Income Tax Appellate Tribunal - Ahmedabad
Manpasand Beverages Ltd.,, Vadodara vs The Deputy Commissioner Of Income Tax, ... on 15 November, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH
Before: Shri Rajpal Yadav, Judicial Member
And Shri Amarjit Singh, Accountant Member
ITA No. 2251/Ahd/2017
Assessment Year 2013-14
Manpasand Beverages Ltd. Dy. CIT,
E-62, Manjusar GIDC, Circle-2(1)(2),
Manjusar Savli Road, Vs Baroda
Vadodara-391775 (Respondent)
PAN: AAHCM1210E
(Appellant)
Revenue by: Shri Mudit Nagpal, Sr. D.R.
Assessee by: Shri M ukund Bakshi, A.R.
Date of hearing : 26-09-2019
Date of pronounce ment : 15-11-2019
आदेश /ORDER
PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee's appeal for A.Y. 2013-14, arises from order of the CIT(A)-2, Vadodara dated 21-07-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short "the Act".
2. The assessee has raised following grounds of appeal:-
"1. The Ld. Commissioner of Income Tax (Appeals)-1, Vadodara has erred in law and on facts in confirming the disallowance of an amount of Rs. 1,55,239/- u/s. 14A of the I.T. Act, being I.T.A No. 2251/Ahd/2017 A.Y. 2013-14 Page No 2 Manpasand Beverages Ltd. vs. Dy. CIT administrative cost on the investments. The disallowance being unwarranted in facts and in law is prayed to be allowed.
2. The Ld. Commissioner of Income-tax (Appeals)-2, Baroda has erred in law and in facts in confirming the addition of an amount of Rs. 20,90,804/- representing the following items of expense:-
i) Interest on TDS Rs. 7,191/-
ii) Interest on Excise Duty Rs. 7,634/-
ii) Excise duty on Other Expenses Rs. 15,07,036/-
iii) Late payment of Emp. Contribution to P.P.
u/s. 36(1)(va) Rs. 5.68,943/-
Rs. 20,90,804/-
The Ld. CIT(A) erred in rejecting the contention of the appellant that such disallowance of expenditure has resulted in the enhancement of the gross total income which otherwise is allowed as deduction u/s. 80IB(11A)."
3. During the course of appellate proceedings before us, the ld. counsel has submitted that ground no. 1 is not pressed, therefore, the same stands dismissed. Regarding second ground of appeal, the ld. counsel has brought to our notice that similar issue on identical fact in the preceding assessment year in the case of the assessee itself has been adjudicated by the ITAT, Ahmedabad in favour of the assessee. The ld. counsel has also filed copy of ITA No. 679/Ahd/2017 dated 06-02-2019. With the assistance of ld. representatives, we have gone through the above cited judicial pronouncement of the Co-ordinate Bench of the ITAT and noticed that the identical issue on similar fact has been decided in favour of the assessee after following the decision of ITAT Ahmedabad in ITA No. 2662/Ahd/2015 in assessee's own case dated 07-06-2018. The ld. departmental representative is fair enough not to contradict the above cited finding of the ITAT vide ITA No. 679/Ahd/2017 2019 dated 6th Feb, 2019 on the identical issue on similar facts after following the decision of ITAT in the case of assessee itself vide ITA No. 2662/Ahd/2015 dated 7th June, 2018 decided in favour of the assessee. Relevant part of the decision is reproduced as under:-
I.T.A No. 2251/Ahd/2017 A.Y. 2013-14 Page No 3Manpasand Beverages Ltd. vs. Dy. CIT "9. We have heard the rival contentions and perused the materials available on record. There is no ambiguity that the assessee is eligible for deduction u/s 80IB (11 A) of the Act. Therefore, the disallowance made u/s 40A(3), 43B of the Act relating to the business activity would be eligible for deduction under Chapter-VIA as per the CBDT Circular No. 37/2016 dated 02.11.2016. 9.1 We also find that in the identical facts & circumstances, the Tribunal in the own case of the assessee decided the issue in favour of the assessee in ITA No. 26627Ahd/2015 vide order dated 7- 6-2018. The relevant extract of the order is reproduced as under:-
"4. Ground no.4 concerns corresponding deduction u/s. 80IB(11A) on the portion of the eligible business profit enhanced on account of disallowances under s. 40A(3) of Rs.30,000/-. Similarly, ground no.5 concerns enhanced deduction under s.80IB(l 1A) owing to increase in eligible profits in view of the disallowances made under s.43B amounting to Rs.42,07,953/-. It is the case on behalf of the assessee that the assessee is eligible for corresponding deduction under s.80IB(l1A) on account of disallowances made in the assessment 40A(3) and 43B of the Act since the eligible profit stood enhanced due to such disallowance.
5. As submitted on. behalf of the assessee, we find that CBDT has addressed the aforesaid issue in favour of the assessee as per its Circular no.37/2016 dated 2nd November, 2016. As per the aforesaid circular, the Board has accepted the proposition that disallowances so made under s.40A(3), 43B etc. of the Act related to business activity would be eligible for chapter VI-A deduction in view of the enhancement of the profits of the eligible business. In view of the CBDT Circular, the controversy stands settled in view of the assessee. Thus, ground nos. 4 & 5 of the assessee are allowed. "
9.2 The Learned DR before us has not brought anything on record contrary to the argument advanced by the Learned AR.
9.3 Therefore we hold that the assessee is eligible for deduction on the enhanced income on account of the addition of certain items as discussed above. Therefore we reverse the order of authorities below and direct the AO to delete the addition made by him. Hence, the ground of appeal of the assessee is allowed."
Considering the above facts and finding of the Co-ordinate Bench of the ITAT adjudicated in favour of the assessee on identical facts on similar issue, this ground of the appeal is allowed.
4. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 15-11-2019 Sd/- Sd/-
(RAJPAL YADAV) (AMARJIT SINGH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad : Dated 15/11/2019
I.T.A No. 2251/Ahd/2017 A.Y. 2013-14 Page No 4
Manpasand Beverages Ltd. vs. Dy. CIT
आदेश क त ल प अ े षत / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.
By order/आदेश से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण,
अहमदाबाद