Income Tax Officer Ward-4(1)(1), Bangalore V. M/s J J Glastronics Pvt Ltd , Bangalore

MA 142/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7805 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 28-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Assessee Lawyers: SHREEHARI KUTSA
• Keywords: Rectification of order
• Section: 143(3); 14A; 115JB; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BENCH: BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER M P NO.142/BANG/2019 (IN ITA NO. 1518 /BANG/2018 ) (ASSESSMENT YEAR: 201 3 - 14 ) INCOME TAX OFFICER, WARD 4(1)(1), BANGALORE. .APPELLANT VS. M/S. J J GLASTRONICS PVT. LTD. , 26 - B, ELECTRONICS CITY, HOSUR ROAD, BANGALORE - 560 100 . RESPONDENT. PAN AAACJ 4330P ASSESSEE BY: SHRI SHREEHARI KUTSA, C.A. REVENUE BY: SHRI MANJEET SINGH, ADDL. CIT (D.R) DATE OF HEARING : 20.12 .20 19 DATE OF PRONOUNCEMENT : 22 .01 .20 20 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE REVENUE HAS FILED MISC. PETITION IN ITA NO.1518/BANG/20 18 DT.10.04.2019 FOR RECTIFICATION OF ORDER OF THE TRIBUNAL : 2 M.P. NO. 142/BANG/2019 2. AT THE TIME OF HEARING, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE TRIBUNAL H AS NOT CONSIDERED THE CO - ORDINATE BENCH DECISION OF THE TRIBUNAL . WHEREAS THE TRIBUNAL HAS RELIED O N THE DECISION OF SPECIAL BENCH IN THE CASE OF ACIT VS. VIREET INVESTMENT PVT. LTD. (2017) 58 ITR (TRIB) 313 (ITAT - DEL) IN RESPECT OF DISALLOWANCE UNDER SE CTION 14A OF THE INCOME TAX ACT, 1961 ('THE ACT') AND ADDITION IN COMPUTING THE BOOK PROFITS U/SEC115JB OF THE ACT. WE CONSIDER IT APPROPRIATE TO HIGHLIGHT THE OBSERVATIONS OF HONBLE TRIBUNAL AT PAGE 3 PARA 6 OF THE ORDER WHICH IS READ AS UNDER : 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE SOLE DISPUTED ISSUE IS IN RESPECT OF DISALLOWANCE U/S 14A FOR DETERMINING THE BOOK PROFITS U/S 115JB. THE ASSESSING OFFICER HAS COMPLETED ASSESSMENT U/S 143(3) AND S UBSEQUENTLY WAS OF THE 3 M.P. NO. 142/BANG/2019 OPINION THAT IN DETERMINING THE BOOK PROFITS DISALLOWANCE U/S 14A WAS EXCLUDED. THEREFORE, ISSUED NOTICE AND PASSED THE ORDER. WE FOUND THAT THE LD AR HAS SUBSTANTIATED HIS CLAIM WITH THE JUDICIAL DECISIONS AND THE COORDINATE BENCH DECISION IN CALCULATING THE DISALLOWANCE U/S 14A AND RELIED UPON [2017] 58 ITR (TRIB) 313 (ITAT [DEL]) IN THE CASE OF ACIT VS. VIREET INVESTMENT PVT LTD IN RESPECT OF THE DISALLOWANCE AT PARA 6 WHICH IS AS UNDER: 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. THERE CANNOT BE ANY QUARREL WITH THE SUBMISSIONS OF LD. SR. COUNSEL FOR THE ASSESSEE THAT SECTION 115JB IS A COMPLETE CODE IN ITSELF. CHAPTER XII - B PROVIDES ALTERNATE SCHEME FOR COMPUTING TAX LIABI LITY OF CERTAIN COMPANIES, WHOSE TOTAL INCOME UNDER NORMAL PROVISIONS IS BELOW THE THRESHOLD BOOK PROFITS AS PRESCRIBED UNDER CHAPTER XII - B. UNDER SECTION 115JB THIS THRESHOLD LIMIT IS 18.5%. THUS, TOTAL INCOME AS COMPUTED UNDER THE NORMAL PROVISIONS OF TH E ACT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL 2012, IS LESS THAN 18.5% OF ITS BOOK PROFITS , SUCH BOOK PROFITS SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND TAX SHALL BE PAYABLE ON SUCH TOTAL INCOME @18.5%. THUS, THE SCHEME OF THE ACT IS THAT THE COMPUTATION IS FIRST MADE UNDER THE NORMAL PROVISIONS OF INCOME - TAX ACT AND, THEREAFTER, UNDER AN ALTERNAT E SCHEME PROVIDED U/S 115JB FOR COMPUTING TOTAL INCOME AS PER THE PRESCRIBED METHOD. IF THE TAX LIABILITY ON THE BASIS OF TOTAL INCOME AS PER MAT PROVISIONS IS MORE THAN THE TAX COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT, THEN THE FORMER BECOMES THE F INAL TAX LIABILITY OF THE ASSESSEE. THE MODE OF COMPUTATION OF BOOK PROFITS HAS BEEN PRESCRIBED UNDER MAT PROVISIONS. THE ISSUE POSED FOR OUR CONSIDERATION IS WHETHER COMPUTATION PROVISIONS PRESCRIBED FOR COMPUTATION OF TOTAL INCOME UNDER NORMAL PROVISIONS WITH REFERENCE TO SECTION 14A CAN OR CANNOT BE TAKEN INTO CONSIDERATION WHILE COMPUTING BOOK PROFITS S UNDER MAT PROVISIONS. THOUGH THE REVENUE HAS RAISED THE OBJECTION S, WE FOUND THE SPECIAL BENCH DECISI ON IN THE CASE OF ACIT VS. VIREE T INVESTMENTS PV T. LTD. (SUPRA) IS SUPERIOR AND TR IBUNAL WAS CORRECT IN ACCEPTING THE VIEW , AND GRANTED THE RELIEF TO THE ASSESSEE. HENCE WE FOUND NO MERITS IN THE MISC. PETITION FILED BY THE REVENUE AND THE MISC. PETITION IS DISMISSED. 3. IN THE RESULT, THE MISC. PETITION OF REVENUE IS DISMISSED. 4 M.P. NO. 142/BANG/2019 PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE . (A.K. GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 2 .01. 20 20 . *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE