L.G.Balakrishnan & Bros Limited , Coimbatore V. DCIT Corporate Circle 1 , Coimbatore

ITA 1924/CHNY/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8759 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 08-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B RAMAKRISHNAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1924/CHNY/2017 ( / ASSESSMENT YEAR: 2013-14) M/S. L G BALAKRISHNAN & BROS LIMITED, NO.6/16, 13, KRISHNARAYAPURAM ROAD, GANAPATHY, COIMBATORE 641 006. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, COIMBATORE 641 018. PAN : AAACL3740P ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI B. RAMAKRISHNAN, CA /RESPONDENT BY : SHRI SRINIVASA RAO, CIT /DATE OF HEARING : 12.12.2018 /DATE OF PRONOUNCEMENT : 17.12.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE DIRECTIONS OF THE LEARNED DISPUTE RESOLUTION PANEL DATED 26.04.2017 IN FILE NO.262/DRP- 2/BNG/2016-17 AND THE ASSESSMENT ORDER PASSED BY THE LEARNED DCIT DATED 28.06.2017 U/S. 143(3) R.W.S. 144C(13) OF THE ACT, FOR THE ASSESSMENT YEAR 2013-14. 2 ITA NO. 1924/CHNY/2017 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL HOWEVER THE LONE GROUND ARGUED BY THE LD.AR BEFORE US IS THAT:- THE LD.TPO AS WELL AS THE LD.MEMBERS OF THE DRP HAD ERRED, IN REJECTING THE PRAYER OF THE ASSESSEE THAT THERE IS COST SAVING TO THE EXTENT OF 4.52%, WITH RESPECT TO POWER COST, REPAIRS AND MAINTENANCE COST AND EMPLOYEE COST, BY STATING THAT THE ASSESSEE HAS NOT SUBSTANTIATED THE SAME BY PRIMARY DOCUMENTATION, WHEN THE SAME WAS MADE AVAILABLE BEFORE THEM. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AUTO PARTS, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 28.11.2013 ADMITTING TOTAL INCOME OF RS.21,49,68,580/- UNDER NORMAL RATES AND RS.42,14,74,047/- U/S.115JB OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED. THEREAFTER THE CASE WAS REFERRED TO THE LD.TPO WHO PASSED ORDER U/S. 92A(3) OF THE ACT ON 28.10.2016 FOLLOWED BY DRAFT ASSESSMENT ORDER ON 05.12.2016. SUBSEQUENTLY THE LD.MEMBERS OF THE DRP ISSUED DIRECTIONS ON 26.04.2017 WHEREIN THEY CONFIRMED THE ORDER OF THE LD.TPO WHO HAD MADE DOWNWARD ADJUSTMENT IN THE CASE OF THE ASSESSEE. THEREAFTER ASSESSMENT WAS COMPLETED ON 28.06.2017. 3 ITA NO. 1924/CHNY/2017 4. AT THE OUTSET, THE LD.AR SUBMITTED BEFORE US THAT THE ASSESSEE HAD FURNISHED THE FACTORS THAT WERE ATTRIBUTE FOR EARNING HIGHER MARGIN OF PROFIT GENERATED BY PANT NAGAR PLANT AS DETAILED HEREIN BELOW: S.NO. PARTICULARS DIRECT TURNOVER % OF COST REDUCTION / EXCISE BENEFIT AMOUNT OF ADDL. PROFIT (RS. IN LAKHS) 1 POWER COST 25,177.35 1.49 375.14 2 REPAIRS & MAINTENANCE COST 25,177.35 0.88 221.56 3 EMPLOYEE COST 25,177.35 2.15 541.31 4 EXCISE BENEFIT 25,177.35 5.19 1307.80 TOTAL 9.71% 2445.81 THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE HAD PRODUCED BEFORE THE LD.REVENUE AUTHORITIES THE ENTIRE DOCUMENTATION TO JUSTIFY THEIR STAND. HOWEVER THE LD.TPO WITHOUT VERIFYING THE DOCUMENTATION AND BY STATING THAT THE ASSESSEE HAD NOT FILED THE DOCUMENTATION HELD THAT POWER COST, REPAIR & MAINTENANCE COST AND EMPLOYEE COST CANNOT BE CONSIDERED AS FACTORS ATTRIBUTABLE FOR GENERATING HIGHER MARGIN OF PROFIT BY THE PANT NAGAR PLANT OF THE ASSESSEE AND THEREAFTER DOWNWARD ADJUSTMENT WAS COMPUTED TO THE TUNE OF RS.28,06,15,138/- BY COMPARING WITH THE COMPARABLE MARGINS. THE LD.AR ALSO UNDERTOOK TO PRODUCE ANY FURTHER DOCUMENTATION REQUIRED AND PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.TPO FOR FRESH CONSIDERATION. THE LD.DR THOUGH VEHEMENTLY ARGUED AGAINST 4 ITA NO. 1924/CHNY/2017 THE SUBMISSION OF THE LD.AR, DID NOT SERIOUSLY OPPOSE FOR REMITTING THE MATTER BACK TO THE FILE LD.TPO FOR DE-NOVA CONSIDERATION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. SINCE THE ASSESSEE HAS CLAIMED THAT IT HAS FURNISHED THE ENTIRE DOCUMENTATION BEFORE THE LD.REVENUE AUTHORITIES AND HAS ALSO UNDERTAKEN TO PRODUCE ANY FURTHER MATERIALS REQUIRED FOR FACILITATING THE ASSESSMENT PROCEEDINGS, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD.TPO FOR DE-NOVA CONSIDERATION. WE FURTHER CAUTION THE ASSESSEE TO CO-OPERATE WITH THE REVENUE AUTHORITIES IN THEIR PROCEEDINGS, FAILING WHICH THE LD.REVENUE AUTHORITIES SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH MERIT AND LAW BASED ON THE MATERIALS ON RECORD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 17 TH DECEMBER, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER 5 ITA NO. 1924/CHNY/2017 /CHENNAI, /DATED 17 TH DECEMBER, 2018 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF