Gujarat State Financial Services Ltd., Ahmedabad V. The ACIT.,Circle-4, Ahmedabad

MA 280/AHD/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5136 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA SING
• Keywords: Commercial expediency
• Section: 14A; 80G; 37; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER 1. MA NO.280/AHD/2018 AY 2008-09 ( IN ITA NO.2456/AHD/14 AY 2008-09 ) 2. ITA NO.2456/AHD/2014 ( ASSESSMENT YEAR: 2008-09 ) 1-2. GUJARAT STATE FINANCIAL SERVICES LTD. WING B, 3 RD FLOOR KHANIJ BHAVAN 132 FT RING ROAD NR.UNIVERSITY GROUND VASTRAPUR,AHMEDABAD-380052 / VS. 1-2. THE ACIT CIRCLE-4 AHMEDABAD-380 014 ./ ./ PAN/GIR NO. : AAACG 5581 B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIMAL DESAI, AR / RESPONDENT BY : SHRI VIRENDRA SING, SR.DR / DATE OF HEARING 18/01/2019 !'# / DATE OF PRONOUNCEMENT 30/01/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: MA NO.280/AHD/2018 FOR AY 2008-09 BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE HAS REQUESTED FOR RECALLING OF THE ORDER DATED 06/04/2018 PASSED BY T HE ITAT AHMEDABAD BENCH B IN ITA NO. 2456/AHD/2014 FOR AY 2008-09 T O RECTIFY THE MISTAKE APPARENT FROM THE RECORD U/S 254(2) OF THE ACT. MA NO.280/AHD/2018 AND ITA NO.2456/AHD/2014 GUJARAT STATE FINANCIAL SERVICES LTD. VS. ACIT ASS T.YEAR 2008-09 - 2 - 2.1. THE ASSESSEE SUBMITTED AS UNDER: 1. THE APPLICANT HEREIN FILES THIS MISCELLA NEOUS APPLICATION FOR A.Y. 2008- 09 ARISING OUT OF THE CONSOLIDATED ORDER PASSED BY THE HON'BLE 'B' BENCH OF ITAT ON 06/04/2018, WHICH ALSO INCLUDED THE ORDER IN RES PECT OF APPEAL NO. 2456/AHD/2014 FILED BY THE ASSESSEE. APPLICANT HER EIN REQUESTS THE HON'BLE BENCH TO CONSIDER THE FOLLOWING MISTAKE AS MISTAKE APPARENT FROM RECORD AND RECTIFY THE ORDER BY PASSING A SUITABLE RECTIFICATO RY ORDER U/S 254(2). 2. FACTS RELATING TO THIS MISCELLANEOUS APPL ICATION ARE THAT THE ASSESSEE HAD FILED APPEAL NO.2456/AHD/2014 WHEREIN THEY HAD TAKE N UP EFFECTIVELY TWO ISSUES FOR THE CONSIDERATION OF THE HON'BLE BENCH VIDE FOU R GROUNDS OF APPEAL FILED BEFORE HON'BLE BENCH. THE FIRST GROUND OF APPEAL WA S GENERAL, WHEREAS GROUND NO. 2 & 3 RELATED TO THE ISSUE OF DISALLOWANCE U/S 14A R.W. RULE 8D, WHEREAS GROUND NO. 4 ALONGWITH THE SUB-GROUNDS RELATED TO T HE DISALLOWANCE OF RS.18 CRORES BEING CONTRIBUTION MADE BY THE ASSESSEE TO G UJARAT SOCIO ECONOMIC DEVELOPMENT SOCIETY (GSEDS), WHICH WAS CLAIMED BY T HE ASSESSEE AS DEDUCTIBLE U/S 37 R.W.S. 28 ON THE GROUND OF BUSINESS EXPEDIEN CY. 3. THE HON'BLE TRIBUNAL, HOWEVER, WHILE DISPOS ING OFF OF THE APPEAL NO. 2456/AHD/2014 IN ITS CONSOLIDATED ORDER ON PAGE NO. 11 OF THE ORDER ONLY TOOK UP THE ISSUE RELATING TO DISALLOWANCE U/S 14A R.W. RUL E 8D AND DID NOT ADJUDICATE ON THE ISSUE RELATING TO DISALLOWANCE OF RS.18 CRORES CONTRIBUTION TO GSEDS WHICH WAS THEREIN THE GROUND NO.4 BEFORE THE HON'BLE BENC H. 4. SINCE THE ABOVE GROUND OF APPEAL HAS BEEN LEFT OUT TO BE ADJUDICATED UPON, THE SAME CONSTITUTES A MISTAKE APPARENT FROM RECORD AND MAY PLEASE BE RECTIFIED BY PASSING A SUITABLE RECTIFICATORY ORDER U/S 254 (2) OF THE ACT. 5. THE ORDER OF THE HON'BLE TRIBUNAL DATED 0 6/04/2018 WAS SERVED UPON THE ASSESSEE ON 02/06/2018 AND HENCE THIS MISCELLANEOUS APPLICATION IS WITHIN THE TIME PERMITTED UNDER THE ACT. 6. APPLICANT REQUESTS THE HON'BLE BENCH TO C ONSIDER THE AFORESAID MISCELLANEOUS APPLICATION. AND FOR THIS ACT OF KINDNESS, THE APPLICANT SHALL F OREVER BE GRATEFUL. MA NO.280/AHD/2018 AND ITA NO.2456/AHD/2014 GUJARAT STATE FINANCIAL SERVICES LTD. VS. ACIT ASS T.YEAR 2008-09 - 3 - 3. BECAUSE OF THE ABOVE, THE LD.COUNSEL FOR THE ASS ESSEE REQUESTED TO RE-CALL THE GROUND NO. 4 RAISED BEFORE THE TRIBUNAL IN THE MAIN APPEAL WHICH WAS OMITTED TO BE ADJUDICATED INADVERTENTLY. 4. ON THE OTHER HAND, THE LD.DR DID NOT OPPOSE IF T HE ORDER PASSED BY THE TRIBUNAL IS RECALLED FOR THE ADJUDICATION OF TH E GROUND NO.4 RAISED BY THE ASSESSEE IN ITS MAIN APPEAL. 5. WE HAVE HEARD THE LD. REPRESENTATIVES APPEARING FOR THE RESPECTIVE PARTIES. WE HAVE PERUSED THE RELEVANT M ATERIAL AVAILABLE ON RECORD. 5.1. ON PERUSAL OF THE ITAT ORDER BEARING ITA NO. 2 456/AHD/2014 PERTAINING TO AY 2008-09 VIDE DATED 06/04/2018, WE NOTE THAT THE ITAT OMITTED TO ADJUDICATE THE GROUND NO.4 RAISED BY THE ASSESSEE IN ITS APPEAL INADVERTENTLY. THUS, WE ARE OF THE VIEW THAT THERE WAS AN APPARENT MISTAKE IN THE ORDER OF ITAT WHICH REQUIRES TO BE R ECTIFIED U/S 254(2) OF THE ACT. ACCORDINGLY, WE RECALL THE ORDER OF THE I TAT AS DISCUSSED ABOVE FOR THE LIMITED PURPOSE OF ADJUDICATION OF GROUND N O.4 RAISED IN THE APPEAL. HENCE, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED. 6. THE LD.AR FURTHER SUBMITTED THAT THE ISSUE RAISE D IN GROUND NO.4 HAS ALREADY BEEN DECIDED BY THIS TRIBUNAL AGAINST T HE ASSESSEE IN ITS CASE IN ITA NO. 1478/AHD/2013 PERTAINING TO AY 2009-10 V IDE ORDER DATED MA NO.280/AHD/2018 AND ITA NO.2456/AHD/2014 GUJARAT STATE FINANCIAL SERVICES LTD. VS. ACIT ASS T.YEAR 2008-09 - 4 - 06/04/2018. ACCORDINGLY, THE LD.AR BEFORE US PLEAD ED THAT THE GROUND IN THE MAIN APPEAL COULD BE ADJUDICATED BY DISMISSI NG OF THE SAME AT THIS MOMENT ONLY. 7. ON THE OTHER HAND, THE LD. DR DID NOT RAISE ANY OBJECTION IF THE APPEAL IS HEARD ON MERIT IN THE RECALLED ORDER. AC CORDINGLY, WE DECIDED TO PROCEED TO ADJUDICATE THE ISSUE RAISED IN THE MA IN APPEAL OF THE ASSESSEE. ASSESSEES APPEAL IN ITA NO.2456/AHD/2014 FOR AY 20 08-09 8. THE ASSESSEE HAS RAISED THE FOLLOWING RELEVANT G ROUND: 4. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS I N NOT GRANTING DEDUCTION OF RS.18 CRORES CONTRIBUTED BY THE APPELL ANT TO GUJARAT SOCIO ECONOMIC DEVELOPMENT SOCIETY (GSEDS) UNDER SE CTION 37 R.W.S.28 OF THE INCOME TAX ACT. IT IS SUBMITTED TH AT IT BE SO HELD NOW. 9. AT THE OUTSET, WE NOTE THAT THE ISSUE RAISED BY THE ASSESSEE HAS ALREADY BEEN DECIDED BY THIS TRIBUNAL AGAINST THE A SSESSEE AS DISCUSSED ABOVE. THE RELEVANT EXTRACT OF THE ORDER IS REPROD UCED AS UNDER: 20. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF T HE AUTHORITIES BELOW. IT IS TRUE THAT AS PER DIRECTIONS OF THE GO VERNMENT OF GUJARAT, THE ASSESSEE HAD MADE THE CONTRIBUTION OF RS.30 CRORES. MA NO.280/AHD/2018 AND ITA NO.2456/AHD/2014 GUJARAT STATE FINANCIAL SERVICES LTD. VS. ACIT ASS T.YEAR 2008-09 - 5 - HOWEVER, IN OUR CONSIDERED OPINION, THE DIRECTIONS OF GUJARAT CANNOT OVERRIDE THE PROVISIONS OF THE INCOME TAX AC T. WE FIND THAT THE ASSESSEE HAS CONTRIBUTED 30% OF ITS PROFIT WHIC H IS AKIN TO APPROPRIATION OF PROFIT AND THIS 30% CANNOT BE CONS TRUED AS CHARGED AGAINST PROFIT. 21. THE CONTRIBUTION MADE BY THE ASSESSEE TO GSED S IS ELIGIBLE FOR DEDUCTION U/S.80G OF THE ACT AND THAT HAS BEEN ALLOWED BY THE A.O. BY MAKING THE CONTRIBUTION, THE ASSESSEE HAS ONLY FOLLOWED THE DICTATE OF THE GOVERNMENT OF GUJARAT BUT NOWHER E HAS DEMONSTRATED THE NEXUS BETWEEN THE CONTRIBUTION AND THE COMMERCIAL EXPEDIENCY VIS-A-VIS BENEFITS TO THE ASS ESSEE. THE CONTRIBUTION SO MADE IS ELIGIBLE FOR DEDUCTION U/S. 80G AND THEREFORE IN OUR UNDERSTANDING OF THE FACTS, THE CL AIM OF ENTIRE CONTRIBUTION AS DEDUCTION U/S.37 OF THE ACT IS NOT TENABLE. 22. THE ASSESSEE HAS RELIED UPON VARIOUS JUDICIAL DECISIONS. WE HAVE CONSIDERED THOSE JUDICIAL DECISIONS CAREFULLY. IN NONE OF THE DECISIONS RELIED UPON BY THE ASSESSEE, THE PAYMENT WAS ELIGIBLE FOR DEDUCTION U/S.80G OF THE ACT. THEREFORE, THE RELIA NCE PLACED BY THE ASSESSEE IS MISPLACED. 23. CONSIDERING THE FACTS IN TOTALITY, THIS GROUND IS DISMISSED. 10. THE FACTS OF THE CASE ON HAND ARE IDENTICAL TO THE FACTS AS DISCUSSED ABOVE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A). HENCE, GROUND NO.4 OF ASSESSEES APPEAL IS DISMISSED. MA NO.280/AHD/2018 AND ITA NO.2456/AHD/2014 GUJARAT STATE FINANCIAL SERVICES LTD. VS. ACIT ASS T.YEAR 2008-09 - 6 - 11. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS ALLOWED, WHEREAS GROUND NO.4 OF ASSESSEES APPEAL I S DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 30/01/2019 SD/- SD/- (MS.MADHUMITA ROY) (WASEEM AH MED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 30/01/2019 &. ., .(. . / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) *+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-4, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !' #, / ITAT, AHMEDABAD 1. DATE OF DICTATION 21.1.2019 (DICTATION PAD 9- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.1.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.30.1.2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.1.2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER