GTN Engineering (India) Limited (Earstwhile Perfect Knitters Limited), Secunderabad V. ACIT, Circle 16(3), Hyderabad

ITA 217/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82393 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 12-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Capital expenditure
• Section: 143(3); 263

Judgement Text

` IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 217/HYD/2014 ASSESSMENT YEAR : 2006-07 GTN ENGINEERING (INDIA) LTD., (ERSTWHILE PERFECT KNITTERS LTD.), HYDERABAD PAN AABCP4066H ASST. COMMISSIONER OF INCOME- TAX, CIRCLE 16(3),HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI M.V. ANIL KUMAR REVENUE BY SHRI RAMAKRISHNA BANDI DATE OF HEARING 10-09-2014 DATE OF PRONOUNCEMENT 24-09-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31/10/2013 OF CIT(A)-V, HYDERABAD PERTAINING TO AY 2006-07. 2. BRIEFLY THE FACTS ARE, ASSESSEE EARLIER KNOWN A S PERFECT KNITTERS LTD. IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF COTTON KNITTED GARMENTS AND FABRIC PROCESSING. FOR THE AY UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 27/ 11/06 DECLARING TOTAL INCOME OF RS. 3,09,10,960. ASSESSMENT IN CASE OF THE ASSESSEE WAS ORIGINALLY COMPLETED U/S 143(3) ON 31/12/08 BY DETERMINING TOTAL INCOME AT RS. 3,31,87,452. 3. ASSESSMENT ORDER PASSED WAS SUBJECTED TO PROCEED ING U/S 263 OF THE ACT AND WAS ULTIMATELY SET ASIDE BY THE CIT WITH SPECIFIC 2 ITA NO.217/HYD/2014 GTN ENGINEERING (INDIA) LTD. DIRECTION TO AO TO MAKE ADDITIONS ON CERTAIN ISSUES . IN COMPLIANCE TO THE DIRECTION OF CIT U/S 263 OF THE ACT, AO INITIAT ED ASSESSMENT PROCEEDING AGAIN AND FINALLY PASSED AN ORDER ON 27/ 12/11 IMPLEMENTING THE DIRECTIONS OF CIT BY MAKING ADDITI ON AS PER THOSE DIRECTIONS. ASSESSEE BEING AGGRIEVED OF THE ASSESSM ENT ORDER, SO PASSED, PREFERRED APPEAL BEFORE CIT(A). CIT(A) ALSO DID NOT ENTERTAIN THE GROUND RAISED BY ASSESSEE FOR THE REASON THAT A O HAS COMPLETED ASSESSMENT AS PER THE DIRECTIONS OF CIT. 3. LEARNED AR SUBMITTED BEFORE US THAT THE ORDER PA SSED U/S 263 BY CIT WAS APPEALED AGAINST BEFORE THE TRIBUNAL AND THE ITAT IN ITA NO. 1081/HYD/11 DATED 30/09/13 WHILE MODIFYING THE ORDER OF CIT HAS DIRECTED AO TO EXAMINE ALL THE ISSUES RELATING SPEC IFIC DIRECTIONS ISSUED BY CIT. IT WAS, THEREFORE, SUBMITTED THAT TR IBUNAL HAVING DIRECTED AO TO EXAMINE THE ISSUE AGAIN, THE IMPUGNE D ORDER OF CIT(A) MAY ALSO BE SET ASIDE WITH A DIRECTION TO AO TO EXA MINE THE ISSUE. 4. LEARNED DR DID NOT HAVE ANY OBJECTION IF THE MAT TER IS REMITTED TO THE AO FOR RECONSIDERATION. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OT HER MATERIALS ON RECORD. AS CAN BE SEEN, FROM THE ASSESSMENT ORDER A S WELL AS THE ORDER OF CIT(A), THE DISPUTE IS IN RELATION TO THE FOLLOWING ADDITIONS: I) FOREX GAIN/LOSS DEBITED TO P&L ACCOUNT TREATED AS CAPITAL EXPENDITURE U/S 43A RS. 8,31,090 II) EXCESS INTEREST RELATING TO CAPITAL WORK IN PROGRESS RS.55,92,371 III) DISCREPANCY IN INVENTORIES OF STORES AND SPAR ESRS.20,20,000 6. IT IS FURTHER EVIDENT FROM THE ASSESSMENT ORDER THAT AO HAS MADE THE ADDITIONS A PER THE SPECIFIC DIRECTION OF CIT U /S 263 OF THE ACT. HOWEVER, ON A PERUSAL OF THE ORDER DATED 30/09/13 P ASSED IN ITA NO. 1081/HYD/11, IT IS OBSERVED THAT THE COORDINATE BEN CH MODIFYING THE ORDER PASSED BY CIT U/S 263 HAS DIRECTED AO TO EXA MINE AFRESH ALL 3 ITA NO.217/HYD/2014 GTN ENGINEERING (INDIA) LTD. THE AFORESAID ISSUES. AS IT APPEARS, THIS ORDER OF THE TRIBUNAL HAS NOT BEEN BROUGHT TO THE NOTICE OF LEARNED CIT(A). BE TH AT AS IT MAY, CONSIDERING THE FACT THAT THE TRIBUNAL HAS DIRECTED THE AO TO EXAMINE THE ISSUE RELATING TO AFORESAID ADDITIONS WHILE CON SIDERING ASSESSEES APPEAL AGAINST THE ORDER PASSED U/S 263, WE CONSIDE R IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER OF CIT(A) AND DIREC T AO TO EXAMINE THE ISSUE AFRESH IN CONSONANCE WITH THE DIRECTION I N ITA NO. 1081/HYD/11 (SUPRA). 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON24/09/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 24 TH SEPTEMBER, 2014 KV COPY TO:- 1) GTN ENGINEERING (INDIA) LTD. C/O M. ANANDAM & CO., CAS., 7 A, SURYA TOWERS, SD ROAD, SECUNDERABAD 500 003. 2) THE ACIT,CIRCLE 16(3), HYDERABAD 3) CIT(A)-V, HYDERABAD 4) CIT-IV, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.