ACIT, NEW DELHI vs. M/S SPAN HOLDING PVT. LTD.,, NEW DELHI
Facts
This batch of sixteen cases involves M/s. Span Holding Pvt. Ltd. for various assessment years, many arising from a search action on 16.01.2013. Several Revenue appeals were dismissed due to the tax effect being below the Rs. 60 lakh threshold stipulated by CBDT Circular 9/2024, leading to the assessee not pressing related cross-objections. The central issue for other assessments was their validity, as additions were allegedly made without incriminating material, contrary to the Supreme Court's ruling in *PCIT Vs. Abhisar Buildwell Pvt. Ltd.* Additionally, one appeal challenged Section 14A disallowance and the lack of Section 153D approval for a regular assessment.
Held
The Tribunal dismissed the Revenue's appeals where the tax effect was below the monetary limit set by CBDT Circular 9/2024. It rejected the assessee's cross-objections related to these dismissed appeals as 'not pressed'. For several assessment years, the Tribunal accepted the assessee's additional legal ground, quashing the impugned assessments, as no additions were found to be based on incriminating material from the assessee's own search, relying on the *Abhisar Buildwell* judgment. However, for AY 2013-14, the Tribunal dismissed the assessee's appeal against Section 14A disallowance, upholding the AO's computation under Rule 8D, and rejected the additional ground regarding Section 153D approval as it was a regular assessment, not an unabated search assessment.
Key Issues
1. Whether assessments made without incriminating material found during a search are sustainable under Section 153A. 2. Applicability of CBDT circulars for dismissing appeals based on low tax effect. 3. Correctness of disallowance made under Section 14A read with Rule 8D. 4. Requirement of Section 153D approval for regular assessments.
Sections Cited
Section 153A, Section 143(3), Section 14A, Rule 8D, Section 153D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’ NEW DELHI BEFORESHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.455/Del/2017 Assessment Year: 2010-11 With ITA No.379/Del/2017 Assessment Year: 2013-14 M/s. Span Holding Pvt. Vs. ACIT, Central Circle, Ltd., New Delhi 220, Okhla Industrial Estate, Phase-III, New Delhi PAN :AAACS0294H (Appellant) (Respondent) With ITA No.782/Del/2017 Assessment Year:2007-08 With ITA No.783/Del/2017 Assessment Year:2008-09 With ITA No.784/Del/2017 Assessment Year: 2009-10 With ITA No.785/Del/2017 Assessment Year: 2010-11 With ITA No.786/Del/2017 Assessment Year: 2011-12 With ITA No.787/Del/2017 Assessment Year:2013-14 With ITA No.793/Del/2017 Assessment Year:2012-13
ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
ACIT, Central Circle, Vs. M/s. Span Holding Pvt. Ltd., New Delhi 220, Okhla Industrial Estate, Phase-III, New Delhi PAN :AAACS0294H (Appellant) (Respondent) With C.O. Nos.18 to 24/De/2022 (Arising out of ITA Nos.782 to 787 & 793/Del/2017 Assessment Year: 2013-14 Vs. ACIT, Central Circle, M/s. Span Holding Pvt. Ltd., 220, Okhla Industrial Estate, New Delhi Phase-III, New Delhi PAN: AAACS0294H (Appellant) (Respondent)
Assessee by Sh. M.P. Rastogi, Advocate Sh. Deepak Malik, Adv. Sh. Shivam Malik, Adv. Department by Ms. Jaya Chaudhary, CIT(DR) Date of hearing 17.12.2024 Date of pronouncement 27.12.2024 ORDER PER SATBEER SINGH GODARA, JM The instant batch of sixteen cases pertains to the single assessee herein M/s. Span Holding Pvt. Ltd. All other relevant details, assessment year-wise are read as under: Sl. Appeal No. Appellant Respondent Order Appealed against No. 1. 455/Del/2017 for M/s. Span ACIT, Central CIT(A)-24, New Delhi’s order AY 2010-11 Holding Pvt. Circle-8, New dated 23.11.2016 passed in Ltd. Delhi case no. 63/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 2 | P a g e
ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
379/Del/2017 for M/s. Span ACIT, Central CIT(A)-24, New Delhi’s order AY: 2013-14 Holding Pvt. Circle-8, New dated 23.11.2016 passed in Ltd. Delhi case no. 66/15-16 involving proceedings under Section 153A r.w.s. 143(3) of the Act. 3-4 782/Del/2017 for ACIT, M/s. Span CIT(A)-24, New Delhi’s order AY: 2007-08 Central Holding Pvt. dated 23.11.2016 passed in andC.O.No.18/Del Circle-8, Ltd. case no. 95/15-16 involving /2022 New Dehi proceedings under Section 153A r.w.s. 143(3) of the Act. 5-6 783/Del/2017 for ACIT, M/s. Span CIT(A)-24, New Delhi’s order AY: 2008-09 Central Holding Pvt. dated 23.11.2016 passed in and Circle-8, Ltd. case no. 96/15-16 involving C.O.No.19/Del/20 New Dehi proceedings under Section 22 153A r.w.s. 143(3) of the Act. 7-8 784/Del/2017 for ACIT, M/s. Span CIT(A)-24, New Delhi’s order AY: 2009-10 Central Holding Pvt. dated 23.11.2016 passed in and Circle-8, Ltd. case no. 97/15-16 involving C.O.No.20/Del/20 New Dehi proceedings under Section 22 153A r.w.s. 143(3) of the Act. 9-10 785/Del/2017 for ACIT, M/s. Span CIT(A)-24, New Delhi’s order AY: 2010-11 Central Holding Pvt. dated 23.11.2016 passed in and Circle-8, Ltd. case no. 63/15-16 involving C.O.No.21/Del/20 New Dehi proceedings under Section 22 153A r.w.s. 143(3) of the Act. 11-12 786/Del/2017 for ACIT, M/s. Span CIT(A)-24, New Delhi’s order AY: 2011-12 Central Holding Pvt. dated 23.11.2016 passed in AndC.O.No.22/De Circle-8, Ltd. case no. 64/15-16 involving l/2017 New Dehi proceedings under Section 153A r.w.s. 143(3) of the Act. 13-14 787/Del/2017 for ACIT, M/s. Span CIT(A)-24, New Delhi’s order AY: 2013-14 Central Holding Pvt. dated 23.11.2016 passed in and Circle-8, Ltd. case no. 66/15-16 involving C.O.No.24/Del/20 New Dehi proceedings under Section 22 153A r.w.s. 143(3) of the Act. 15-16 793/Del/2017 for ACIT, M/s. Span CIT(A)-24, New Delhi’s order AY: 2012-13 Central Holding Pvt. dated 23.11.2016 passed in andC.O.No.23/Del Circle-8, Ltd. case no. 65/15-16 involving /2022 New Dehi proceedings under Section 153A r.w.s. 143(3) of the Act.
Heard both the parties at length. Case files perused.
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ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
It emerges during the course of hearing with the able assistance coming from both the parties, and more particularly, the Revenue’s side that it’s three appeals ITA Nos. 786, 793 &787/Del/2017 for assessment years 2011-12; 2012-13 & 2013- 14 involved tax effect of Rs.49,82,180/-; 57,22,778/- and 44,23,311/-, respectively which are less than the minimum tax effect Rs.60 lakhs as prescribed in CBDT’s latest circular 9/2024, dated 17.09.2024 made applicable to all pending appeals as well. We accordingly dismiss the Revenue’s instant appeals ITA Nos.786, 793 & 787/Del/2017for this precise reason subject to all just exceptions. 4. Learned counsel representing assessee is equally fair in not pressing for its cross objections C.O. Nos. 22 to 24/Del/2022, case-wise, respectively. Rejected accordingly. 5. We now proceed to deal with the remaining ten cases i.e. assessee’s ITA Nos.455 & 379/Del/2017& cross objection C.O. Nos. 18 to 21/Del/2017; Revenue’s appeals ITA No. 782 to 785/Del/2017. 6. Mr. Rastogi refers to the assessee’s identical legal grounds raised in all these cases that the corresponding assessment
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ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
herein are not sustainable in law since no addition therein has been made based on incriminating material, which forms a condition precedent as per hon’ble apex court recent landmark decision in PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC). 7. Learned CIT(DR), on the other hand, vehemently objects to the assessee’s instant additional ground that such a recourse could not be allowed to be taken at this belated stage wherein all the relevant facts do not form part of the records. We find no merit in the Revenue’s foregoing technical ground once the assessee’s foregoing legal arguments sought to be canvassed by way of an additional ground go to root of the matter and all the relevant facts are already on record. We thus quote NTPC Vs. CIT (1998), 229 ITR 383 (SC) that this tribunal could indeed admit any such legal ground going to the root of the matter for the purpose of determining correct tax liability of a taxpayer provided all relevant facts form part of the records. We accordingly admit the assessee’s foregoing additional grounds/arguments in very terms.
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ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
Next comes our adjudication reversing the foregoing issue of the validity of the impugned reassessments in light of Abhisar Buildwell Pvt. Ltd. (supra). We are informed that the search herein took place in assessee’s or its group cases on 16.01.2013. Learned CIT(DR)states that there was a yet another similar search action on the very date against M/s. U.K. Paints as well. Ms. Chaudhary’s case accordingly is that the impugned additions made in assessee’s hands are in fact based on the incriminating materials found in the said latter party’s search which to be upheld. 9. We find no substance in the Revenue’s foregoing legal arguments once it has come on record that learned departmental authorities have not made any addition in assessee’s hands based on any seized material in its own search going by Abhisar Buildwell Pvt. Ltd. (supra). We further deem it to clarify that all these are unabated assessments only as on the date of search. We accordingly accept the assessee’s instant legal ground in all these assessment years in very terms. The impugned assessments herein stand quashed therefore.
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ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
All other pleadings on merits herein have been rendered academic. 11. This leaves us with the assessee’s remaining appeal ITA No. 379/Del/2017 wherein it challenges correctness of both the learned lower authorities action making section 14A disallowance of Rs.4,20,703/- relating to it’s exempt income amounting to Rs. 42,03,634/-. We further note that it has also sought to raise an additional ground challenging validity of the impugned assessment itself for want of the prescribed section 153D approval. 12. We wish to make it clear first of all the impugned assessment year 2013-14 involves regular assessment as the date of search herein 28.01.2013 and therefore, the foregoing “unabated” assessment law would not apply herein. This is indeed coupled with the fact that the assessee has also raised the very section 153D approval of substantive ground in it’s corresponding cross objection (supra) wherein it never pressed the same as the Revenue’s appeal was dismissed for involving low tax effect (supra). We thus reject the assessee’s instant additional ground in
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ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
very terms so as to avoid mutual conflict in our findings in very
terms.
Coming to merits of the impugned section 14A disallowance,
learned counsel could hardly pinpoint any illegality or infirmity
therein as the Assessing Officer had adopted the correct figures
for the purpose of computing Rule 8D disallowance involving
three limbs of direct, proportionate interest, administrative
expenditure, respectively. The assessee fails in its instant sole
substantive ground on merits. So is the outcome of main appeal
ITA No. 379/Del/2017.
To sum up, our decision in assessee’s appeals and
Revenue’s appeals istabulated as under:
Sl. Appeal/cross Appellant Respondent Result No. objection no. 1. ITA No.786/Del/2017 ACIT M/s. Span Dismissed Holdings Pvt. Ltd. 2. ITA No.793/Del/2017 ACIT M/s. Span Dismissed Holdings. Pvt. Ltd. 3. ITA No.787/Del/2017 ACIT M/s. Span Dismissed Holdings. Pvt. Ltd. 4. C.O. No.22/Del/2022 M/s. Span ACIT Rejected as not Holdings. Pvt. pressed Ltd. 5. C.O. No. 23/Del/2022 M/s. Span ACIT Rejected as not Holdings. Pvt. pressed Ltd. 6. C.O. No. 24/Del/2022 M/s. Span ACIT Rejected as Holdings Pvt. pressed Ltd. 7. ITA No. ACIT M/s. Span Dismissed 782/Del/2017 Holdings Pvt. Ltd. 8. ITA No.783/Del/2017 ACIT M/s. Span Dismissed Holdings Pvt. Ltd. 9. ITA No.784/Del/2017 ACIT M/s. Span Holding Dismissed Pvt. Ltd. 8 | P a g e
ITA Nos.455 & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022
10 ITA No.785/Del/2017 ACIT M/s. Span Holding Dismissed Pvt. Ltd. 11. ITA No. M/s.Span ACIT Allowed 455/Del/2017 Holding Pvt. Ltd. 12. ITA No. M/s.Span ACIT Dismissed 379/Del/2017 Holding Pvt. Ltd. 13. C.O. No. 18/Del/2022 M/s.Span ACIT Allowed Holding Pvt. Ltd. 14 C.O. No.19/Del/2022 M/s. Span ACIT Allowed Holding Pvt. Ltd. 15. C.O. No.20/Del/2022 M/s. Span ACIT Allowed Holding Pvt. Ltd. 16. C.O. No.21/Del/2022 M/s. Span ACIT Allowed Holding Pvt. Ltd. 15. A copy of this common order be placed in the respective case
files.
Order pronounced in the open court on 27th December, 2024
Sd/- Sd/- (AVDHESH KUMAR MISHRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27th December, 2024. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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