S. R. INGOTS PVT. LTD., RAIPUR,RAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, RAIPUR, RAIPUR

ITA 414/RPR/2024

AI Insights

The case involves appeals by S.R. Ingots Pvt. Ltd. against the orders of the Assistant Commissioner of Income Tax, Central Circle-1, Raipur, which were confirmed by the Commissioner of Income Tax (Appeals), Raipur-3. The appeals pertain to the assessment years 2012-13 and 2013-14, challenging the additions made under Section 14A read with Rule 8D of the Income Tax Act, 1961, and their inclusion in the book profit under Section 115JB. The Tribunal considered various legal precedents and the principles of natural justice in its decision-making process.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106797 (ITAT-RAIPUR)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 20-11-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 09-09-2024
• Other Referred Cases: ACIT vs. Vireet Investment Pvt. Ltd., KJMC Corporate Advisors (India) Pvt. Ltd. Vs. ITO, Abhisar Buildwell Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.L.ANURAGI
• Assessee Lawyers: R. B. DOSHI
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Principle of natural justice; Search and seizure; Block assessment; Earning of tax free income; Rule 8D
• Section: 143(3); 250; 11; 132; 153A; 234B; 12; 10; 14A; 115JB

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 414 & 415/RPR/2024 (िनधा[रण वष[ Assessment Year: 2012-13 & 2013-14) S.R. Ingots Pvt. Ltd., No. 16, Recreation Road, Choubey Colony, Raipur, 492001, C.G. V s Assistant Commissioner of Income Tax, Central Circle-1, Raipur PAN: AAICS5559D (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri R. B. Doshi, CA राजˢ की ओर से /Revenue by : Shri S. L. Anuragi, CIT-DR सुनवाई की तारीख / Date of Hearing : 20.11.2024 घोषणा की तारीख/Date of Pronouncement : 22.11.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned two appeals pertain to the same assessee for different assessment years directed against the order of Commissioner of Income Tax (Appeal), Raipur-3 [in short “Ld. CIT(A)”] under section 250 of the Income Tax Act, 1961 (for short “the Act”), for the Assessment Year 2012-13 & 2013-14 dated 11.07.2024, which in turn arises from the order of Assistant Commissioner of Income Tax, Circle-1(1), Raipur, under Section 153A r.w.s. 143(3) for AY 2012-13 to 2017-18 and 143(3) of the IT Act for AY 2018-19 dated 27.12.2019. 2 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 2. The Grounds of appeal raised in the aforesaid appeals by the assessee are extracted as under: Grounds of appeal raised in ITA No. 414/RPR/2024 (AY 2012-13) 1. That the order u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961, passed by the Learned ACIT, Central Circle - 1, Raipur on 27th December, 2019 determining the total income of the Appellant assessee at Rs. 10,22,540/- was without giving proper and meaningful opportunity of being heard to the appellant is in gross violation of the principles of Natural Justice and hence Illegal, arbitrary and bad in law. 2. That the impugned assessment order passed by the Learned ACIT, Central Circle - 1, Raipur is liable to be quashed, since it has been passed in haste without application of mind in violation of the principles of natural justice. 3. The Learned ACIT, Central Circle 1, Raipur erred in arbitrarily making an addition of Rs 10,22,540/- in the total income of the assessee for the year under consideration on account of disallowance of Rs. 10,22,540/- made u/s. 14A in the relevant assessment year during the regular scrutiny proceedings u/s. 143(3) is included in the book profit u/s. 115JB for tax calculation. 4. That the ld. ACIT, Central Circle - 1, Raipur erred in facts in stating in Assessment Order that several/sufficient opportunities were given to the assessee for making compliances, whereas no proper notices were issued and no proper opportunity of being heard was given to the Assessee. 5. The Learned ACIT, Central Circle - 1, Raipur erred in charging interest U/s 234D of Rs.1,65,949/-. 6. That the Learned ACIT, Central Circle 1, Raipur arbitrarily initiated penalty proceedings under section 271 of the Income Tax Act, 1961. 7. For that the appellant craves leave to file additional grounds and / or amend or alter the grounds already taken either before or at the time of hearing of the appeal. 3 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur Grounds of appeal raised in ITA No. 415/RPR/2024 (2013-14) 1. That the order u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961, passed by the Learned ACIT, Central Circle - 1, Raipur on 27th December, 2019 determining the total income of the Appellant assessee at Rs. 20,88,680/- was without giving proper and meaningful opportunity of being heard to the appellant is in gross violation of the principles of Natural Justice and hence Illegal, arbitrary and bad in law. 2. That the impugned assessment order passed by the Learned ACIT, Central Circle 1, Raipur is liable to be quashed since it has been passed in haste without application of mind in violation of the principles of natural justice. 3. The Learned ACIT, Central Circle- 1, Raipur erred in arbitrarily making an addition of Rs 20,88,680/- in the total income of the assessee for the year under consideration on account of disallowance of Rs. 20,88,680/- made u/s. 14A in the relevant assessment year during the regular scrutiny proceedings u/s. 143(3) is included in the book profit u/s. 115JB for tax calculation. 4. That the Ld. ACIT, Central Circle 1, Raipur erred in facts in stating in Assessment Order that several/sufficient opportunities were given to the assessee for making compliances, whereas no proper notices were issued and no proper opportunity of being heard was given to the Assessee. 5. The Learned ACIT, Central Circle -1, Raipur erred in charging interest U/s 234A of Rs. 7,032/-. 6. The Learned ACIT, Central Circle -1, Raipur erred in charging interest U/s 234B of Rs. 1,89,864/-. 7. The Learned ACIT, Central Circle - 1, Raipur erred in charging interest U/s 234C of Rs. 11,837/-. 3. Since the aforesaid two appeals have the common controversy involved therein, therefore, are heard together and disposed of under this common order. 4 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 4. ITA No. 414/RPR/2024 for AY 2012-13 has been taken up as the lead case, our observation and decision therein, therefore, shall be apply mutatis mutandis to the other ITA No. 415/RPR/2024 for AY 2013-14. 5. At the outset, Shri R. B. Doshi, Authorized Representative on behalf of the assessee (in short “Ld. AR”) reiterated the facts drawing our attention to para 6 & 7 of the Assessment Order, wherein Ld. AO had observed and made an addition u/s 14A r.w.r. 8D of the Act. The observations of Ld. AO qua AY 2012-13 and 2013-14 are extracted as under: 6. During further examination of record, it is found that in the A.Y.-2012-13 the AO has made addition worth Rs. 10,22,543/-- (922473+100070) on account of expenditure incurred in relation to income which does not form part of the total income under section 14A r.w.r. 8D. The said amount however not considered for increasing book profit u/s 115JB resulted in understatement of book profit by Rs.10,22,543/- as below:- Addition as above in book profit Rs. 10,22,543/- (rounded to nearest ten ) Rs. 10,22,540/- Further, sub section 4 Of section 115JB provide that every company to which MAT is applicable should furnish with its return of income a report from a chartered accountant in 'Form 29B' certifying that the book profit has been computed in accordance with the provision of the section. However, no such report was submitted by company. 5 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 6.1 The assessee was asked vide query dated 29.01.2019 to explain, justify why Rs. 10,22,540/- may not be added in your total income for the A.Y.-2012-13. A report of CA in form 29B is also required to be submitted with your submission. The assessee filed submission which is examined and placed on record. The submission of the assessee is not convincing. The amount of Rs.10,22,540/- which was disallowed in the earlier assessment order is included in the book profit u/s 115JB for tax calculation for A.M.-2012-13. Initiate penalty u/s 271(1)0 for A.Y.-2012-13. 7. During further examination of record, it is found that in the A.Y, 2013-14 the AO has made addition worth Rs.20,88,684/- on account of expenditure incurred in relation to income which does not form part of the total income under section 14A r.w.r. SD. The said amount however not considered for increasing book profit u/s 115JB resulted in understatement of book profit by Rs.20,88,684/- as below:- Addition as above in book profit Rs. 2088684/- (rounded to nearest ten) Rs. 2088680/- Further, sub section 4 of section 115JB provide that every company to which MAT is applicable should furnish with its return of income a report from a chartered accountant in 'Form 29B' certifying that the book profit has been computed in accordance with the provision of the section. However, no such report was submitted by company. 7.1 The assessee was asked vide query dated 29.01.2019 to explain, justify why Rs.20,88,680/- may not be added in your total income for the A.Y.-2013-14. A report of CA in form 29B is also required to be submitted with your submission. The assessee filed submission which is examined and placed on record. The submission of the assessee is not convincing. The amount of Rs.20,88,680/- which was 6 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur disallowed in the earlier assessment order is included in the book profit u/s 115JB for tax calculation for A.Y.-2013-14. Initiate penalty u/s 271 (1) for A.Y.-2013-14. 6. Aggrieved by the aforesaid addition u/s 14A r.w. Rule 8D, assessee preferred an appeal before the Ld. CIT(A), however, the contention of the assessee could not find favour by the Ld. CIT(A) and the appeal of the assessee under this ground has been dismissed with the following observations: During the course of appeal proceedings, I have perused the facts of the assessment order and also studied the reply of the assessee and find that the assessee has not submitted the relevant form 29B on its part which was required during the assessment proceedings as well as appeal. Sub section 4 of section 115JB provide that Every company to which this section applies, shall furnish a report in the prescribed form from an accountant as defined in the Explanation below sub-section (2) of section 288, certifying that the book profit has been computed in accordance with the provisions of this section [before the specified date referred to in section 44ABJ or along with the return of income furnished in response to a notice under clause (i) of sub-section (1) of section 142. The assessee has submitted vide its reply dt.23.12.2021 that form 29B was submitted during the assessment proceedings but as per assessment order it is apparent that the assessee never submitted form 29B. During the course of appeal proceedings numerous opportunities were provided to the assessee for submitting documents in favour of its appeal but the assessee is completely failed to submitting evidence 'in its favour. Therefore, in absence of form 29B, the contention of assessee is not found to be correct. The Id. AO validly added the amount of Rs.10,22,540/- for assessing the income for the year under consideration. In view of the above the addition of Rs.10,22,540/- is being confirmed and ground of appeal is dismissed. The assessee has also challenged that proper opportunity of being heard was not given during the assessment proceedings. I have carefully perused the assessment order and find that the assessing officer has given ample opportunity to the assessee to submit its reply. Therefore, the contention of the assessee is again not found to be correct. In view of the above the grounds of appeal mentioned in Sr. 1 to 6 are dismissed. 7 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 7. Dissatisfied with the aforesaid decision by the Ld. CIT(A), assessee preferred an appeal before the Tribunal which is under consideration in the present case before us. 8. At the threshold, Ld. AR assailed on the issue and have placed multiple contentions against the addition made by the Ld. AO and confirmed by the Ld. CIT(A). 9. The First Contention raised by the Ld. AR was with a reliance on the order of Hon’ble Delhi High Court in the case of ACIT vs. Vireet Investment Pvt. Ltd. (2017) 58 ITR 313 (Delhi), wherein Hon’ble Delhi High Court had dealt with the issue regarding permissibility of adjustment for addition u/s 14A, when the book profit is calculated under the provisions of Section 115JB. The relevant findings of the Hon’ble Delhi High Court, are extracted as under: “Hon'ble Delhi High Court in the case of Pr. CIT V. Bhushan Steel Ltd. has upheld the decision of the Tribunal in holding that disallowance under section 14A read with Rule 8D cannot be added while computing book profits as per section 115JB as Explanation to that section does not specifically mentions section 14A of the Income Tax Act, 1961.” 8 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 6.22. In view of above discussion, we answer the question referred to us in favour of asssessee by holding that the computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to the computation as contemplated u/s 14A read with Rule 8D of the Income-tax Rules, 1962. 10. On the basis of the aforesaid judgment, it was the submission that disallowance u/s 14A read with Rule 8D could not be added while computing book profit as per Section 115JB has explanation to this Section do not specifically mentioning Section 14A of the Income Tax Act, 1961. 11. Ld. AR also placed his reliance on the order of ITAT, Mumbai in the case of KJMC Corporate Advisors (India) Pvt. Ltd. Vs. ITO in ITA No. 1512/MUM/2019 vide order dated 28.02.2020, wherein similar findings of Coordinate Bench of ITAT, Mumbai, the same are extracted as under: 7. We shall now advert to the claim of the ld. A.R that the A.O had erred in making an addition of the disallowance worked out under Sec. 14A r.w. Rule 8D for the purpose of computing the 'book profit' under Sec.115JB of the Act. On a perusal of the assessment order, we find that the A.O for the purpose of computing the 'book profit' under Sec. 115JB had made an addition of the disallowance of Rs. 10,94,782/- that was worked out by him under Sec. 14A r.w Rule 8D. We are unable to persuade ourselves to subscribe to the computing of the 'book profit' under Sec. 115JB by the A.O. As per the order of the 'Special bench' of ITAT, Delhi in the case of ACIT Vs. Vireet Investments Pvt. ltd. (2017) 165 ITD 27 (Del) (SB), the computation under clause (f) of Explanation 1 to Sec. 115JB (2) is to be 9 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur made without resorting to the computation as contemplated under Sec. 14A r.w Rule 8D. Accordingly, on the basis of our aforesaid observations we vacate the addition made by the A.O under Sec. 14A r.w Rule 8D for the purpose of computing the 'book profit' under Sec. 115JB of the Act. Order passed CIT(A) is modified in terms of our aforesaid observations. 12. The second contention raised by the Ld. AR is that the assessment in the present case was completed u/s 153A r.w.s. 143(3) of the I T Act and the year under consideration was a non-abated year, wherein no incremate material concerning issue and relevant year are unearthed or brought on record by the revenue, therefore, in terms of judgment by the Hon’ble Apex Court in the case of Abhisar Buildwell Pvt. Ltd., the addition made cannot be sustained. The Findings of Hon’ble Apex Court in the case of Abhisar Buildwell, are as under: 11. As per the provisions of Section 153A, in case of a search under section 132 or requisition under section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the 10 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under section 132 or requisition under section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where 11 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and sub-section (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under 12 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. Civil Appeal Nos.7738-7739/2021, 7736-7737/2021, 7732- 7735/2021 and 7740-7743/2021 15. Insofar as the aforesaid Civil Appeals preferred by the assessee – M/s Kesarwani Zarda Bhandar Sahson, Allahabad are concerned, these appeals have been preferred against the impugned judgment and order dated 6-9-2016 passed in ITA Nos. 270/2014, 269/2014, 15/2015, 16/2015, 268/2014 and 17/2015, as also, against the order dated 21-9-2017 passed in the review applications. It is required to be noted that the issue before the Allahabad High Court was, whether in case of completed/unabated assessments, the AO would have jurisdiction to re-open the assessments made under section 143(1)(a) or 143(3) of the Act, 1961 and to reassess the total income taking notice of undisclosed income even found during the search and seizure operation. 15.1 In view of the discussion hereinabove, once during search undisclosed income is found on unearthing the incriminating material during the search, the AO would assume jurisdiction to assess or reassess the total income even in case of completed/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was available at the time of original assessment does not require any interference. Under the circumstances, the 13 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur aforesaid appeals preferred by the assessee – M/s Kesarwani Zarda Bhandar, Sahson, Allahabad deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, no costs. Civil Appeal Nos. 15617/2017, 10267/2017, 10266/2017 & 10268/2017 16. Insofar as the aforesaid appeals filed by the assessee – Dayawanti through legal heir against the impugned common judgment and order dated 27-10-2016 passed by the High Court of Delhi at New Delhi in ITA Nos. 357/2015, 358/2015, 565/2015 and 566/2015. The question before the High Court was, whether the Income-tax Appellate Tribunal was justified in upholding the addition made on the basis of the incriminating material during the course of search. 16.1 In view of the aforesaid discussion and the reasoning, all these appeals filed by the assessee – Dayawanti through legal heir fail and the same deserve to be dismissed and are accordingly dismissed. No costs. 13. The Third contention raised by the Ld. AR was that the addition is proposed under 14A r.w. Rule 8D and there were no exempt income earned by the assessee and during the year under consideration neither there was any expenditure directly incurred in connection with the exempt income, therefore, the addition u/s 14A is not called for and the adjustment u/s 115JB is out of question. 14. Backed by aforesaid submission, it was the prayer that the addition made by the Ld. AO are unjustified, illegal, arbitrary and bad in law. 14 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 15. On the other hand, contradicting the aforesaid submissions of the Ld. AR, Ld. CIT DR, Shri S. L. Anuragi submitted that addition which was made by the Ld. AO in the original assessment u/s 143(3), but missed to be added while making the computation under the assessment order, therefore, the Ld. AO was within his powers to add the said addition while framing the assessment u/s 153A r.w.s. 143(3). Also, the relevant information in the form of Audit Report in Form 29B could not be furnished by the assessee before the Ld. AO in time, therefore, Ld. CIT(A) had rightly disallowed the contentions of the assessee and dismissed the appeal. Under such circumstances, it is request that order of Ld. CIT(A) deserves to be upheld. 