ITO, New Delhi V. M/s. Modipon Ltd., Ghaziabad

ITA 4707/DEL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5418 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 30-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 27-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: SANTOSH AGGARWAL
• Keywords: Tangible material; Revenue expenditure; Capital expenditure
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SH.BHAVNESH SAINI, JUDICIAL MEMBER AND SH.O.P.KANT, ACCOUNTANT MEMBER ITA NO.4707/DEL/2014 [ASSESSMENT YEAR: 2006-07] APPLICANT BY SH.S.R.SENAPATI, SR.DR RESPONDENT BY SH. SANTOSH AGGARWAL, ADV. DATE OF HEARING 25.04.2018 DATE OF PRONOUNCEMENT 26 .04.2018 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD.CIT(A)-VIII, NEW DELHI DATED 27.06.2014 FOR AY 2 006-07 ON THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITIONS OF RS .40,20,559/- MADE BY THE A.O. ON ACCOUNT OF COPS WRITTEN OFF? 1.1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) HAS IGNORED THAT THE ASSESSEE COMPANY HAD CL AIMED THIS EXPENDITURE AS CAPITAL EXPENDITURE IN THE EARLIER Y EARS WHEREAS IN THIS YEAR THE SAME CLAIMED AS REVENUE EXPENDITURE? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,3 1,57,122/- MADE BY THE AO ON ACCOUNT OF DATA ACCESS EXPENSES? 2.1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) HAS IGNORED THAT THE AUDITOR OF THE COMPANY HAD TREATED THE ITO, WARD-5(4), NEW DELHI. VS MODIPON LTD. HAPUR ROAD, MODI NAGAR, GHAZIABAD-201204. PAN-AAACM2069E (APPLICANT) (RESPONDENT) ITA NO.4707/DEL/2014 PAGE | 2 PAYMENT AS ROYALTY WHEREAS THE ASSESSEE COMPANY HAD CLAIMED THE SAME AS EXPENDITURE FOR RE-REGISTRATION FEES FO R PRODUCTS? 2. IN THIS CASE, THE AO PASSED RE-ASSESSMENT ORDER U/S 143(3)/147 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) DATED 29.11.2 012 BY MAKING THE ABOVE TWO ADDITIONS ON WHICH THE REVENUE FILED THE APPEAL . THE ASSESSEE CHALLENGED BOTH THE ADDITIONS BEFORE LD.CIT(A) AS WELL AS CHAL LENGED THE RE-OPENING OF THE ASSESSMENT IN THE MATTER. LD.CIT(A) WHILE ADJUDICA TING THE RE-OPENING OF THE ASSESSMENT U/S 147/148 OF THE ACT HELD THAT SINCE THE AO HAD MADE RE- ASSESSMENT BY ISSUING NOTICE U/S 148 AFTER 4 YEARS OF END OF THE AY 2006-07 WHERE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 26.12.2008 WITHOUT ANY FRESH AND TANGIBLE MATERIAL THE ACTION OF THE A O IS BAD IN LAW AND ILLEGAL. HOWEVER, I WILL DISCUSS THE ADDITIONS MADE BY AO ON MERITS ALSO. 3. LD.CIT(A) EVEN ON MERITS DELETED BOTH THE ADDITI ONS. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. L D.CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT RE-ASSESSMENT ORDER IS BAD IN LAW AND ILLEGAL. EVEN THEREAFTER, HE HAS DELETED BOTH THE ADDITIONS ON MERITS. THE REVENUE IN THE DEPARTMENTAL APPEAL HAS NOT CHALLENGED THE FIND INGS OF LD.CIT(A) AS REGARDS THE RE-OPENING OF THE ASSESSMENT IS BAD IN LAW AND ILLEGAL. LD. SR. DR CONTENDED THAT THE REPLY FROM THE AO WAS NOT RECEIV ED AS TO WHY THE ISSUE OF SECTION 147 OF THE ACT, HAS NOT BEEN RAISED IN THE DEPARTMENTAL APPEAL. IT IS, THEREFORE, CLEAR THAT THE FINDINGS OF THE LD.CIT(A) HAVE BEEN ACCEPTED BY THE DEPARTMENT BY NOT CHALLENGING THE FINDINGS ON RE-OP ENING OF THE ASSESSMENT BEFORE TRIBUNAL. ONCE RE-ASSESSMENT ORDER IS HELD TO BE BAD IN LAW AND ILLEGAL, ITA NO.4707/DEL/2014 PAGE | 3 THERE WAS NO NEED TO DECIDE THE ADDITIONS ON MERIT. IN THE ABSENCE OF ANY CHALLENGE IN THESE FINDINGS IN THE DEPARTMENTAL APP EAL, BOTH GROUNDS RAISED BY THE REVENUE ARE ACADEMIC IN NATURE AND NO INFERENCE IS CALLED FOR IN THE MATTER. THE DEPARTMENTAL APPEAL IS NOT MAINTAINABL E IN THE PRESENT FORUM. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P.KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* DATE:-26.04.2018 COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) CONCERNED 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI