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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
This appeal is filed by the Dy. Commissioner of Income Tax, Central Circle-6(4), Mumbai (the learned Assessing Officer) for A.Y. 2012-13 against the order of the learned Commissioner of Income-tax (Appeals)-54 [learned CIT (A)] dated 20th October, 2021. The learned Assessing Officer has raised the following grounds of appeal:-
1. “On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition on account of unexplained expenditure of Rs.70,000/-, the details of which were found in the Cash Transaction Record maintained in an excel sheet by Shri Ashok
2. On the facts and in the circumstances of the case and in law, whether the learned CIT(A) is justified in relying upon the decision of the Hon'ble Income Tax Settlement Commission under section 245D(4) of the Income tax Act, 1961, dated 30.04.2019, in the case of 16 other Indiabulls Group entities which has been challenged before the Hon'ble High Court by the revenue, in Writ Petition No. 330 of 2020, as these 16 entities of the Indiabulls Group had not made true and full disclosure before the Hon'ble Commission?"
3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in holding that all the entries of the Cash Transaction Record has been offered by the 16 entities of the Indiabulls Group, which had filed applications before the Hon'ble Income Tax Settlement Commission, without quantifying and identifying, which of the 16 entities, who were before the Hon'ble Income tax Settlement Commission offered the income relevant to the entries found in the name of the assessee."
4. On the facts and in the circumstances of the case and in law, whether the learned CIT(A) is justified in allowing the deduction of education cess of Rs.2,87,94,024/- from the total income of the assessee without considering the fact that income tax includes surcharge and education cess?"
6. On the facts and in the circumstances of the case and in law, the learned CTT(A) has erred in allowing the deduction of education cess of Rs.2,87,94,024/- from the total income of the assessee, relying upon the decision of the Hon'ble Jurisdictional High Court in the case of Sesa Goa Ltd. vs. JCIT reported in 423 ITR 426 (Bom), without appreciating that the same is pending for adjudication before the Hon'ble Supreme Court of India.
7. On the facts and in the circumstances of the case and in law, whether the learned CIT(A) is justified in allowing the deduction of education cess of Rs.2,87.94,024/- from the total income of the assessee, without appreciating that the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT, reported in [2006] 157
The appellant craves to leave, to add, to amend and / or to alter any of the ground of appeal, if need be.”
2. The assessee is a company engaged in housing and finance and other ancillary services. Return of income was filed on 29th September, 2012 at ₹304,69,86,660/-. It was revised at the same figure on 27th March, 2014. Assessment under Section 143(3) of the Income-tax Act, 1961 (the Act) also concluded at the same income. Subsequently, search took place on 13th July, 2016 on India Bulls Group and consequently, notice under Section 153A of the Act was issued on 25th July, 2017. The assessee filed return of income on 13th August, 2017 at ₹304,69,86,660/-. During the course of assessment proceedings, the learned Assessing Officer made an addition of ₹70,000/- as unaccounted expenditure under Section 69C of the Act. Consequent to that, assessment order under Section 143(3) read with Section 143A of the Act was passed on 18th May, 2018 at the total income of ₹304,70,98,788/-.
Assessee preferred the appeal before the learned CIT (A). The learned CIT (A) deleted the addition of ₹70,000/- following the decision of learned CIT (A) for A.Y. 2011-12. Before him, assessee raised an additional ground of appeal in respect of deduction of education cess of ₹2,87,94,024/-. The learned CIT (A) admitted the same
We have heard the rival contentions. We have also perused the orders of the lower authorities. Ground no.1 to 3 relates to the addition of ₹70,000/- as unexplained expenditure. We find that identical issue arose in the case of the assessee for A.Y. 2011-12, the learned CIT (A) has deleted the identical addition, the facts in paragraph no. 7.5 of the assessment order shows that the above entries on which the addition has been made were duly recorded in the regular books of account of the assessee and assessee also produced the copies of the relevant books of account showing the withdrawals and deposits. The learned Assessing Officer did not believe the same because of the difference in narration in the bank account. We find that there are identical expenditure which are held to be unexplained expenditure for seven years which has been deleted by the learned CIT (A). Further, it was also the claim of the assessee that the transactions have already been offered as income before the settlement commission. The learned CIT (A) deleted this addition for the reason that the amount has already been considered in income of the assessee and other entities before the settlement commission. In view of this, we do not find any infirmity in the order of the learned CIT (A) in deleting the addition. Merely because the order of the settlement commission has been challenged before the Hon'ble High Court, unless that order is reversed, we do not find any
Grounds no. 4 to 7 of the appeal is with respect to the allowability of deduction of education cess. We find that in view of amendment by introduction of explanation 3 inserted by Finance Act, 2022 with retrospective effect from 1st April, 2005, assessee is not entitled for deduction of education cess. Accordingly, grounds no. 4 to 7 of the appeal is allowed.
In the result, appeal filed by the learned Assessing Officer is partly allowed.
Order pronounced in the open court on 22.06.2022.