SHIBIR INDIA LIMITED,KOLKATA vs. ITO, WARD - 1(4), KOLKATA, KOLKATA

It emerges at the outset that although assessee had raised his substantive ground No. 2(a) & (b) challenging correctness of sec.115JB book profit addition in respect of depreciation as per Income Tax Act and Companies Law qua extra-ordinary items Shibir India Ltd. Vs. ITO Wd-1(4), Kol. Page 2 including prior period expenses debited in the profit and loss account involving sums of ₹3,40,855 and ₹5,32,514; respectively, the CIT(A)’s order under challenge has nowhere adjudicated the same. Learned authorized representative has invited our attention to the assessee’s additional substantive grounds as well as a compilation chart indicating mistakes in the CIT(A)’s order regarding u/s. 14A r.w.s. 8D(ii) disallowance of proportionate interest and administrative expenses under Rule 8D(iii) involving figure(s) of ₹30,47,866/- and ₹8,50,306/- as well as computation of book profits u/s. 115JB regarding the said aggregate sum of ₹38,98,573/-. The said chart further indicates that the CIT(A) deleted the former head of Rule 8D disallowance and partly allowed the latter one on the one hand and he also seems to have actually sustained the administrative expenditure disallowance in his findings.

Coming to the book profit issue, it emerges that the CIT(A) wrongly reproduced assessee’s ground 2(a) & 2(b) in page 11 of his lower appellate order but committed mistake in incorporating figures of ₹30,47,867/- in place of ₹38,98,573/- than the foregoing correct sums. We further find that although the CIT(A) granted relief, he adopted the former figure of sec. 14A r.w.s. Rule 8D disallowance than the correct one of the latter sum. Coupled with this, the assessee’s twin grounds on both depreciation and prior period expenses also remain un-adjudicated. There is no rebuttal to all these factual aspects from the Revenue side.

We have given our thoughtful to rival pleadings. We have sufficiently indicated the fact not only the CIT(A) having committed mistakes in adopting correct figures relating to the twin head(s) of sec. 14A r.w.s. Rule 8D disallowance the normal as well as book profit computation but also he has not adjudicated the assessee’s corresponding ground 2 (a) & 2 (b) pleaded in the lower appeal. We therefore deem it appropriate to restore all the issues raised in the instant appeal back to the CIT(A) for afresh adjudication as per law. We make it clear that learned authorized representative appearing at assessee’s behest stated at the bar that the taxpayer would have no objection in case CIT(A) is directed to decide the entire issue of sec. 14A r.w.s. 8D Shibir India Ltd. Vs. ITO Wd-1(4), Kol. Page 3 disallowance afresh as per law. We therefore accept the assessee’s all substantive grounds raised in the instant appeal for statistical purposes.