9911796707
TMI Blog2023 (8) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [ 2016 (6) TMI 381 - GUJARAT HIGH COURT] which has followed M/s. India Gelatine and Chemicals Ltd. [ 2015 (2) TMI 808 - GUJARAT HIGH COURT] Thus we are of the considered view that income chargeable to tax has not escaped assessment and the reopening of assessment by issuing notice u/s. 148 is not sustainable in law. Disallowance u/s. 43B deleted by CIT(A) by following case of Rathi Graphics Technologies Ltd [ 2015 (8) TMI 376 - DELHI HIGH COURT] and held that it is not a case where the interest liability has been converted into a loan or borrowing or debenture, where the liability to pay is deferred to a future date. This is a case of complete extinguishment of liability. Therefore the said conversion of interest into shares should be taken as actual payment u/s. 43B and thereby Ld. CIT(A) deleted the additions correctly - Decided against revenue. - Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri M.J. Shah, A.R. And Shri Rushin Patel, A.R. For the Revenue : Shri Sudhendu Das, CIT-DR ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER: - This appeal is filed by the Revenue as against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T tax was already paid by the assessee, during the original assessment proceedings itself. 3. Aggrieved against the reassessment order, the assessee filed an appeal both on reopening of assessment as well as on merits of the case. The Ld. NFAC dismissed the ground on reopening of assessment, however on merits of the case deleted the additions made u/s. 40(a)(i) of Rs. 4,72,50,695/- as well as u/s. 43B of Rs. 7,60,75,000/- and partly allowed the assessee appeal observing as follows: .5.3 Ground No. 3: This ground is regarding the disallowance u/s 438 on account of issuance of equity shares. The assessee has liquidated interest recompense amounting to Rs. 1521.51 Lakh by cash payment of Rs. 760.75 Lakh and by issue of equity shares for the balance amount of Rs. 760.75 Lakh to the lenders. The AO held that Rs. 760.75 Lakh is not actually paid by the assessee but the interest liability has been discharged by issuing shares to the lenders. He held that this interest component is not allowed within the ambit of section 43B of the Act. He has relied on the ITAT, Kolkata Bench decision in the case of Glittek Granites Ltd. The appellant argues that its case is not covered under 43B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income u/s 139 for A.Y. 2011-12 on 29.09.2011, declaring a total income of Rs. Nil/- (Loss of Rs. 1,09,53,204/-) under the normal provisions and Book Profit u/s 115JB of Rs. 15,28,44,072/- under the MAT provisions. Since tax under the MAT provisions was higher, tax of Rs. 3,04,62,588/- was paid as per MAT provisions. A copy of the ITR acknowledgement along with computation of total income is attached herewith at pages 25 to 29. 4. It can be observed on the last page (page no.11) of the reassessment order u/s 147 dated 30.12.2016 that, after making additions on the issues for which reopening was done, the ultimate amount of tax remains to be Rs. 3,04,62,588/- under the MAT provisions on the Book Profit u/s 115JB of Rs. 15,28,44,072/-. 5. It is therefore, humbly submitted that, without prejudice to the contentions on merits of the additions made by the ld. Assessing Officer, even if the entire additions were to be sustained, there would be no addition to the tax liability of the Respondent and the Respondent would still be governed by the MAT provisions and be taxed on the book profit u/s 115JB. In this view of the matter, the question of any income having escaped assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciated that all prayers in the appeal may be allowed by the Commissioner (Appeals), however, some of the contentions of the appellant may not have appealed to the Commissioner. When such an order of the Commissioner is at large before the Tribunal, the respondent before the Tribunal would be entitled to defend the order of the Commissioner on all grounds including on grounds held against him by the Commissioner without filing an independent appeal or cross-objection. 