE APPEAL OF THE DEPARTMENT CONSIDERING THE WRONGLY TAKEN GROUNDS OF APPEAL. IT HAS, THEREFORE, BEEN PRAYED THAT THE ORDER OF THE TRIBUN AL DATED 11.12.2017 BE RECALLED AND THE MATTER BE RE-ADJUDICATED. 2. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE LD. DR IN THIS RESPECT. THOUGH THE CONTENTION OF THE REVENUE APPE ARS TO BE CORRECT TO THE EXTENT THAT THE GROUNDS OF APPEAL THAT HAVE BEEN R EPRODUCED IN THE ORDER OF THE TRIBUNAL ARE, AS HAVE BEEN WRONGLY TAKEN BY THE REVENUE, WHICH WERE RELATABLE TO THE ANOTHER ASSESSEE IN THE CASE M/S S HREYANS INDUSTRIES LTD, LUDHIANA. HOWEVER, IT IS ALSO A MATTER OF FACT THAT THE ISSUE INVOLVED IN THE CASE OF THE ASSESSEE I.E. RELATING TO THE DISALLOW ANCE U/S 14A OF THE ACT AND DISALLOWANCE U/S 36 (I)(III) OF THE ACT WERE A LMOST IDENTICAL AS WERE TAKEN BY THE REVENUE IN THE CASE OF THE PRESENT AS SESSEE. FURTHER, A PERUSAL OF THE ORDER DATED 11.12.2017 REVEALS THAT THE TRIBUNAL DEALT WITH THE VALIDITY OF THE QUANTUM ADDITIONS MADE ON THE ISSUE TAKEN IN THE APPEAL AND HAS DELIBERATED AND DISCUSSED THE IMP UGNED ORDER OF THE CIT(A) IN THE CASE OF THE ASSESSEE AND FOUND NO I NFIRMITY IN THE ORDER OF THE CIT(A). 3. THE LD. DR HAS ALSO FAIRLY ADMITTED THAT EXCEPT THE REPRODUCTION OF THE GROUNDS OF APPEAL IN THE CASE OF M/S SHREYANS I NDUSTRIES LTD., LUDHIANA, WHICH MISTAKE OTHERWISE WAS NOT ATTRIBUTE D TO THE TRIBUNAL BUT DUE TO THE MISTAKE ON THE PART OF THE REVENUE , OTHERWISE THE ORDER OF THE TRIBUNAL, ON MERITS, IS RELATABLE TO THE CASE OF THE ASSESSEE AND ALL THE ISSUES HAVE BEEN APPROPRIATELY ADDRESSED AFTER CONS IDERING THE FINDINGS OF THE CIT(A) IN THE CASE OF ASSESSEE ITSELF. 3 M.A. NO. 113/CHD/2018 IN ITA 574/CHD/2017- VARDHMAN SPECIAL STEELPS LTD., LUDHIANA 4. IN VIEW OF THIS, THE ONLY ERROR IN THIS ORDER IS RELATING THE REPRODUCTION OF THE GROUNDS. WE ACCORDINGLY DIRECT THAT THE GROUNDS OF APPEAL AS REPRODUCED IN THE IMPUGNED ORDER BE SUBST ITUTED WITH THE GROUNDS OF APPEAL BY THE REVENUE IN THE CASE OF ASSESSEE. 5. WE, THEREFORE, ORDER THAT THE GROUNDS REPRODUCED IN PARA 2 OF THE IMPUGNED ORDER OF THE TRIBUNAL DATED 11.12.2017, BE SUBSTITUTED WITH THE FOLLOWING GROUNDS :- 2. THE REVENUE HAS TAKEN FOLLOWING EFFECTIVE GROUND S OF APPEAL :- 1. WHETHER UPON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE MADE U/S 14A OF THE I.T. ACT, 1961, AMOUNTING TO RS. 1,55,34,237/-? 2. WHETHER UPON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE U/S 36(I)(III) OF THE I.T. ACT, 1961, DISALLOWED PROPORTIONATE INTEREST FOR MADE INVESTMENT IN SHARES / SECURITIES, AMOUNTING TO RS. 2,25,40,000/- WITHOUT CONSIDERING THAT BORROWED FUNDS ARE MORE THAN OWN FUNDS? 3. WHETHER UPON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE U/S 36(I)(III) OF THE I.T. ACT, 1961, AMOUNTING TO RS. 4,21,911/- - WITHOUT CONSIDERING THAT BORROWED FUNDS ARE MORE THAN OWN FUNDS? 4. THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AN D THAT OF THE ASSESSING OFFICER BE RESTORED. HOWEVER, THE REST OF THE FINDINGS OF THE TRIBUNAL O N THE ISSUES WILL REMAIN AS SUCH. 4 M.A. NO. 113/CHD/2018 IN ITA 574/CHD/2017- VARDHMAN SPECIAL STEELPS LTD., LUDHIANA 6. A SEPARATE CORRIGENDUM TO THE ORDER DATED 11.12. 2017 BE ISSUED IN THIS RESPECT. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21.08.2018 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR