Havells India Ltd., Delhi V. DCIT (LTU), New Delhi

MA 26/DEL/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6132 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I1
• Assessment Year: 2009-2010
• Appeal Filed On: 02-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VED JAIN ADV SHRI ASHISH GOEL
• Keywords: Rectification of order
• Section: 115JB; 254(2); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY, I-2, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) MA NO. 26/DEL/2021 (ARISING OUT OF ITA NO. 6194/DEL/2015) (ASSESSMENT YEAR : 2009-10) HAVELLS INDIA LTD., 1, RAJ NARAIN MARG, CIVIL LINES, NEW DELHI-110054 PAN NO. AAACH 0351 E VS. DCIT(LTU) NBCC PLAZA, SECTOR 4 PUSHP VIHAR, SAKET NEW DELHI (APPELLANT) (RESPONDENT) A SSESSEE BY SHRI VED JAIN, ADV SHRI ASHISH GOEL, ADV. RE VENUE BY SHRI KUMAR PARNAV, SR.D.R. DATE OF HEARING: 10 / 0 9 /202 1 DATE OF PRONOUNCEMENT: 10 / 0 9 /202 1 ORDER PER ANIL CHATURVEDI, AM: THE PRESENT MISCELLANEOUS APPLICATION (MA) HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL DATED 19.01.2021 IN RESPECT OF ITA NO.6194/DEL/2015 & 463/DEL/2016 FOR ASSESSMENT YEAR 2009-10. 2. IN THE MA, THE ASSESSEE HAS INTER ALIA CONTENDED THAT A COMMON ORDER DATED 19.01.2021 WAS PASSED BY THE HONBLE 2 TRIBUNAL IN ITA NO.6194/DEL/2015 & 463/DEL/2016. IT IS THE SUBMISSION OF THE LD AR THAT IN APPEAL BEARING ITA NO.463/DEL/2016, THE GROUND NO.3 WAS WITH RESPECT TO THE CONFIRMATION OF DISALLOWANCE OF RS.2,47,68,964/- ON ACCOUNT OF THE PROVISION MADE BY THE ASSESSEE FOR SALES INCENTIVE UNDER SHAHENSHAH SCHEME. AO HELD THE LIABILITY TO BE CONTINGENT LIABILITY AND THEREFORE NOT ALLOWABLE. THE ACTION OF AO WAS UPHELD BY CIT(A). HE SUBMITTED THAT THE TRIBUNAL WHILE DECIDING THE ISSUE NOTED THAT IDENTICAL ISSUE AROSE IN ASSESSEES OWN CASE IN EARLIER YEARS AND THE CO-ORDINATE BENCH IN EARLIER YEARS HAD HELD THE PROVISION MADE BY THE ASSESSEE TO BE ON SCIENTIFIC BASIS AND THEREFORE NOT A CONTINGENT LIABILITY AND THEREFORE ALLOWED THE EXPENSES. FOLLOWING THE ORDER OF THE TRIBUNAL FOR EARLIER YEARS, THE GROUND OF THE ASSESSEE WAS ALLOWED VIDE PARA NO.20 IN ITA NO.463/DEL/2016. 3. LD AR SUBMITTED THAT IN ITA NO.6194/DEL/2015 GROUND NO.2 & 3 WERE REGARDING THE RECTIFICATION ORDER PASSED BY THE AO AFTER PASSING ORIGINAL ASSESSMENT ORDER WHEREBY HE ADDED THE AFORESAID AMOUNT OF RS.2,47,48,964/- TO THE BOOK PROFITS BY HOLDING IT TO BE A CONTINGENT LIABILITY. THUS THE ISSUE IN THE APPEAL WAS FIRSTLY THE AFORESAID AMOUNT IS NOT A CONTINGENT LIABILITY AND SECONDLY EVEN IF IT FOR THE TIME BEING IS ASSUMED TO BE A CONTINGENT LIABILITY, THE ISSUE OF IT BE A CONTINGENT LIABILITY OR AN ASCERTAINED LIABILITY TO BE DEBATABLE AND THEREFORE ALSO WAS NOT AMENABLE TO RECTIFICATION U/S 154 OF THE ACT. LD AR SUBMITTED WHILE DECIDING THE APPEAL IN ITA NO.6194/DEL/2015, THE HONBLE 3 TRIBUNAL VIDE PARA 31 OF THE ORDER HELD THE GROUND TO BE ACADEMIC IN NATURE AND THEREFORE DISMISSED. 4. LD AR SUBMITTED THAT THE DISMISSAL OF GROUND VIDE PARA 31 WOULD RESULT INTO UPHOLDING THE ACTION OF THE AO IN MAKING THE ADDITION TO THE BOOK PROFITS U/S 115JB OF THE ACT WHICH IS THUS CONTRARY TO THE FINDING GIVEN IN PARA 20 OF THE ORDER IN RESPECT OF GROUND NO.3 OF APPEAL IN ITA NO.463/DEL/2016, WHICH IS A MISTAKE APPARENT ON RECORD AND THEREFORE RECTIFIABLE U/S 254(2) OF THE ACT. HE THEREFORE SUBMITTED THAT APPROPRIATE ORDER BE PASSED TO RECTIFY THE AFORESAID MISTAKE. 5. BEFORE US, LD DR DID NOT CONTROVERT THE SUBMISSIONS MADE BY LD AR. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT VIDE PARA 20 OF THE ORDER (IN ITA NO. 6194/DEL/2015) IN RESPECT OF AMOUNT OF RS.2,47,68,964/-, WE HAVE FOR THE REASONS STATED THEREIN HAVE HELD THE AFORESAID AMOUNT TO BE ALLOWABLE EXPENDITURE AS IT IS NOT A LIABILITY OF CONTINGENT IN NATURE. ONCE THE AMOUNT HAS BEEN HELD IT TO BE ALLOWABLE AS NOT BEING IN CONTINGENT NATURE, THE EFFECT OF THE SAME WILL BE THAT SINCE IT IS NOT IN THE NATURE OF CONTINGENT LIABILITY, IT CANNOT BE ADDED TO THE BOOK PROFITS U/S 115JB OF THE ACT. WE THUS FIND FORCE IN THE SUBMISSIONS OF LD AR THAT THE GROUND NO.3 IN ITA NO.463/DEL/2016 SHOULD HAVE BEEN ALLOWED AS ITS DISMISSAL WOULD BE CONTRARY TO THE FINDING GIVEN IN PARA 20 OF THE ORDER. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF THE 4 VIEW THAT THE DISMISSAL OF GROUND NO.3 IS A MISTAKE APPARENT WHICH IS AMENABLE TO RECTIFICATION U/S 254(2) OF THE ACT. WE ACCORDINGLY RECTIFY PARA 53 OF THE ORDER IN ITA NO.463/DEL/2016 BY HOLDING THAT THE GROUNDS OF THE ASSESSEE ARE ALLOWED. THUS THE MA OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE MA OF THE ASSESSEE IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 10.09.2021 SD/- SD/- (KULDIP SINGH) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:- 10.09.2021 PY* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI