DCIT, New Delhi V. M/s. IRCON International Ltd., New Delhi

ITA 2117/DEL/2013

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8459 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 16-05-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 11-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Principle of natural justice; Revised return; Reassessment proceedings; Capital expenditure
• Section: 143(3); 115JB; 13; 147

Judgement Text

1 ITA NO. 2117/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 2117/DEL/20 13 (A.Y 2004-05) (THROUGH VIDEO CON FERENCING) DCIT CIRCLE-11(1), ROOM NO. 312 C.R. BUILDING NEW DELHI (APPELLANT) VS IRCON INTERNATIONAL LTD. C-4, DISTRICT CENTRE SAKET NEW DELHI AAAC10684H (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER DATED 10/11/2009 PASSED BY CIT(A)-XXX, NEW DELHI FOR ASSESSMENT YEAR 2004-05. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A) HAS ERRED IN DELEING THE ADDITION OF RS.3,60,00,000/- M ADE ON ACCOUNT OF TECHNICAL KNOWHOW AND AGENCY CHARGES BEING TREATED THE SAME AS CAPITAL EXPENDITURE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,50,50,000/- MADE ON ACCOUNT OF PRIOR PERIOD EXPENSES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE GROUNDS RELATED TO CHALLENGIN G THE INITIATION OF APPELLANT BY SH. MAHESH THAKUR, SR. ADV RESPONDENT BY DR. RAKESH GUPTA, ADV & SH. SOMIL AGARWAL, ADV DATE OF HEARING 24.03.2021 DATE OF PRONOUNCEMENT 24.03.2021 2 ITA NO. 2117/DEL/2013 REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT WITHOUT DISCUSSING THIS ISSUE ON MERITS. 3. THE ASSESSEE IS A GOVERNMENT OF INDIA UNDERTAKIN G, ENGAGED INTER ALIA, IN THE BUSINESS OF EXECUTION OF CIVIL ENGINEERING, ELECTRICAL, COMMUNICATION AND TURKEY CONTRACTS WITHIN INDIA AS WELL AS ABROAD . FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION , THE ASSESSEE COMPANY FILED ITS ORIGINAL RETURN OF INCOME ON 29-10-2004, DECLARING THE TOTAL INCOME OF RS. 325,361,850/- UNDER THE NORMAL PROVISIONS OF THE ACT AND BOOK PRO FITS AMOUNTING TO RS. 252,248,183/- AS PER PROVISIONS OF SECTION 115JB OF THE ACT. SUBSEQUENTLY, REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE COMPANY ON 30-03-2006 DECLARING THE TOTAL INCOME OF RS. 61,614 ,780/- UNDER THE NORMAL PROVISIONS OF THE ACT AND SAME AMOUNT OF BOOK PROFI TS, U/S 115JB OF THE ACT, AS DISCLOSED IN ORIGINAL RETURN OF INCOME. ASSESSME NT PROCEEDINGS WERE COMPLETED VIDE ORDER U/S 143(3) DATED 29-12-2006. I N THE SAID ORDER, THE LD. ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE ' LD. AO') MADE CERTAIN DISALLOWANCES AND/OR ADDITIONS TO THE TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT, DETERMINING THE ASSESSED INCOME FOR THE YE AR AT RS. 69,06,09,687/-. FURTHER, BOOK PROFITS AS PER SECTION 115JB OF THE A CT WERE ASSESSED AT RS.51,13,62,466/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE CIT (A) ERRED IN D ELETING THE ADDITION OF RS.3,60,00,000/- MADE ON ACCOUNT OF TECHNICAL KNOWH OW AND AGENCY CHARGES BEING TREATED AS CAPITAL EXPENDITURE . FURTHER, TH E LD. DR ALSO SUBMITTED THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1, 50,50,000/- MADE AN AMOUNT OF PRIOR PERIOD EXPENSES. THE LD. DR SUBMITTED THA T THE CIT(A) HAS ERRED IN ALLOWING THE GROUNDS RELATED TO CHALLENGING INITIAT ION OF REASSESSMENT 3 ITA NO. 2117/DEL/2013 PROCEEDINGS U/S 147 C DISCUSSING THE SAID ISSUE ON MERIT. THE LD. DR FURTHER SUBMITTED THAT THE ORDER OF THE CIT(A) HAS SUMMARIL Y ALLOWED ALL THESE ISSUES AND HAS NOT ADJUDICATED THE SAME WITH PROPER FINDIN G OR REASONING. THEREFORE, THE LD. DR SUBMITTED THAT ALL THE ISSUES IS REMANDE D BACK TO THE FILE OF CIT(A). 6. THE LD. AR SUBMITTED THAT THE ORDER OF THE CIT(A ) IS NOT SPEAKING ORDER AND HAS NOT DECIDED THE ISSUE OF REASSESSMENT/REOPE NING. THUS, THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BOTH THE PARTIES AGREE THAT THE ORDER OF T HE CIT(A) IS NOT A SPEAKING ORDER AND AFTER PERUSAL OF THE ORDER OF THE CIT(A), WE ALSO FIND THAT ALL THE ISSUES WERE NOT PROPERLY SETTLED AND ADJUDICATED BY THE CIT(A) INCLUDING THE ISSUE OF INITIATION OF REASSESSMENT. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK THIS MATTER TO THE FILE OF THE CIT(A) FOR ADJU DICATING THE SAME AFRESH ON LEGAL ISSUES AS WELL AS ON MERIT WITH PROPER AND DE TAILED FINDING. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING B Y FOLLOWING PRINCIPLES OF NATURAL JUSTICE. 8. IN RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT IN PRESENCE OF B OTH THE PARTIES ON THIS 24 TH DAY OF MARCH, 2021 SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 24/03/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 4 ITA NO. 2117/DEL/2013 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI