SHREE CEMENT LIMITED, BEAWAR V. ACIT, Ajmer

MA 43/JPR/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 5087 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1996-1997
• Appeal Filed On: 15-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY MALIK CIT DHK
• Keywords: Proportionate interest
• Section: 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ MA NO.43/JP/15 (ARISING OUT OF ITA NO. 649/JP/2011) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 1996-97 M/S SHREE CEMENT LTD., BANGUR NAGAR, PB NO.33, BEAWAR CUKE VS. THE ACIT, CIRCLE-2, AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCSG VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : MS. RUCHIRA KHERIA (CA) SHRI ANKIT BANSAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALIK.,(ADDL. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.12.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 23/12/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE AGAINST THE ORDER PASSED BY THE CO-ORDINATE BENCH IN ITA NO . 649/JP/11 DATED 17.10.2014. 2. IN ITS APPLICATION, THE ASSESSEE HAS SUBMITTED T HAT WHILE PASSING THE ORDER BY THE TRIBUNAL, THE FOLLOWING ERRORS WERE FO UND WHICH NEEDS TO BE RECTIFIED AND HENCE THIS APPLICATION MAY BE ADMITTE D AND THE ORDER MAY BE RECTIFIED: MA NO. 43/JP/15 SHREE CEMENT BEAWAR VS. ACIT, CIRCL-2, AJMER. 2 2.1 NOTING IN THE TRIBUNAL ORDER THAT ASSESSEE DID NOT DISPUTE THE FINDINGS OF CIT(A) REGARDING ALLOCATION OF PROPORTIONATE MA NAGEMENT EXPENSES WHILE COMPUTING DEDUCTION U/S 80M IS NOT CORRECT AND REQ UIRES RECTIFICATION. IN THIS REGARD, IT WAS SUBMITTED THAT WHILE ALLOCATING THE FREE FLOATING INTEREST AMOUNTING TO RS. 197.43 LACS. LD. CIT(A) VIDE ORDER DATED 20.04.2011 HAS ONLY CONSIDERED INVESTMENTS OF RS.19743.25 LACS AS ON 31 .03.1996 AND NOT CONSIDERED CURRENT ASSETS OF RS. 9307.77 LACS. THE AMOUNT OF RS. 197.43 LACS IS FREE FLOATING IN THE SENSE THAT IT IS NOT ATTRIBUTA BLE TO THE LOANS RAISED AND UTILISED IN PLANT AND MACHINERY AND FIXED ASSETS/IN VENTORIES. THAT BEING SO, THE INTEREST EXPENSES SHOULD HAVE BEEN ALLOCATED CONSI DERING THE CURRENT ASSETS OF RS. 9307.77 LACS ALONGWITH INVESTMENT OF RS.1973.25 LACS AS ON 31.01.1996 RESULTING IN DISALLOWANCE OF RS. 3.60 AS PROPORTION ATE INTEREST EXPENDITURE AS UNDER: PROPORTIONATE INTEREST EXPENDITURE = 197.43 X 205.8 1 90307.77 + 1973.25 = 3.60 LACS. THE ABOVE ASPECT WAS DULY SUBMITTED BEFORE THE HON BLE BENCH DURING THE COUSE OF HEARING ON 24.092014 AND IT WAS PRAYED THA T THE ORDER OF LD. CIT(A) NEEDS TO BE MODIFIED TO THIS EXTENT. HOWEVER, IN TH E ORDER AT PAGE 8, PARA 2.8 IT HAS BEEN HELD THAT: WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF HEARING, WE FIND T HAT THE LD. AR HAS NOT CONTROVERTED THE FINDINGS GIVEN BY THE LD. CIT(A) W HICH IS BASED ON FACTS AND FIGURES OF THE CASE. THE FIGURES HAVE BEEN PRO VIDED IN THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. THUS IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INT ERFERE IN THE ORDER OF THE LD. CIT(A) WHICH IS CONFIRMED ON THIS ISSUE. MA NO. 43/JP/15 SHREE CEMENT BEAWAR VS. ACIT, CIRCL-2, AJMER. 3 2.2 NON-CONSIDERATION OF DECISIONS AS RELIED ON BY THE APPELLANT FOR ADMISSION OF ADDITIONAL GROUNDS. IN THIS REGARD, I T WAS SUBMITTED THAT WHILE PASSING THE ORDER IN ITA NO.649/JP/2011 DATED 17.10 .2014, THE HONBLE BENCH DID NOT ADMIT ADDITIONAL GROUNDS FILED BY THE APPEL LANT. THE FOLLOWING ADDITIONAL GROUNDS WERE TAKEN BEFORE THE HONBLE BENCH: (1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, RECTIFICATION N PROCEEDINGS U/S 154 INITIATED BY AO. TO DISALLOW PR OPORTIONATE EXPENSES ON NOTIONAL BASIS IN COMPUTING DEDUCTION U/S 80M IS B AD IN LAW SINCE THERE WAS NO MISTAKE APPARENT FROM RECORD WHICH REQUIRED RECT IFICATION AND HENCE THE SAME NEEDS TO BE SUMMARILY QUASHED. (2) THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE ACTION OF THE AO IN MAKING DISALLOWANCE OF PROPORTIONATE EXPENSES ON NOTIONAL BASIS IN COMPUTING DEDUCTION U/ S 80M WHEN NO ACTUAL EXPEND ITURE HAS BEEN INCURRED BY THE APPELLANT IN EARNING DIVIDEND INCOME IS BAD IN LAW AND NOT SUBSTANTIALLY. IN SUPPORT OF THE ABOVE GROUNDS THE APPELLANT DURIN G THE COURSE OF HEARING RELIED, AMONG OTHERS, ON THE DECISION OF HONBLE C ALCUTTA HIGH COURT IN THE CASE OF FARIDABAD INVESTMENT CO. LTD. VS. CIT(2011) 338 ITR 26 (CAL.) WHEREIN IT HAS BEEN HELD THAT AO HAVING ALLOWED DEDUCTION U/S 80M IN RESPECT OF GROSS DIVIDEND AND DISCOVERED NO ACTUAL EXPENDITURE INCUR RED ON REALIZATION OF SUCH DIVIDEND, ASSESSMENT COULD NOT BE RECTIFIED U/S 154 TO REDUCE THE DEDUCTION U/S 80M BY PROPORTIONATE MANAGEMENT EXPENSES WORKE D OUT ON NOTIONAL BASIS. THE ABOVE GROUNDS ARE PURELY LEGAL IN NATURE AND CA N BE RAISED FOR THE FIRST TIME EVEN THOUGH NOT TAKEN EARLIER BY THE APPLICA NT BEFORE THE HONBLE TRIBUNAL IN EARLIER PROCEEDINGS.(HOWEVER DULY TAKEN BEFORE LD. CIT(A)) AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF INVESTO RS INDUSTRIAL CORPORATION LTD. VS. CIT (1991) 194 ITR 548 (BOM.). THE ABOVE DECISIONS ARE DIRECTLY ON THE MA NO. 43/JP/15 SHREE CEMENT BEAWAR VS. ACIT, CIRCL-2, AJMER. 4 ISSUE WHICH WAS IN DISPUTE BEFORE THE HONBLE BENCH BUT HAS NOT BEEN CONSIDERED WHILE PASSING THE ORDER. 3. THE LD DR IS HEARD WHO HAS SUBMITTED THAT THE OR DER PASSED BY THE TRIBUNAL DOESNT CALL FOR ANY RECTIFICATION AS THE SAME HAS BEEN PASSED AFTER HEARING BOTH THE PARTIES AND MATERIAL FACTS ON RECO RD. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THIS IS THE SECOND ROUND OF APPEAL WHERE TRIBUNAL HAS HEARD THE MATTER AND PASSED THE IMPUNGED ORDER DATE D 17.10.2014. IN THE EARLIER ROUND, AFTER HEARING BOTH THE SIDES, THE TR IBUNAL HAD COME TO A TENTATIVE FINDING THAT RS 22.98 LACS TOWARDS PROPOR TIONATE EXPENSES FOR EARNING INTER-CORPORATE DIVIDENDS SHOULD BE DISALLO WED. HOWEVER, IN THE INTEREST OF JUSTICE, THE MATTER WAS SET-ASIDE TO TH E FILE OF THE AO. IN THE SECOND ROUND, THE MATTER HAS AGAIN TRAVELLED TO THE TRIBUN AL WHERE THE TRIBUNAL HAS FINALLY SUSTAINED THE DISALLOWANCE OF RS 20.59 LACS . IT IS THUS OBSERVED THAT THE APPELLANT HAS GOT AMPLE OPPORTUNITIES TO REPRESENT ITS CASE AND WITH A MINOR DIFFERENCE, THE ADDITION TENTATIVELY DETERMINED IN THE FIRST ROUND HAS BEEN SUSTAINED. IT IS IN THAT SENSE THAT THE TRIBUNAL W HILE PASSING THE IMPUNGED ORDER HAS STATED THAT THE LD AR HAS NOT CONTROVERTE D THE FINDINGS GIVEN BY THE LD CIT(A) WHICH ARE BASED ON FACTS AND FIGURES PROV IDED IN THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. FURTHER, REGARDING CO NTENTION OF THE ASSESSEE THAT MA NO. 43/JP/15 SHREE CEMENT BEAWAR VS. ACIT, CIRCL-2, AJMER. 5 WHILE DISMISSING THE ADDITIONAL GROUNDS OF APPEAL, THE TRIBUNAL HAS NOT CONSIDERED THE DECISIONS QUOTED BY THE LD AR. FROM PERUSAL OF RECORDS, IT IS NOTICED THAT THE TRIBUNAL HAS GIVEN A CLEAR FINDING WHILE DISPOSING OFF THE ADDITIONAL GROUNDS THAT BOTH THE GROUNDS WERE NOT ADMITTED AS ARGUED BY BOTH THE PARTIES. AS SUCH, THERE WAS NO NOTIONAL DI SALLOWANCE U/S 80M OF THE ACT. THEREFORE, THE ADDITIONAL GROUNDS RAISED BY T HE ASSESSEE ARE NOT ALLOWED AND THE SAME ARE DISMISSED. WHERE THE TRIBUNAL HAS CATEGORICALLY HELD THAT THE ARGUMENTS WERE HEARD, THE SAME NECESSARILY IMPL IES ARGUMENTS AROUND THE LEGALITY AND MERITS OF ADMISSION OF ADDITIONAL GROU NDS OF APPEAL AND THE RELEVANCE OF VARIOUS CASE LAWS INCLUDING THAT OF FA RIDABAD INVESTMENT CO. LTD 338 ITR 26(CAL). IT CANNOT BE SAID THAT THE TRIBUN AL HAS NOT CONSIDERED THE SAID DECISIONS WHILE PASSING ITS ORDER. IN THE RESULT, WE DONT THINK THERE IS ANY MERIT IN THE SUBJECT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE AND THE SAME IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/12 /2016. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 23/12/2016 PILLAI MA NO. 43/JP/15 SHREE CEMENT BEAWAR VS. ACIT, CIRCL-2, AJMER. 6 VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHREE CEMENT BEAWAR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-2, AJMER 3. VK;DJ VK;QDR@ CIT AJMER 4. VK;DJ VK;QDRVIHY@ THE CIT(A) AJMER 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (MA NO. 43/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.