Shriram Capital Ltd., CHENNAI V. DCIT, CHENNAI

MA 233/CHNY/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 5067 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-12-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: R SIVARAMAN
• Section: 14A; 115JB; 194C; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.A. NOS. 231 & 232/MDS/2016 [IN I.T.A. NOS. 729 & 730/MDS/2016] / ASSESSMENT YEARS : 2012-13 & 2009-10 & M.A. NO. 233/MDS/2016 [IN I.T.A. NO. 326/MDS/2016 ] / ASSESSMENT YEAR : 2012-13 M/S. SHRIRAM CAPITAL LIMITED, MOOKAMBIKA COMPLEX, NO.4, LADY DESIKA ROAD, MYLAPORE, CHENNAI 600 004. PAN: AABCS2726B V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6 (1), CHENNAI. (APPLICANT) ( /RESPONDENT) APPLICANT BY : SHRI R. SIVARAMAN, ADVOCATE RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT /DATE OF HEARING : 30.12.2016 /DATE OF PRONOUNCEMENT : 30.12.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : SHRI R. SIVARAMAN, THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT FOR THE ASSESSMENT YEAR 2009-10, THE ORDER OF THE ASSESSING OFFICER WAS REVISED BY THE COMMISSIONER U NDER SECTION 2 M.A. NO. 231 & 233/MDS/2016 M.A. NO. 232/MDS/2016 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ), IN RESPECT OF DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE AC T. THE ASSESSEE CHALLENGED THE ORDER OF THE COMMISSIONER B EFORE THIS TRIBUNAL. THIS TRIBUNAL BY AN ORDER DATED 05.08.2 016 SET ASIDE THE ORDER OF THE COMMISSIONER AND RESTORED THAT OF THE ASSESSING OFFICER. THE PRESENT APPEAL HAS ARISEN OUT OF THE CONSEQUENT ORDER PASSED BY THE ASSESSING OFFICER IN PURSUANCE TO ORD ER OF THE COMMISSIONER UNDER SECTION 263 OF THE ACT. SINCE THE ORDER OF THE COMMISSIONER WAS SET ASIDE BY THIS TRIBUNAL, THE CO NSEQUENT ORDER CANNOT STAND IN THE EYE OF LAW. THEREFORE, THERE WAS AN ERROR IN THE ORDER OF THIS TRIBUNAL. 2. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT NO DOUBT, THE DISALLO WANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF TH E ACT WAS REVISED BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT WH ICH WAS SUBJECT MATTER OF APPEAL BEFORE THIS TRIBUNAL. TH IS TRIBUNAL SET ASIDE THE ORDER OF THE COMMISSIONER. HOWEVER, AN A PPEAL WAS FILED BEFORE THE HIGH COURT AND THE SAME IS PENDING. HE NCE, THIS TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL BY THE REVE NUE. 3 M.A. NO. 231 & 233/MDS/2016 M.A. NO. 232/MDS/2016 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTE DLY, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 40(A)(IA) OF THE ACT, FOR THE ASSESSMENT YEAR 2009-10 WAS SUB JECT MATTER OF REVISION BY THE COMMISSIONER UNDER SECTION 263 OF T HE ACT. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE CHALLENGED TH E ORDER OF THE COMMISSIONER BEFORE THIS TRIBUNAL BY WAY OF AN APPE AL. WHILE ADJUDICATING THE APPEAL, THIS TRIBUNAL FOUND THAT C IT (APPEALS) IS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO RED O THE ASSESSMENT. ACCORDINGLY, THE ORDER OF THE CIT (APPEALS) WAS SET ASIDE. 4. THE PRESENT APPEAL IS ARISEN OUT OF THE ORDER PA SSED BY THE ASSESSING OFFICER CONSEQUENT TO THE DIRECTION OF TH E COMMISSIONER. SINCE THE DIRECTION OF THE COMMISSIONER WAS SET ASI DE BY THIS TRIBUNAL BY AN ORDER DATED 05.08.2016, THIS TRIBUNA L IS OF THE CONSIDERABLE OPINION THAT THE CONSEQUENT ORDER PASS ED BY THE ASSESSING OFFICER CANNOT STAND IN THE EYE OF LAW. MERE PENDENCY OF THE APPEAL BEFORE THE HIGH COURT CANNOT BE A REA SON FOR THE ASSESSING OFFICER TO PASS THE CONSEQUENTIAL ORDER. THE MATTER WOULD STAND DIFFERENTLY IF THE HIGH COURT REVERSES THE ORDER OF THE TRIBUNAL. AS ON TODAY THE APPEAL IS SAID TO BE PE NDING BEFORE THE 4 M.A. NO. 231 & 233/MDS/2016 M.A. NO. 232/MDS/2016 HIGH COURT. THEREFORE, THE CONSEQUENTIAL ORDER PAS SED BY THE ASSESSING OFFICER CANNOT STAND. TO THAT EXTENT, TH ERE IS AN ERROR IN THE ORDER OF THIS TRIBUNAL. ACCORDINGLY, IT NEEDS TO BE RECTIFIED. ACCORDINGLY THE ORDER OF THIS TRIBUNAL DATED 05.08. 2015 IS HEREBY RECTIFIED. 