12. Rule 27 of the Rules is akin to Rule 22 Order XLI of the Civil Procedure Code. Sub-rule (1) provides that any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been decided in his favour; and may also take any cross-objection to the decree which he could have taken by way of an appeal. In case of Virdhachalam Pillai v. Chaldean Syrian Bank Ltd. AIR 1964 SC 1425 in context of the said Rule the Supreme Court observed as under: 32. Learned Counsel for the appellant raised a short preliminary objection that the learned Judges of the High Court having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in holding that the assessee having not filed cross-objection against findings adverse to the assessee in the order of Commissioner (Appeals), the said findings had become final and remained unchallenged. The Tribunal apparently lost sight of the fact that the assessee had succeeded before the Commissioner (Appeals). The appeal had been allowed and the penalty levied by the assessing officer deleted in entirety. In fact, there was no occasion for the assessee to feel aggrieved and hence, it was not necessary for the assessee to prefer an appeal. The position in law is well settled that a cross objection, for all intents and purposes would amount to an appeal and the cross objector would have the same rights which an appellant has before the Tribunal. 18. Section 253 of the Act provides for appeal to the Tribunal. Under sub-section (1), an assessee is granted right to file an appeal; under sub-section (2), the Commissioner is granted a right to file appeal by issuing necessary direction to the assessing officer; sub-section (3) prescribes the period of limitation within which an appeal could be preferred. Section 253(4) of the Act lays down that either the assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the assessee raised additional substantial question of law and in answer to the same, by the Hon ble Bombay High court are as follows: ..5. After these appeals were heard for some time, we were satisfied that these appeals involve an additional substantial question of law. Accordingly, by our order dated 30th March 2021, we framed the additional substantial question of law and adjourned the matter to enable the learned counsel for the parties to address us on such additional substantial question of law. The additional substantial question of law framed by us reads as follows:- Whether in the facts and circumstances of the present case, it was open to the appellant/assessee to have supported the orders of the Commissioner (Appeals), based on the ground that the jurisdictional parameters prescribed under section 153C of the I.T. Act were not fulfilled, even without the necessity of filing any cross objections ? . 29 .He submitted that this was an issue of law and therefore, the ITAT should have permitted the assessees to raise this issue even without the necessity of filing any cross-objections. He referred to Rule 27 of the Appellate Tribunal R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 crores. Ld. Counsel further brought to our notice to the tax calculation, even under the reassessment order passed by the Assessing Officer, wherein tax payable under the normal provisions was Rs. 2,49,35,200/- only after making the disallowances u/s. 40(a)(i) and u/s. 43B of the Act but whereas the assessee had already paid MAT tax of Rs. 3.04 crores. Therefore the entire reassessment proceeding itself is invalid as there is no escapement of income assessable to tax. 8.1. In support of the same, the Ld. Counsel relied upon Jurisdictional High Court judgment in the case of Motto Tiles (P.) Ltd. Vs. ACIT reported in (2016) 73 taxmann.com 176 wherein it was held as follows: Where assessee-company incurred loss and paid tax on book profit computed under MAT provision and it was found that after making proposed addition to F income, assessee would still be governed by provisions of section 115JB and be assessed on same book profit, there would be no excess tax liability under MAT provision, reassessment could not be initiated. . .11. Insofar as the second contention raised on behalf of the petitioner is concerned, the controversy stands squarely concluded b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have given our thoughtful consideration and perused the materials available on record. It is an admitted fact as per the Return of Income filed by the assessee for the Assessment Year 2011-12 resulting in a loss of Rs. 1.09 crores under the normal provisions of the Act and Book Profit u/s. 115JB of the Act of Rs. 15.28 crores and the assessee paid the MAT tax of Rs. 3,04,62,588/-. Pursuant to the Ld. CIT(A) order, against the above assessment order which has resulted in a revised loss of Rs. 4.32 crores and no change in the computation of Book Profit u/s. 115JB of the Act. When the re-assessment was done by the Assessing Officer, the resultant tax computation under the normal provision is Rs. 7.5 crores and Income Tax thereon is Rs. 2,49,35,200/-, whereas the MAT tax remain as Rs. 3,04,62,588/-. Even in that situation, there is no tax liability in the hands of the assessee since the MAT tax was higher than the normal computation of tax, thereby it appears the reassessment itself is invalid, since there is no income chargeable to tax has escaped assessment. This view of ours is supported by the Jurisdictional High Court judgment in the case of M/s. Motto Tiles (P.) Ltd. (cited sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
