Income Tax Appellate Tribunal - Ahmedabad
Nirma Chemical Works Ltd.,, Ahmedabad vs Acit., Cent.Circle-1(1),, Ahmedabad on 11 November, 2016
आयकर अपीलीय अिधकरण,
अिधकरण अहमदाबाद यायपीठ 'ए' अहमदाबाद।
IN THE INCOME TAX APPELLATE TRIBUNAL
"A" BENCH, AHMEDABAD
BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND
SHRI MANISH BORAD, ACCOUNTANT MEMBER
SN ITA No. AY Appellant Respondent
1 2169/Ahd/2008 2005-06 DCIT, Nirma Chemical Works Ltd,
Central Circle-1(1), Nirma House,
Ahmedabad Ashram Road, Ahmedabad
PAN : AAACN 5353 L
2 2282/Ahd/2008 2005-06 Assessee Revenue
3 2170/Ahd/2011 2003-04 Assessee Revenue
4 2372/Ahd/2011 2003-04 Revenue Assessee
Revenue by : Shri R.I. Patel, CIT-DR
Assessee by : Shri S.N. Soparkar, AR
सुनवाई क तारीख/ Date of Hearing : 10/11/2016
घोषणा क तारीख / Date of Pronouncement: 11/11/2016
आदेश/O R D E R
PER R.P. TOLANI, JUDICIAL MEMBER:-
ITA Nos. 2169/Ahd/2008 and 2372/Ahd/2011 are the appeals by the
Revenue directed against the orders of CIT(A)-II, Ahmedabad dated 27.03.2008 and CIT(A)-XI, Ahmedabad dated 15.07.2011 for AYs 2005-06 and 2003-04 respectively. ITA Nos. 2282/Ahd/2008 and 2170/Ahd/2011 are the appeals by the assessee directed against the orders of CIT(A)-II, Ahmedabad dated 27.03.2008 and CIT(A)-XI, Ahmedabad dated 15.07.2011 for AYs 2005-06 and 2003-04 respectively. This bunch of appeals was heard together since common issues are involved and are disposed of by this consolidated order for the sake of convenience.
ITA No. 2170/Ahd/2011 : AY 2003-04 : Assessee's appeal2. The solitary ground raised in assessee's appeal for AY 2003-04 reads as under:-
"In law and in facts and circumstances of the Appellant company's case, the learned CIT(A) has grossly erred in holding that appeal does not lie on the ITA Nos. 2169, 2282/Ahd/2008 & 2170 & 2372/Ahd/2011 Assessee : Nirma Chemical Works Ltd AY : 2005-06 & 2003-04 2 issue of assessing income of Rs.2,58,44,224 on investment of OFCPNs of Nirma Industries Ltd."
2. The ld. Counsel for the assessee, at the outset, contends that the issue in question is covered in favour of the assessee in ITAT's order dated 15.02.2013 in its own case for AY 2002-03, by following observations:-
"4.4 We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. We find force in the submissions of ld. Counsel for the assessee that the issue has been already decided by ITAT in assessee's own case for AY 2002-03 in ITA No.1244/Ahd/2006, wherein the Tribunal, following the decision in the case of Kishan Discretionary Family Trust vs. ACIT in ITA No. 1850/Ahd/2007 dated 02.11.2007, held that the assessee has right to adopt the changed system of accounting and by changing the system of accounting from mercantile to cash was a bona fide change. Respectfully following ITAT judgment in assessee's own case (supra), we uphold the order of the ld. CIT(A) in this regard. Accordingly grounds in this behalf and the appeal of the Revenue are dismissed."
2.1 The ld. Counsel submitted that the issue being same and the facts and circumstances and the investment in OFCPNs of Nirma Industries Ltd being same, the assessee's ground deserved to be allowed.
2.2 Ld. Departmental Representative is heard.
2.3 We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. We find merit in the contention of the ld. Counsel for the assessee that this issue is squarely covered in favour of the assessee by Tribunal's decision in assessee's own case for AY 2002-03 in ITA No.1244/Ahd/2006. This ground of the assessee's appeal is accordingly allowed.
ITA No. 2282/Ahd/2008 : AY 2005-06 : Assessee's appeal3. First ground raised by the assessee in its appeal is general in nature.
ITA Nos. 2169, 2282/Ahd/2008 & 2170 & 2372/Ahd/2011 Assessee : Nirma Chemical Works Ltd AY : 2005-06 & 2003-04 3 3.1 Second ground is with regard to confirming the disallowance of Rs.8,61,050/- u/s 14A of the Act out of interest expenses.
3.2 Third ground is with regard to confirming disallowance of Rs.5,23,116/- u/s 14A of the Act out of administrative expenses and payment to employees.
3.3 Forth ground is with regard to confirming disallowance of Rs.29,06,755/- out of interest expenses u/s 14A.
3.4 The ld. Counsel for the assessee, at the outset, contends that the ITAT in assessee's own case for AYs 2004-05 in ITA Nos. 2281/Ahd/2008 has set aside the issue back to the file of Assessing Officer for verification, by following observations:-
"6.6 We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. It emerges from the record that the assessee has placed on record a revised working of the interest expenses of Nirman Soaps & Detergents Pvt Ltd and Navin Detergent Pvt Ltd, which requires to be verified at the Assessing Officer's level alongwith other relevant facts and circumstances of the case alongwith the case law relied by the assessee in the case of UTI Bank Ltd (supra). Therefore, in the interest of substantial justice, we set aside this issue to the file of the ld. Assessing Officer with a direction to decide the same afresh in accordance with law, after providing due opportunity of being heard to the assessee. Thus, these grounds are allowed for statistical purposes.
7. Ground No.4, which relates to disallowance of interest expenses of Rs.1,02,74,427/- u/s 14A, is also similar to the issue we decided above in ground Nos. 3 & 4. For the reasons stated above, this issue is also restored back to the file of the ld. AO for decision afresh in accordance with law and after providing due opportunity of being heard to the assessee. This ground of assessee's appeal is thus allowed for statistical purposes."
Respectfully following the decision of Tribunal in assessee's own case for AY 2004-05, these issues are set aside to the file of the AO with the ITA Nos. 2169, 2282/Ahd/2008 & 2170 & 2372/Ahd/2011 Assessee : Nirma Chemical Works Ltd AY : 2005-06 & 2003-04 4 similar direction. Thus, Ground Nos. 2 to 4 are allowed for statistical purposes.
3.5. Ground No.5 regarding interest u/s 234B, 234D and 244A of the Act is mandatory though consequential.
3.6. Ground No.6 is not pressed as the suitable relief has been given by the AO by a rectification order u/s 154 dated 09.07.2008. This ground is accordingly dismissed as not pressed.
ITA No. 2169/Ahd/2008 : AY 2005-06 : Revenue's appeal ITA No. 2372/Ahd/2011 : AY 2003-04 : Revenue's appeal4. In these appeals, the grounds are to the effect that the CIT(A) erred in deleting the addition on account of notional interest income on investments in DDB/NCD/REC Bonds etc, relying on the ITAT judgement in the case of Kisan Disc. Family Trust & others in ITA No.1850/Ahd/2007 dated 02.11.2007.
4.1 Ld. Counsel for the assessee contends that this issue has already been decided in favour of the assessee by the Tribunal vide its order dated 15.02.2013 in ITA No.1244/Ahd/2006 for AY 2002-03.
4.2. Ld. Departmental Representative is heard.
4.3 We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. We find merit in the contention of the ld. Counsel for the assessee that this issue is squarely covered in favour of the assessee by Tribunal's decision in assessee's own case for AY 2002-03 in ITA No.1244/Ahd/2006 which is ITA Nos. 2169, 2282/Ahd/2008 & 2170 & 2372/Ahd/2011 Assessee : Nirma Chemical Works Ltd AY : 2005-06 & 2003-04 5 already reproduced hereinabove while dealing with assessee's appeal in ITA No.2170/Ahd/2011 for AY 2003-04. Respectfully following the same, we dismiss both the Revenue's appeals.
5. In the result, assessee's appeal for AY 2003-04 is allowed, assessee's appeal for AY 2005-06 is partly allowed for statistical purposes and Revenue's appeals are dismissed.
Order pronounced in the Court on 11th November, 2016 at Ahmedabad.
Sd/- Sd/-
(MANISH BORAD) (R.P. TOLANI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 11/11/2016
*Biju T., Sr.PS
आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2.
यथ / The Respondent.
3. संबंिधत आयकर आयु / Concerned CIT
4. आयकर आयु (अपील) / The CIT(A)
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदेशानुसार/ BY ORDER, TRUE COPY उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad