M/S. INDIA PISTONS LTD., CHENNAI V. ACIT, CC - 2(3), CHENNAI

ITA 3389/CHNY/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9500 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-10-2022
• Assessment Year: 1999-2000
• Appeal Filed On: 16-12-2019
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं ᮰ी जी. मंजुनाथ, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.: 3389/CHNY/2019 िनधाᭅरण वषᭅ/Assessment Year: 1999-2000 India Pistons Ltd., Huzur Gardens, Sembium, Perambur, Chennai – 600 011. PAN: AAACI 1439E vs. The ACIT, Corporate Circle-2(3), Chennai (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri Vikram Vijayaraghavan, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri P. Sajit Kumar, JCIT स ु नवाई कȧ तारȣख/Date of Hearing : 31.10.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 31.10.2022 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-6, Chennai, in ITA No.79/CIT(A)-6/2009-10 dated 19.09.2019. The assessment was framed by the ACIT, Company Circle-II(3), Chennai for the assessment year 1999-2000 u/s.143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 11.12.2009. 2 ITA No.3389/Chny/2019 2. The first issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO in disallowing the pre- operative expenses of existing business claimed in respect of expansion of existing business at Sengundram, Chennai. For this, assessee has raised following ground:- “Rejecting the entire claim of pre operative expenses of Rs.2,89,03,774/- in respect of the expansion of the existing business at Sengundram, Chennai and granting deduction u/s.35D at 5%” 3. We have heard rival contentions and gone through facts and circumstances of the case. Now before us, the ld.counsel for the assessee made only one submission that the order of CIT(A) is ex- parte and the finding of CIT(A) that new plant for manufacture of Rink Blank has been set up by the assessee and claimed the same to new industrial undertaking due to gross total income being negative, deduction u/s.80IA of the Act has not been claimed. According to ld.counsel, the AO as well as the CIT(A) has not considered that the alleged pre-operative expenses of Rs.2,89,03,774/- are actually in respect of expansion of existing business at Sengundram, Chennai on which the CIT(A) has allowed deduction u/s.35D @ 5%. The ld.counsel for the assessee took us through ground Nos.2 to 5 raised before CIT(A), which is adjudicated at para 6.4 to 6.8 and stated that the entire premise of the authorities below is wrong that this is a new project. On the 3 ITA No.3389/Chny/2019 other hand, the ld.Senior DR relied on the assessment order and the order of CIT(A). 4. We noted that the order of CIT(A) is ex-parte and moreover the CIT(A) has not gone into the fact whether the project at Sengundram, Chennai is expansion of the existing business of the assessee or which is altogether a new project. The CIT(A) has not examined the interlacing of funds, common management and common shareholding of the company and the details of installation of project i.e., expansion of existing business. In the absence of all these, we cannot reach to a point to decide the allowance of claim of expenses of Rs.2,89,03,774/-. Hence, in this regard, we set aside this issue back to the file of the CIT(A) who will examine these facts and then, will decide the issue afresh after allowing reasonable opportunity of being heard to the assessee. This issue of assessee’s appeal is allowed for statistical purposes. 5. The next issue in this appeal of assessee is as regards to the assessment of book profit and increase by an amount of Rs.54,61,636/- being the amount of sale adjusted against the pre- operative expenses capitalized in the books of accounts. For this, assessee has raised following ground:- 4 ITA No.3389/Chny/2019 “Book profit should be increased by an amount of Rs.54,61,636/- being the amount of sales adjusted against preoperative expenses capitalized in the books of accounts, for computing the book profits for the purpose of Section 115JA.” 6. As in the above issue, this issue is also interconnected with the amount of sale adjusted against pre-operative expenses capitalized and the above issue is going back to the file of the CIT(A), as contended by ld.counsel for the assessee and ld. Senior DR, we are restoring this issue also back to the file of the CIT(A), who will decide afresh after allowing reasonable opportunity of being heard to the assessee. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 31 st October, 2022 at Chennai. Sd/- Sd/- (जी. मंजुनाथ) (G. MANJUNATHA) लेखा सद᭭य/ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 31 st October, 2022 RSR आदेशकᳱᮧितिलिपअᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकरआयुᲦ (अपील)/CIT(A) 4. आयकरआयुᲦ /CIT 5. िवभागीयᮧितिनिध/DR 6. गाडᭅफाईल/GF.