M/s. Dynamic Transmission Ltd., Rohtak V. Pr. CIT, Rohtak

ITA 2006/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3398 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 12-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Keywords: Revision of order
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARRY, JUDICIAL MEMBER ITA NO.-2006/DEL/2016 ( ASSESSMENT YEAR: 2011-12) DYNAMIC TRANSMISSION LTD. 151-IDC, HISSAR ROAD, ROHTAK. AAACD4358H VS PR. CIT ROHTAK ASSESSEE BY SH. MANOJ KUMAR, CA REVENUE BY SH. RAVI JAIN, CIT DR ORDER PER K. NARSIMHA CHARRY, J.M. THIS IS AN APPEAL CHALLENGING THE ORDER DATED 30.03 .2016 PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX- ROHTAK U/S 263 OF THE INCOME TAX ACT REQUIRING THE AO TO EXAMI NE AFRESH THE EXPENSES DEBITED TO ALL THE FOUR UNITS OF THE ASSES SEE AT ROHTAK, MANESAR, AURANGABAD AND UTTRANCHAL AND ALSO THE EXP ENSES PERTAINING TO THE SALES AND JOB WORK. DATE OF HEARING 18.04.2017 DATE OF PRONOUNCEMENT 21.04.2017 2 ITA NO.2006/DEL/2016 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY HAVING FOUR UNITS AT ROHTAK, MANESAR, AURAN GABAD AND UTTRANCHAL RESPECTIVELY. FOR THE A.Y. 2011-12 A TO TAL INCOME OF RS. 1,40,21,660/- CLAIMING A DEDUCTION OF 74,04,479/- U /S 80IC OF THE ACT WAS RETURNED ON 30.09.2011 AND DURING THE ASSES SMENT THE AO DISALLOWED A SUM OF RS. 68,84,141/- OUT OF 74,04 ,479/-, AND ALLOWED DEDUCTION U/S 80IC AT RS. 5,23,338/-. BY OR DER DATED 07.03.2014 U/S 143(3) OF THE ACT THE AO ADDED A SUM OF RS. 68,84,141/-. HOWEVER, BY ORDER DATED 30.03.2016 TH E PR. COMMISSIONER OF INCOME TAX RECORDED A FINDING THAT VERY LESS PROFIT WAS SHOWN FOR THE UNITS LOCATED AT ROHTAK, M ANESAR AND AURANGABAD WHICH ARE NOT ELIGIBLE FOR DEDUCTIONS U/ S 80IC, WHEREAS HUGE NET PROFIT WAS DISCLOSED FOR THE UNIT AT UTTRANCHAL WHERE THE FIRM ENJOYS THE DEDUCTION U/S 80IC AT 100 %, AS SUCH THE ORDER PASSED BY THE AO U/S 143(3) OF THE ACT WA S ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AND ON THIS PREMISE REQUIRED THE AO TO EXAMINE AFRESH THE EXPENSES DEBITED TO ALL THE FOUR UNITS AND ALSO EXPENSES PER TAINING TO SALES AND JOB WORK. 3 ITA NO.2006/DEL/2016 3. CHALLENGING THIS ACTION OF THE LD. PR. CIT ROHT AK THE ASSESSEE IS IN APPEAL BEFORE US CONTENDING THAT THE LD. PR. CIT ERRED IN INVOKING SECTION 263 OF THE ACT IN AS MUCH AS THE ASPECT OF DEDUCTION U/S 80IC IS ALREADY SUBJECT MATTER OF AN APPEAL U/S 246A OF THE ACT AND ALSO THAT THERE IS NO REASON FO R THE LD. PR. CIT TO HOLD THAT THE ORDER OF ASSESSMENT IS ERRONEOUS A ND PREJUDICE TO THE INTEREST OF REVENUE. 4. IT IS THE ARGUMENT OF THE LD. AR THAT THE AO HAS CONSIDERED THE FACTS IN DEPTH WITH REFERENCE TO THE BOOKS OF A CCOUNTS MAINTAINED BY THE ASSESSEE IN RESPECT OF THE FOUR U NITS AND DISALLOWED A SUM OF RS. 68,84,141/- OUT OF RS. 74,0 4,479/- WHICH WAS CLAIMED BY THE ASSESSEE, AND THIS FACT ITSELF E STABLISHED THAT THE AO HAD EXAMINED THE ISSUE IN DEPTH AS SUCH THE LD. PR. CIT IS NOT JUSTIFIED IN INVOKING THE JURISDICTION U/S 263 OF THE ACT. FURTHER ARGUMENT OF THE LD. AR IS THAT THE CERTIFIE D COPY OF THE OFFICE NOTING GIVING RISE TO THE PROCEEDINGS U/S 26 3 OF THE ACT CLEARLY SHOW THAT NO RECORD WAS CALLED FOR, FOR EXA MINATION OF THE ISSUE BY THE LD. PR. CIT AND FOR WANT OF APPLICATIO N OF MIND THE PROCEEDINGS ARE BAD. 4 ITA NO.2006/DEL/2016 5. PER CONTRA, IT IS THE ARGUMENT OF THE LD. DR THA T THOUGH THE AO DISALLOWED A SUM OF RS. 68,84,141/- THAT FACT AL ONE PER SE DOES NOT ESTABLISHED THAT SUCH ASPECTS AS ARE REFERRED B Y THE LD. PR. CIT IN HER ORDER WERE ALSO CONSIDERED BY THE AO. AS A MATTER OF FACT THE RECORD DOES NOT REVEAL THAT THE AO ADVERTED TO THIS ASPECT OF THE ASSESSEE BOOKING HUGE EXPENSES IN RESPECT OF TH E UNITS WHICH ARE NOT QUALIFIED FOR DEDUCTION U/S 80IC AND DISCLO SING HUGE PROFITS IN RESPECT OF THE UNITS WHICH ARE ELIGIBLE FOR THE BENEFITS U/S 80IC. FOR THESE REASONS HE SUBMITTED THAT THE APPE AL IS DEVOID OF MERITS AND PRAYED TO DISMISS THE SAME. 6. WE HAVE CAREFULLY GONE THROUGH THE RECORD AND IT IS A MATTER OF RECORD THAT BY WAY OF ORDER DATED 07.03.2014 U/S 143(3) OF THE ACT THE AO VIDE PARAGRAPH NOS. 3, 3.1 AND 3.2 CONSI DERED THE ASPECT OF INCOME FROM JOB WORK AND SALES, AND OUT O F AN AMOUNT OF RS. 74,04,479/- CLAIMED BY THE ASSESSEE U/S 80IC HE DISALLOWED A SUM OF RS. 68,84,141/- WHILE ALLOWING ONLY A SUM OF RS. 5,20,338/- U/S 80IC. WE ARE INCLINED TO AGREE WITH THE LD. COUNSEL THAT BY NO STRETCH OF IMAGINATION CAN IT BE SAID THAT THERE 5 ITA NO.2006/DEL/2016 IS NO REQUISITE ENQUIRY BY THE AO. AT BEST IT IS TH E CASE OF INADEQUATE ENQUIRY. 7. FURTHER THE CERTIFIED COPY OF THE OFFICE NOTING FILED BY THE LD. AR READS AS FOLLOWS: M/S DYNAMIC TRANSMISSION PVT.LTD.,151, IDC, HISSAR ROAD, ROHTAK AY 2011-12 IN THIS CASE, PROPOSAL U/S 263 OF THE I.T. ACT, 196 1 WAS RECEIVED FROM DCIT, CIRCLE, ROHTAK NOTICING CERTAIN DISCREPANCIES NOTICED WHILE COMPLETING ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 07.03.2014. PUC IS SHOW CAUSE NOTICE FIXING THE CASE FOR HEARI NG ON 15.03.2016. 8. IT CLEARLY SHOWS THAT IMMEDIATELY ON RECEIPT OF THE PROPOSAL U/S 263 OF THE ACT FROM DCIT CIRCLE-ROHTAK NOTICING CERTAIN DISCREPANCIES IN THE COMPLETION OF ASSESSMENT U/S 1 43(3) OF THE ACT, SHOW CAUSE NOTICE FIXING THE DATE OF HEARING O N 15.03.2016 WAS ORDERED. THIS CLEARLY SHOWS THAT ON RECEIPT OF PROPOSAL NO EXERCISE OF CALLING FROM RECORD AND EXAMINING THE I SSUE IN DETAIL TO REACH THE SATISFACTION THAT THERE IS ESCAPEMENT OF INCOME IN THE ASSESSMENT FRAMED BY THE AO AS SUCH THE ORDER OF TH E AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE. THIS CLEARLY INDICATES WANT OF DUE EXERCI SE FOR REACHING A 6 ITA NO.2006/DEL/2016 SATISFACTION AS SUCH THE INITIATION OF PROCEEDINGS U/S 263 OF THE ACT DOES NOT APPEAR TO BE ON ANY SOUND BASIS. 9. VIEWING FROM ANY ANGLE, WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED ORDER U/S 263 OF THE ACT CANNOT BE SUS TAINED. WITH THIS VIEW OF THE MATTER, WE QUASH THE SAME. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.04.2017 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA CHARR Y) HONBLE PRESIDENT JUDICIAL MEMBER DATED: 21.04.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 7 ITA NO.2006/DEL/2016 DRAFT DICTATED ON 18.04.2017 DRAFT PLACED BEFORE AUTHOR 18.04.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 21.04.2017 KEPT FOR PRONOUNCEMENT ON 21.04.2017 FILE SENT TO THE BENCH CLERK 21.04.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.