5. AT PAGE 7, PARA 11,12,13,14,16 & 18 ARE DELETED. THE FOLLOWING SHALL BE INSERTED AS PARA 11. AFTER HEARING THE LD. REPRESENTATIVE FOR THE REVEN UE AND THE ASSESSEE, THIS TRIBUNAL FOUND THAT THE ISSUE OF NON -DEDUCTION OF TAX AS REQUIRED UNDER SECTION 194C OF THE ACT WAS EXAMINED BY THIS TRIBUNAL IN ITA 724/MDS/2014 DATED 02.01.2015. IN FACT, THIS TR IBUNAL HAS SET ASIDE THE ORDER OF THE COMMISSIONER. THEREFORE THE CONS EQUENTIAL ORDER PASSED BY THE ASSESSING OFFICER CANNOT STAND IN THE EYE OF LAW. IN FACT, THE CIT (APPEALS) AFTER CONSIDERING THE ORDER OF THIS TRIBU NAL ALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE THIS TRIBUNAL DID NOT FIND ANY REASON TO INTERFERE THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, TH E SAME IS CONFIRMED. 6. PARA 12 OF THE ORDER SHALL BE READ AS FOLLOWS: IN THE RESULT, ALL THE APPEALS OF THE REVENUE EXCE PT IN ITA 730/MDS/2016 AND ASSESSEE ARE ALLOWED FOR STATISTIC AL PURPOSE. HOWEVER, 5 M.A. NO. 231 & 233/MDS/2016 M.A. NO. 232/MDS/2016 THE REVENUE APPEAL IN ITA 730/MDS/2016 STANDS DISMI SSED. THE ORDER OF THE TRIBUNAL DATED 05.08.2016 IS RECTIFIED ACCORDIN GLY. 7. NOW COMING TO MISCELLANEOUS PETITIONS NOS.231 & 233, SHRI SHIVARAMAN, THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE COMPUTED DISALLOWANCE UNDER SECTION 14A READ WI TH RULE 8D OF ACT. IN THE VERY SAME ORDER, THE ASSESSING OFFICER HAS ALSO MADE COMPUTATION UNDER SECTION 115JB OF THE ACT. THE AS SESSING OFFICER ADDED THE SAME AMOUNT OF DISALLOWANCE MADE UNDER SE CTION 14A READ WITH RULE 8D OF THE ACT , WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115AJ OF THE ACT. ACCORDING TO THE LD. COU NSEL, DISALLOWANCE UNDER SECTION 14A HAS IN FACT ALLOWED BY CIT (APPEALS) AND THE REVENUE HAS NOT RAISED ANY SPECIF IC GROUND BEFORE THIS TRIBUNAL. ONLY GROUND RAISED BY THE R EVENUE WAS WITH REGARD TO COMPUTATION OF BOOK PROFIT FOR THE PURPOS E OF SECTION 115JB. IN FACT THIS TRIBUNAL HAS DECIDED THE MATT ER IN FAVOUR OF THE ASSESSEE AND THE ORDER OF THIS TRIBUNAL WAS BROUGHT TO THE NOTICE OF THE BENCH DURING THE COURSE OF HEARING. THEREFORE , REMITTING BACK THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDE R SECTION 14A OF THE ACT IS BEYOND THE SCOPE OF THE APPEAL FILED BY THE REVENUE. 6 M.A. NO. 231 & 233/MDS/2016 M.A. NO. 232/MDS/2016 8. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT IN THE ASSESSEES APP EAL IN ITA 326 OF 2016, THE FIRST GROUND OF APPEAL IS DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OF THE ACT. SIMILARLY, THE DEPARTMENT APPEAL IN 729 OF 2016, THE COMPUTATION OF INCOME UNDER SEC TION 115JB OF THE ACT WAS CHALLENGED. THEREFORE THE DISALLOWANC E MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT IS S UBJECT MATTER OF APPEAL IN THE ASSESSEES APPEAL. WHEN CONSIDERING THE ASSESSEE APPEAL, THIS TRIBUNAL REMITTED BACK THE MATTER TO T HE FILE OF THE ASSESSING OFFICER, IN RESPECT OF DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT. THE COMPUTATION OF BOOK PROFIT UND ER SECTION 115JB OF THE ACT DEPEND UPON THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT. THEREFORE A CCORDING TO THE LD. D.R., THIS TRIBUNAL HAS RIGHTLY REMITTED BACK T HE MATTER TO THE FILE OF THE ASSESSING OFFICER. THEREFORE IT CANNOT BE SAID THAT THIS TRIBUNAL EXCEEDED THE SCOPE OF THE APPEAL. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS SUBJE CT MATTER OF APPEAL IN THE ASSESSEES APPEAL BEFORE THIS TRIBUNA L. COMPUTATION 7 M.A. NO. 231 & 233/MDS/2016 M.A. NO. 232/MDS/2016 OF BOOK PROFIT UNDER SECTION 115JB OF THE ACT WAS S UBJECT MATTER IN THE REVENUES APPEAL. AS RIGHTLY SUBMITTED BY THE LD. D.R., COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB OF T HE ACT WOULD DEPEND UPON THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT. THEREFORE THIS TRIBUNAL HAS RIGHTLY REMITTED BACK T HE MATTER TO THE FILE OF THE ASSESSING OFFICER. HENCE, IT CANNOT BE SAID THAT THIS TRIBUNAL EXCEEDED THE SCOPE OF THE APPEAL. ACCORDI NGLY, THIS TRIBUNAL FIND THERE IS NO ERROR MUCH LESS PRIMA FACIE ERROR IN THE ORDER OF THIS TRIBUNAL. 10. IN THE RESULT, THE MISCELLANEOUS PETITIONS NOS. 231 & 233 OF 2016 ARE DISMISSED. HOWEVER, MISCELLANEOUS PETITIO N NO.232 OF 2016 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2016 AT CHENNAI. SD/- SD/- ( . ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 30 TH DECEMBER, 2016. 8 M.A. NO. 231 & 233/MDS/2016 M.A. NO. 232/MDS/2016 JR. !' /COPY TO: 1. APPLICANT 2. /RESPONDENT 3. #$% ( )/CIT(A) 4. #$% /CIT, 5. /DR 6. &' /GF.