16. We have considered the rival submissions, perused the material available on record and case laws relied upon by the Ld. AR. Admittedly, in the present case, there was an addition u/s 14A r.w. Rule 8D by the Ld. AO for which adjustment are not permissible while computing the book profit as prescribed u/s 115JB, in terms of principals laid down by the Hon’ble Delhi High Court in the case of ACIT vs Vireet Investment Pvt. Ltd. (supra). However, adjustment qua the expenditure directly incurred towards the generating the exempt income can be made for computing the books profit u/s 115JB as per clause (f) of explanation 1 to section 115JB(2) which requires increase in the book profit by “the amount or amounts of expenditure relatable to any income to which [Section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply], without resorting to the amount 15 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur calculated u/s 14A r.w. Rule 8D, therefore, for verification of such facts that whether there is any expenditure incurred by the assessee in terms of exempt income earned as specified u/s 10 of the Act, the matter requires to be restored back to the files of Ld. AO, for fresh adjudication following the ratio of law accorded by the Hon’ble Delhi High Court in the case of ACIT vs Vireet Investment Pvt. Ltd. (supra). 17. Apropos, assessee’s reliance on the judgment of Hon’ble Apex Court in the case of Abhisar Buildwell (supra), we may observe that the premises of the assessee were searched u/s 132 of the Act on 31.08.2017 and the assessment were conducted u/s 153A r.w.s. 143(3) for the AY 2011-12 to 2017-18. The year under consideration before us is AY 2012-13. It was the submission by Ld. AR that the year under consideration was unabated year and there was no incriminating material concerning the relevant assessment year was surfaced during the search, therefore, the addition made by Ld. AO u/s 14A r.w. Rule 8D was without authority of law, on this count itself the assessment has to be quashed. 18. Ld. CIT-DR on this issue, have submitted that as per the impugned assessment order and material on record, it is not transpiring that whether the year under consideration is an unabated year and also whether there was any incriminating material available with the Ld. AO, therefore, it was the request that matter may be set aside to the files of Ld. AO for fresh adjudication. 16 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 19. On a thoughtful consideration of the facts and circumstances of the case, after hearing the contention of both the parties and on perusal of the judicial pronouncements relied upon by the assessee. We find it appropriate to restore this matter back to the files of the Ld. AO with the following directions. (i) If there is no expenditure incurred for earning of the exempted income described u/s 10 of the Act, then no addition on the basis of computation in terms of provisions of section 14A r.w. Rule 8D can be made, following the mandate of law as per judgment in the case of Vireet (supra). (ii) If the year under consideration is an unabated assessment year and no incriminating material was surfaced for the year concerned, then no addition can be made. However, the completed/unabated assessments can be re- opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. For this purpose, the principal of law laid down by the Hon’ble Apex Court in the case of Abhisar Buildwell (supra) is binding on the revenue authorities. 20. In terms of aforesaid observations, the issue raised by the assessee in its Grounds of appeal No. 1 & 3 are disposed of partly in favour of the assessee. 17 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur 21. The other grounds assailed by the assessee are general, academic and consequential in nature, which while remitting the issues back to the file of Ld. AO, are rendered as infructuous, thus, dismissed. 22. In result, ITA No. 414/RPR/2024 of the assessee has been partly allowed for statistical purposes. 23. Having identical facts and circumstances, except the quantum of addition, our decision in ITA No. 414/RPR/2024 shall apply mutatis mutandis to ITA 415/RPR/2024. Consequently, ITA NO. 415/RPR/2024 of the assessee has also been partly allowed for statistical purposes. 24. In combined result, ITA No. 414 & 415/RPR/2024 are partly allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the open court on 22/11/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 22/11/2024 Vaibhav Shrivastav 18 ITA No. 414 & 415/RPR/2024 S. R. Ingots Pvt. Ltd. Vs ACIT, Central circle-1, Raipur आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- S. R. Ingots Pvt. Ltd. 2. ŮȑथŎ / The Respondent- ACIT, Central Circle-1, Raipur 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT, Raipur (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. // स×याǒपत Ĥित True copy // "