Case Law Details
Goldman Sachs (India) Finance Private Limited Vs DCIT (ITAT Mumbai)
We are of the considered opinion that in this regard if the assessee is not called upon to pay any tax on book profit as taxes on normal computation are higher even after the aforesaid exercise of increase of the book profit by the amount of provision for the concerned year, the exercise would be an empty exercise and revenue neutral. This means that the assessee would not have been called upon to pay any extra tax whatsoever had this exercise been done. The Hon’ble Supreme Court had an occasion to expound in the case of CIT vs. Excel Industries vide order dated 09.10.2013 that when the exercise is revenue neutral, the action on the part of revenue authority is not sustainable. The Hon’ble Apex Court had observed that such an exercise is fruitless (on merits) but also it may not have added anything much to the public coffer. In this case, it is amply clear that such an exercise in earlier year would not have added anything to the public coffer.
Hence, from the above it is amply clear that the explanation invoked by the authorities below is not applicable on the facts of this case. Even for argument sake, we consider the view that there are two views possible, we are of the considered opinion that the view in favour of assessee is on an overwhelming higher side. In this view of the matter, as expounded by the Hon’ble Court’s Constitution bench in the case of Dilip Gandhi (supra), if two views are possible in a statutory tax provisions, the one in favour of the assessee should be adopted. Accordingly, in the background of the aforesaid discussion and precedent, we are of the considered opinion that the order of the ld. CIT(A) is not sustainable. Accordingly, we set aside the order of the ld. CIT(A) and decide the issue in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-2, Mumbai (‘ld.CIT(A) for short) dated 19.12.2018 and pertains to the assessment year (A.Y.) 2013-14.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
