M/s Quarkcity India Private Limited, Mohali V. Addl. CIT, Mohali

ITA 11/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6498 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: RAMAN AGGARWAL
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 11/CHD/2017 ASSESSMENT YEAR: 2011-12 M/S QUARKCITY INDIA PVT. LTD., VS. THE DCIT, CIRC LE 6(1), A-40A, INDUSTRIAL AREA, PHASE-VIII, MOHALI MOHALI PAN NO. AAACQ1134G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAMAN AGGARWAL RESPONDENT BY : SH. RAVI SARANGAL DATE OF HEARING : 21.09.2017 DATE OF PRONOUNCEMENT : 14.12.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 5.10.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, [HEREINAFTER REFERRED TO AS CIT(A)] CHANDIGARH. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER OF THE LD. ASSESSING OFFICER IS BAD IN LAW AND ON FACTS. 2. THAT THE LD. ASSESSING OFFICER HAS FAILED TO TAKE I NTO CONSIDERATION THE MATERIALS AND FACTS ALREADY ON RECORD. 3. THE LD ASSESSING OFFICER COMPLETED THE ASSESSMENT 2 PROCEEDINGS AND PASSED THE ORDER ON 30.03.2015. THE ORDER OF THE LD. ASSESSING OFFICER IS ENTIRELY BASE D ON THE PRESUMPTIONS AND IS TOTALLY BASELESS, WITHOUT ANY JUSTIFICATION AND IS LIABLE TO BE SET ASIDE. 4. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGAL LY, ARBITRARILY AND WITHOUT ANY BASIS CREDITED THE INCO ME FROM SALE OF SCRAP AMOUNTING TO RS. 45,04,628/- IN THE P & L ACCOUNT AND ADDED IT TO THE RETURNED INCOME OF THE COMPANY. 5. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGALLY, ARBITRARILY AND WITHOUT ANY BASIS DISALLOWED A SUM OF RS. 83,87,895/- AND ADDED IT TO THE RETUNED INCOME OF THE ASSESSEE COMPANY UNDER THE HEAD SALARY AND WAGES AS DIRECTLY LINKED TO CWIP. 6. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGAL LY, ARBITRARILY AND WITHOUT ANY BASIS DISALLOWED A SUM OF RS. 22,33,981/- AND ADDED IT TO THE RETURNED INCOME OF THE ASSESSEE COMPANY FOR THE ASSESSMENT YEAR 2011-12 UNDER THE HEAD STAFF WELFARE EXPENSES AND CAPITALIZED THE SAME TO 'CAPITAL WORK IN PROGRESS'. 7. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGALLY, ARBITRARILY AND WITHOUT ANY BASIS CAPITALIZED DEPRECIATION OF RS. 24,00,505/- ON FURNITURE, FIXTURES, HARDWARE AND SOFTWARE, OFFICE EQUIPMENTS, AND VEHICLES AND ADDED TO THE RETURNED INCOME OF THE ASSESSEE COMPANY. 8. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGALLY, ARBITRARILY AND WITHOUT ANY BASIS CAPITALIZED MISC. AND OTHER EXPENSES OF RS.1,73,218 /- AND ADDED IT TO THE RETURNED INCOME OF THE ASSESSEE COMPANY. 9. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGAL LY, ARBITRARILY AND WITHOUT ANY BASIS CAPITALIZED RS. 81,98,740/- ON ACCOUNT OF ADMINISTRATIVE AND OTHER EXPENDITURE AND ADDED IT TO THE RETUNED INCOME OF T HE ASSESSEE COMPANY. THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL AND REDUCED THIS ADDITION TO RS. 80,25,522/-. 10. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGAL LY, ARBITRARILY AND WITHOUT ANY BASIS DISALLOWED RS. 1,12,771/- ON ACCOUNT OF BUSINESS PROMOTION EXPENSES. THE LD. CIT(A) HAS FULLY ALLOWED THE 3 APPEAL AND MADE THIS ADDITION TO NIL. 11. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGAL LY, ARBITRARILY AND WITHOUT ANY BASIS CAPITALIZED DEPRECIATION RS. 42,04,554/- AND ADDED IT TO THE RETUNED INCOME OF THE ASSESSEE COMPANY. 12. THAT THE LD. ASSESSING OFFICER HAS WRONGLY, ILLEGAL LY, ARBITRARILY AND WITHOUT ANY BASIS OR JUSTIFICATION DISALLOWED RS. 7,84,632/- ON ACCOUNT OF EXPENDITURE CLAIMED IN THE PROFIT AND LOSS ACCOUNT. 13. THAT THE GROUNDS RAISED ABOVE ARE INDEPENDENT OF EACH OTHER AND WITHOUT PREJUDICE TO ONE ANOTHER. 3. AT THE OUTSET, THE LD. AR OF THE ASSESSEE HAS ST ATED THAT THE ABOVE GROUNDS OF APPEALS ARE ALMOST IDENTICAL TO THAT HAV E BEEN TAKEN BY THE ASSESSEE IN ITS APPEALS FOR ASSESSMENT YEARS 2008-0 9 AND 2009-10, IN ITA NOS. 257/CHD/2014 AND 275/CHD/2013. HE HAS FURTHER SUBMITTED THAT THE APPEALS FOR ASSESSMENT YEARS 2008-09 AND 2009-10 HA VE ALREADY BEEN REMANDED BACK BY THE TRIBUNAL TO THE FILE OF THE CI T(A) FOR ADJUDICATION AFRESH VIDE ORDER DATED 24.01.2017. HE HAS FURTHER SUBMITTED THAT EVEN THE APPEAL FOR THE ASSESSMENT YEAR 2010-11 IS ALSO PEND ING FOR ADJUDICATION BEFORE CIT(A). HE HAS ALSO SUBMITTED THAT SINCE IDE NTICAL ISSUES FOR EARLIER ASSESSMENT YEARS ARE PENDING BEFORE THE CIT(A), HEN CE, THE MATTER FOR THE YEAR UNDER CONSIDERATION BE ALSO RESTORED TO THE FI LE OF CIT(A). 4. THE LD. DR HAS ALSO NOT RAISED ANY SERIOUS OBJEC TION OF THE FILE BEING RESTORED TO THE CIT(A) AND EVEN THE APPEAL FOR THE ASSESSMENT YEAR 2010- 11 IS STILL PENDING FOR ADJUDICATION BEFORE THE CI T(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS. IN VIEW OF THE SUBMISSIONS MADE ABOVE AND SINCE THE ISSUE RAISED FOR THE EARLI ER YEARS IS STILL PENDING BEFORE THE CIT(A), THE ISSUE RAISED IN THE PRESENT APPEAL IS RESTORED TO THE 4 FILE OF THE CIT(A) TO DECIDE AFRESH ALONG WITH THE APPEALS FOR ASSESSMENT YEARS 2008-09, 2009-10 AND ASSESSMENT YEAR 2010-11 . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2017 SD/- SD/- (DR. B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14.12.2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR