M/S-Orissa Mining Corporation Ltd, Bhubaneswar V. Pr.CIT-1, Bhubaneswar

ITA 186/CTK/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5182 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 06-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य एवं श्री अरुण खोड़पऩया ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.186/CTK/2019 (नििाारण वषा / Asses s m ent Year :2014-2015) M/s Orissa Mining Corporation Ltd., OMC House, Bhubaneswar-01 P AN No. AAACO 3324 L ... ......... ..... A ssessee Versus Pr.CIT-1, Bhubaneswar ... ......... ...... R evenue Shri Siddharth Ranjan & Dinakar Mohanty, CAs for the assessee Shri M.K.Gautam, CIT-DR for the Revenue Date of Hearing : 21/06/2022 Date of Pronouncement : 21/06/2022 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT-1, Bhubaneswar, dated 28.03.2019 passed u/s.263 of the Act in F.No.Pr.CIT-1/BBSR/263-DP/AAACO3324L/2018-19 for the assessment year 2014-2015. 2. It was submitted by the ld. AR that the original assessment came to be completed u/s.143(3) of the Act on 22.12.2016. It was the submission that the ld. Pr.CIT invoked his powers u/s.263 of the Act for the purpose of setting aside the order passed u/s.143(3) of the Act on the ground that ITA No.186/CTK/2019 2 there was no proper verification done by the AO in respect of closing stock as mentioned in its accounts. It was the submission that the ld. Pr.CIT was of the view that the C&AG of India vide his comments on accounts in the annual report had observed that there was change in inventories and overstatement in its value due to under valuation of closing stock of Daitari Mines. It was the submission that this did not result in any loss of revenue making the assessment order passed u/s.143(3) of the Act erroneous and prejudicial to the interest of revenue insofar as undervaluation of the so-called closing stock has resulted in the same value be adjusted in the opening stock of the next year. This was not affecting the revenue. For this purpose, ld. AR relied on the decision of the coordinate bench of the Tribunal in the case of Caparo Maruti Ltd. Vs. DCIT in ITA No.5165/Del/2014, order dated 09.08.2017, wherein in para 12 it has been held that if the AO finds that the corresponding adjustment has been done in subsequent year then necessary relief should be granted during the relevant assessment year. It was the submission that the assessee has made adjustment in the opening stock of the subsequent assessment year and there is no C&AG comments on that issue. 3. In regard to the second issue, it was submitted that the issue was against the action of the ld.AO in allowing the CSR Expenditure incurred by the assessee. It was submitted that the CSR Expenditure was held to be not an allowable expenditure u/s.37(1) of the Act for and from the assessment year 2015-2016. It was the submission that the impugned ITA No.186/CTK/2019 3 assessment year is 2014-2015. Consequently, it was submitted that the same was not an error in the order of the assessment nor was the same prejudicial to the interest of revenue. 4. In reply, ld. CIT-DR submitted that in the proceedings u/s.263 of the Act, the Pr.CIT has only directed for verification. It was the submission that order of the Pr.CIT passed u/s.263 of the Act was liable to be upheld. In regard to the first issue, it was the submission that each assessment year is separate and each assessment year is viewed separately. Just because the assessee has made adjustment in the subsequent year, it does not mean that the adjustment should not be done during the relevant assessment year. Further, he vehemently supported the order of Pr.CIT. 5. We have considered rival submissions. 6. At the outset, it is noticed that the first issue in regard to the undervaluation of the closing stock of Daitari Mines has been proposed by the Pr.CIT on the basis of C&AG’s report. It is an admitted fact by the assessee that the necessary adjustments to the opening stock have also been done during the immediately subsequent assessment year. As this would not make a revenue effect, it cannot be said that the assessment order passed u/s.143(3) of the Act on 22.12.2016 erroneous and prejudicial to the interest of revenue on this ground. 7. Coming to the issue of non-allowance of expenditure in regard to CSR u/s.37(1) of the Act, a perusal of the Circular clearly shows that the same is not allowable for and from the assessment year 2015-2016. The impugned assessment year is 2014-2015. This being so, the ld.AO has ITA No.186/CTK/2019 4 rightly allowed the said expenditure. In these circumstances, we are of the view that the same cannot be treated as making the assessment order passed u/s.143(3) of the Act on 22.12.2016 is erroneous and prejudicial to the interest of revenue. Consequently, the order passed u/s.263 of the Act by the ld. Pr.CIT stands set aside. 8. In the result, appeal filed by the assessee is allowed. Order dictated and pronounced in the open court on 21/06/2022. Sd/- (अरुण खोड़पऩया) (ARUN KHODPIA) Sd/- (जाजज माथन) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 21/06/2022 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : आदेशाि ु सार/ BY ORDER, (Assistant Registrar) आयकर अपीऱीय अधिकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- M/s O r issa Min in g Corpo ration Ltd. , OMC House, Bhub anes war-01 2. प्रत्यथी / The Respondent- Pr.CIT-1, Bhubanes war 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. पिभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यापऩत प्रयत //True Copy//