ACIT, NEW DELHI vs. M/S SPAN HOLDING PVT. LTD.,, NEW DELHI

Heard both the parties at length. Case files perused.

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 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 793 & 787/Del/2017for this precise reason subject to all just exceptions.

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.

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.

All other pleadings on merits herein have been rendered academic.

This leaves us with the assessee’s remaining appeal 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.

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 7 | P a g e & 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:

C.O. No.22/Del/2022 M/s. Span ACIT Rejected as not Holdings. Pvt. pressed Ltd.

C.O. No. 23/Del/2022 M/s. Span ACIT Rejected as not Holdings. Pvt. pressed Ltd.

C.O. No. 24/Del/2022 M/s. Span ACIT Rejected as Holdings Pvt. pressed Ltd.

ITA No.784/Del/2017 ACIT M/s. Span Holding Dismissed Pvt. Ltd. 8 | P a g e & 379/Del/2017 782 to 787/De/2017; 793/Del/2017; C.O. Nos. 18 to 24/Del/2022 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.