PCIT Vs Electrical And Electronics India Ltd. (Delhi High Court)
The Delhi High Court considered the Revenue’s appeal against the Income Tax Appellate Tribunal’s order dated 18.04.2023 relating to Assessment Year 2011-12. The Tribunal had examined the correctness of the Commissioner of Income Tax (Appeals)’ order dated 13.11.2017 concerning Assessment Years 2010-11 to 2012-13. The dispute related to the deletion of an addition of ₹4,25,00,085 made under Section 69 of the Income Tax Act, 1961 on account of alleged unexplained investments made by the respondent-assessee in the JP Minda Group of companies. The addition in the respondent’s hands had been made only on a protective basis, while the substantive addition had been made in the hands of the JP Minda Group.
The Court noted that the substantive addition in the hands of the JP Minda Group had already been challenged before a coordinate bench in a batch of appeals led by Commissioner of Income Tax (Central)-2 vs. M/s JPM Tools Ltd., which also covered Pr. Commissioner of Income Tax (Central)-2 vs. Jay FE Cylinder Ltd. By judgment dated 26.09.2023, the coordinate bench deleted the substantive addition on merits.
The Revenue submitted that the substantive addition had been deleted based on the decision of the coordinate bench in Commissioner of Income Tax vs. Kabul Chawla, which had subsequently been affirmed by the Supreme Court in Principal Commissioner of Income Tax vs. Abhisar Buildwell. The High Court observed that since the substantive addition had been deleted on merits, the Tribunal had rightly dismissed the Revenue’s appeal because the addition in the respondent’s hands was only protective in nature.
Holding that no substantial question of law arose for consideration, the High Court closed the appeal.
Cases Discussed
- Principal Commissioner of Income Tax vs. Abhisar Buildwell (Supreme Court), 2023 SCC OnLine SC 481
- Commissioner of Income Tax vs. Kabul Chawla (Delhi High Court), (2016) 380 ITR 573
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Allowed, subject to just exceptions.
ITA 598/2023
2. This appeal concerns Assessment Year (AY) 2011-12. Via the instant appeal, the appellant/revenue seeks to assail the order dated 18.04.2023 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”].
2.1. The Tribunal was called upon to examine the sustainability of the order dated 13.11.2017 passed by the Commissioner of Income Tax (Appeals) [in short, “CIT(A)”] concerning AYs 2010-11 to 2012-13.
3. On merits, the issue that was raised before the Tribunal was whether the CIT(A) had erred on facts and in law in deleting the addition made under Section 69 of the Income Tax Act, 1961 [in short, “Act”], on account of unexplained investments made by the appellant/respondent in the JP Minda Group of companies.
3.1 To be noted, the aggregate amount invested was Rs.4,25,00,085/-. Significantly, the addition in the hands of respondent/assessee was made on a protective basis. The substantive addition had been made in the hands of the JP Minda Group.
4. It is not disputed that insofar as the JP Minda Group is concerned, a challenge was laid before a coordinate bench which was the subject matter of the judgment dated 26.09.2023, concerning a bunch of appeals; the lead appeal being ITA 358/2022, titled Commissioner of Income Tax (Central)-2 vs. M/s JPM Tools Ltd.
4.1 In particular, this judgment also covered ITA 360/2022, titled Pr. Commissioner of Income Tax (Central)-2 vs. Jay FE Cylinder Ltd.
5. The sum and substance of the judgment dated 26.09.2023 passed by a coordinate bench was that the substantive addition made in the hands of the JP Minda Group was dropped, albeit, on merits.
6. Mr Sanjay Kumar, learned senior standing counsel, who appears on behalf of the appellant/revenue, correctly points out that the addition was dropped on the basis of a judgment passed by a coordinate Bench of this court in Commissioner of Income Tax vs. Kabul Chawla, (2016) 380 ITR 573.
6.1 To be noted, the said judgment has been affirmed by the Supreme Court in Principal Commissioner of Income Tax vs. Abhisar Buildwell, 2023 SCC OnLine SC 481.
7. The Tribunal dismissed the appeal preferred by the appellant/revenue, having regard to the fact that the substantive addition on merits was dropped. As indicated above, the addition in the hands of the respondent/assessee was only made on a protective basis.
8. In these circumstances, we are of the view that no substantial question of law arises for consideration by this court. The appeal is, accordingly, closed.
