JUST TEXTILES LTD, MUMBAI v. ACIT CIR 10(3), MUMBAI

ITA 4596/MUM/2010 | 2007-2008
Pronouncement Date: 06-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 459619914 RSA 2010
Assessee PAN AAACJ1221D
Bench Mumbai
Appeal Number ITA 4596/MUM/2010
Duration Of Justice 1 year(s) 1 month(s) 3 day(s)
Appellant JUST TEXTILES LTD, MUMBAI
Respondent ACIT CIR 10(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 06-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted I
Tribunal Order Date 06-07-2011
Assessment Year 2007-2008
Appeal Filed On 03-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI BEFORE SHRI T.R. SOOD A.M. AND SHRI R. S. PADVEKAR J.M. I.T.A. NO.: 4596/MUM/2010 ASSESSMENT YEAR : 2007-08 M/S. JUST TEXTILES LTD. DEVIDAYAL COMPOUND KANJUR VILLAGE MARG KANJUR MARG (E) MUMBAI-400 043 PAN NO: AAACJ1221D VS. ACIT CIRCLE 10 (3) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH JOSHI RESPONDENT BY : SHRI SANJIV DUTT ORDER PER T.R. SOOD (AM) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 19.04.2010 OF COMMISSIONER OF INCOME TAX (APPEALS)- 22 MUMBAI AND RELATES TO THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF DEFERRED TAX LIABILITY PROVISION OF RS.2 03 05 670/ - IN COMPUTATION OF THE BOOK PROFITS UNDER THE MAT PROVI SION AS PER SECTION 115JB OF THE INCOME TAX ACT 1961 WITHOUT A PPRECIATING THE FACTS AND CIRCUMSTANCE OF THE CASE. 2. THE LEARNED CIT(A) & LEARNED ASSESSING OFFICER E RRED IN CHARGING THE INTEREST U/S.234B OF THE INCOME TAX AC T 1961 WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO: 4596/M/2010 M/S. JUST TEXTILES LTD. 2 3. GROUND NO.1 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSE SSEE HAD FAILED TO ADD BACK THE AMOUNT OF FBT AND DEFERRED TAX TO THE BOOK PROFIT. IN RESPONSE TO THE QUERY IT WAS SUBMITTED THAT THE SAME MAY BE ADD ED TO THE BOOK PROFIT. HOWEVER THE ISSUE WAS AGITATED BEFORE THE LD. CIT(A ) WHO CONFIRMED THE ACTION OF THE A.O. 4. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE FAIRL Y CONCEDED THAT THIS GROUND MAY BE DECIDED AGAINST THE ASSESSEE IN VIEW OF THE RETROSPECTIVE AMENDMENT OF THE ACT. 5. ON THE OTHER HAND THE LD. DR SUPPORTED THE ORDE R OF THE LD. CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT CLAUSE (H) WAS INSERTED BY EXPLANATION TO SECTION 115 JB BY THE FI NANCE ACT 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.2001. THE CLAUSE (H ) READS AS UNDER :- H) THE AMOUNT OF DEFERRED TAX AND THE PROVISION TH EREFORE 7. THE ABOVE CLAUSE WHICH WAS INSERTED BY THE FINAN CE ACT 2008 IS MANDATED TO HAVE RETROSPECTIVE FROM 01.04.2001 THE REFORE IN VIEW OF THE AMENDED LAW THE DEFERRED TAX HAS TO BE ADDED TO TH E BOOK PROFIT. ACCORDINGLY WE CONFIRM THIS ADDITION. 8. GROUND NO.2 AFTER HEARING BOTH THE PARTIES WE FIND THAT INTERE ST U/S. 234B HAS BEEN LEVIED. THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT NO SUCH INTEREST COULD HAVE BEEN LEVIED WHEN THE TAX W AS DETERMINED U/S. 115 JB I.E. MAT. IN THIS REGARD HE RELIED ON THE DECIS ION OF THE TRIBUNAL IN THE CASE OF SUN PETROCHEMICALS PVT. LTD. V. ITO IN ITA NO: 1010/AHD./2009 WHICH WAS PUBLISHED IN BOMBAY CHARTERED ACCOUNTANT JOURNAL (COPY FILED). HE ALSO RELIED ON THE DECISION OF HON'BLE MADRAS HI GH COURT IN THE CASE OF CIT VS. REVATHI EQUIPMENT LTD. IN 298 ITR 67. ITA NO: 4596/M/2010 M/S. JUST TEXTILES LTD. 3 9. AFTER CONSIDERING THE RIVAL SUBMISSION WE FIND T HAT IN CASE OF SUN PETROCHEMICALS PVT. LTD. V. ITO (SUPRA) IT WAS HELD THAT WHEN THE LIABILITY OF TAX ARISES BECAUSE OF THE RETROSPECTIVE AMENDMENT I N LAW THEN INTEREST IS NOT PAYABLE. OTHERWISE ALSO THE ASSESSEE COULD NOT HAVE FORESEEN THE RETROSPECTIVE AMENDMENT AND PAID ADDITIONAL TAX. TH EREFORE WE ARE OF THE VIEW THAT INTEREST U/S. 234B IS NOT CHARGEABLE. ACC ORDINGLY WE DIRECT THE AO NOT TO CHARGE INTEREST U/S. 234B IN THIS CASE. 10. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH JULY 2011 SD/- SD/- ( R. S. PADVEKAR ) ( T. R. S OOD ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT: 06/07/2011 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. 4. CIT (A) 5. THE DR I - BENCH ITAT MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI ROSHANI