DCIT, Cirlce- 16(2), New Delhi Meyer Apparel Ltd., New Delhi

The Income Tax Appellate Tribunal heard an appeal from the DCIT against Meyer Apparel Ltd for the assessment year 2012-13. The Revenue challenged the deletion of an addition of Rs. 8,44,022 made under Section 14A of the Income Tax Act regarding investments in shares. They also contested the reduction of book profit under Section 115JB and the deletion of an addition of Rs. 6,77,24,250 for alleged undisclosed sources in the form of trade creditors.

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘C’ NEW DELHI

BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
&
SHRI K.N. CHARY, JUDICIAL MEMBER

ITA No.-4541/Del/2017
(Assessment Year:2012-13)

DCIT
Circle 16(2)
New Delhi.
PAN No. AAACG3928L
Appellant 

Vs. 

Meyer Apparel Ltd.
D-219, Sushil Bhawan,
Vivek Vihar-1,
New Dlehi.
Respondent

Revenue by Sh. Jagdish Singh Dahiya, Sr. DR
Assessee by Sh. Vinod Kumar Bindal, CA
Ms. Rinky Sharma, CA

Date of hearing: 30.12.2020
Date of Pronouncement : 30.12.2020

ORDER

PER K. NARASIMHA CHARY, JM

Aggrieved by the order dated 6/4/2017 in appeal No. 122/16-17 passed by the learned Commissioner of Income Tax (Appeals)-18, New Delhi (“Ld. CIT(A)”) for the assessment year 2012-13 in the case of M/s MeyerApparel Ltd (earlier known as M/s Givo Ltd), Revenue preferred this appealchallenging the deletion of the addition of Rs. 8, 44, 0 22/-made by the assessing officer by invoking 14A of the Income Tax Act, 1961 (for short “theAct”) read with Rule 8D of the Income Tax Rules1962 (“the Rules”) and alsoreducing the book profit under section 115 JB of the Act; deleting theaddition of Rs. 6, 77, 24, 250/-made by the assessing officer on account of undisclosed sources in the form of trade creditors.

2. Brief facts of the case are that the assessee is engaged in business of manufacturing, trading and job work of men’s suits, jackets and trousers and trading of shirts. For the assessment year 2012-13 they have filed their return of income on 24/9/2012 declaring a nil income after setting of losses brought forward to the tune of Rs. 88, 36, 327/-from the earlier years but computed the book profits under section 115 JB of the Act at Rs. 72, 42, 919/-and pay taxes of Rs. 13, 80, 138/-under section 115 JB of the Act. During the course of assessment proceedings, learned Assessing Officer found that the assessee company had invested in shares for the purpose of long term capital gains and therefore invoking the provisions under 14A of the Act read with Rule 8D of the Rules made an addition of Rs. 8, 44, 0 22/-. Further on a perusal of the details of creditors, the learned Assessing Officer found that the assessee has been showing static creditors in the name of 4 parties since 2008, but in view of the fact that more than 5 years elapsed, learned Assessing Officer opined that the same is a fictitious liability and added a sum of Rs. 6, 77, 24, 250/-to the income of the assessee.

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