M/s. M.P.Dye Chem Industries Pvt. Ltd., Indore V. The CIT, Indore

ITA 293/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1522 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 01-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Section: 143(3); 263

Judgement Text

PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. :AACCM3432F I.T.A.NO. 293/IND/2009 A.Y. : 2004-05 M.P. DYE CHEM INDUSTRIES PVT.LTD., COMMISSIONER OF INCOME TAX 1, NO. 59 & 63, SECTOR A, INDUSTRIAL AREA, SANWER ROAD, INDORE. VS INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI AJAY TULSIYAN, C. A. RESPONDENT BY : SHRI K.K.SINGH, CIT DR O R D E R PER GUPTA, A.M. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE O RDER OF THE LD. COMMISSIONER OF INCOME-TAX, PASSED U/S 263 IN HOLDI NG THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U /S 143(3) WAS BOTH ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE U/S 143( 3) WAS PASSED ON 26.12.2006, WHEREIN ASSESSEES CLAIM FOR ALLOWAN CE OF RESEARCH AND DEVELOPMENT EXPENSES AMOUNTING TO RS. 35,55,012/- H AD BEEN ACCEPTED. PAGE 2 OF 4 THE LD. CIT SUBSEQUENTLY NOTED THAT NO ENQUIRY HAD BEEN DONE BY THE ASSESSING OFFICER IN THIS REGARD. HENCE, HE ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT ON 20 TH MARCH, 2009, IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED THAT THESE EXPENSES WERE OF REVENUE NATUR E. IT WAS ALSO STATED THAT THE ASSESSEE HAD WRITTEN OFF 1/10 TH OF THIS EXPENDITURE IN THE BOOKS OF ACCOUNT, HOWEVER, THOSE WERE CLAIMED AS REVENUE EXP ENDITURE IN THE RETURN OF INCOME AND THIS FACT WAS EVIDENT FROM THE INCOME COMPUTATION CHART ENCLOSED THEREWITH. IT WAS ALSO CONTENDED THA T THIS ISSUE WAS EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDING S. HENCE, IT COULD NOT BE SAID THAT THE A.O. HAD NOT APPLIED HIS MIND ON THIS ISSUE. THE LD. CIT, HOWEVER, AFTER EXAMINING THE CASE RECORDS HELD THAT THE A.O. DID NOT EXAMINE THIS AT ALL, HENCE, IT WAS A CASE OF LACK O F ENQUIRY, WHICH RENDERED THE ORDER PASSED U/S 143(3) OF THE ACT, BO TH ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF REVENUE. HENCE, HE DIRECTED THE A.O. TO RE- EXAMINE THIS ISSUE AFRESH AS PER LAW. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE F ACTS, DREW OUR ATTENTION TO INCOME COMPUTATION CHART AND CONTE NDED THAT THE NATURE OF CLAIM MADE BY THE ASSESSEE WAS PATENTLY EXHIBITE D, HENCE, THE ASSESSMENT ORDER COULD NOT BE SAID AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ON A QUERY FROM THE BENCH , THE LEARNED COUNSEL PAGE 3 OF 4 FOR THE ASSESSEE ADMITTED THAT IN THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER NO INQUIRY HAD BEEN MADE IN REGARD TO ADMIS SIBILITY OF THE SAME. HOWEVER, HE EMPHATICALLY STATED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. MADE ENQUIRIES, WHICH WERE RE PLIED ORALLY BY ADDUCING NECESSARY EVIDENCES. 4. THE LD. CIT DR, ON THE OTHER HAND, STRONGLY SUPPORT ED THE ORDER OF THE LD. CIT. 5. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 6. IT IS NOTED THAT WHILE FRAMING THE ASSESSMENT U/S 1 43(3) OF THE ACT, THE A.O. HAS NOT MADE ANY ENQUIRY AS REGARD TO THE ADMISSIBILITY OF THIS CLAIM OF THE ASSESSEE NOR ANY EVIDENCE HAS BEE N BROUGHT ON RECORD BY THE ASSESSEE TO THIS EFFECT. THE ASSESSEE HAS ALSO FAILED TO SHOW THAT SOME DOCUMENTARY EVIDENCES WERE FILED BEFORE THE A.O., I N THIS REGARD. IT IS FURTHER NOTED THAT THE LD. CIT HAS MERELY RESTORED THIS ISSUE TO THE FILE OF A.O. TO DECIDE THE SAME AFRESH AS PER LAW. IN THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT IS A CASE OF LACK OF ENQUIRY, WHICH BY IT-SELF RENDERS AN ASSESSMENT ORDER BOTH E RRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OUR VI EW IS DULY SUPPORTED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE C ASE OF MALABAR INDUSTRIAL COMPANY AS REPORTED 243 ITR 83, AND BY T HE DECISION OF THE PAGE 4 OF 4 FULL BENCH OF HON'BLE DELHI HIGH COURT IN THE CASE OF KELVINATOR INDIA LIMITED. ACCORDINGLY, WE CONFIRM THE ORDER OF THE L D. CIT. THUS, THIS GROUND OF THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 9 TH OCTOBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :9 TH OCTOBER, 2009. CPU* 8D10