SUNBEAM MONOCHEM P. LTD., MUMBAI V. ACIT, CIRCLE 8(2)(2), MUMBAI

ITA 524/MUM/2023

AI Insights

The case involves two appeals by Sunbeam Monochem (P) Ltd. against the orders of the Ld. Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, Delhi, for the assessment years 2015-16 and 2017-18. The primary issues in dispute were the disallowance of repairs expenses and the treatment of certain additions as capital in nature. The Tribunal found that the additions made by the Assessing Officer following the order under section 263 were not sustainable and set aside the order of the Ld. PCIT. Additionally, for the assessment year 2017-18, the Tribunal acknowledged the voluntary disallowance made by the assessee and directed the Assessing Officer to adjust the same in the computation of taxable income.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123592 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 23-04-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 21-02-2023
• Other Referred Cases: Vania Silk Mills (P.) Ltd. v. CIT (191 ITR 647)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revision of order; Depreciation; Capital receipt; Revised return; Set aside; Capital Gains
• Section: 263; 144; 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 524 & 525/MUM/2023 Assessment Year: 2015-16 & 2017-18 Sunbeam Monochem (P) Ltd., 201/B Runwal & Omkar E- Square, Opp. Sion Chunabhatti Singnal, Eastern Express Highway, Sion (E) Mumbai-400 002. Vs. ACIT, Circle-8(2)(2), Aayakar Bhavan, Mumbai-400020. PAN No. AABCS 8172 P Appellant Respondent Assessee by : Mr. Mayur Makadia, AR Revenue by : Mr. Paresh Deshpande, DR Date of Hearing : 24/04/2023 Date of pronouncement : 27/04/2023 ORDER PER OM PRAKASH KANT, AM These two appeals by the assessee are directed against two separate orders, both dated 21.12.2022, passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16 and 2017-18 respectively. Both these appeals being connected to single assessee, same were heard together and disposed off by way of this order for convenience. 2. The grounds of appeal raised in ITA No. 524/Mum/2023 are reproduced as under: 1. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the additions in respect o (irrecoverable portion of loan along with interest) of Rs. 21,38,381 without appreciating the facts and merits of the case and erroneously considering it of capital nature even the loan was offered to provided in the normal course of business. 2. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the disallowance of repairs expenses incurred in respect of Plant and Machinery and building written aggregating to Rs.63,16,537 by wrongly considering it as capital in nature. 3. Before us, the Ld. Counsel of the assessee submitted that the appeal was decided ground No. 1, the Ld. Counsel of the assessee submitted that assessee is not interested in pursuing this ground and accordingly it withdrawn this ground. assessee is accordingly dismissed as withdrawn. 4. As far as ground No. 2 of the appeal is concerned Counsel of the assessee submitted that this addition has been made by the Assessing Officer in the assessment order passed in consequent to order u/s 263 passed by the Ld. PCIT. He further submitted that on further appeal by the assessee against the order u/s 263 before the ITAT, the issue raised in ground No. 2 has been Sunbeam Monochem (P) Ltd. ITA No. The grounds of appeal raised in ITA No. 524/Mum/2023 are reproduced as under: On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the additions in respect of bad debts written off (irrecoverable portion of loan along with interest) of Rs. 21,38,381 without appreciating the facts and merits of the case and erroneously considering it of capital nature even though the interest earned from the loan was offered to tax and the loan was provided in the normal course of business. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the disallowance of repairs expenses incurred in respect of Plant and Machinery and building written off (including restoration expenses) aggregating to Rs.63,16,537 by wrongly considering it as capital in nature. Before us, the Ld. Counsel of the assessee submitted that the decided ex-parte by the Ld. CIT(A). Regarding the ground No. 1, the Ld. Counsel of the assessee submitted that assessee is not interested in pursuing this ground and accordingly withdrawn this ground. Thus, this ground of appeal of the assessee is accordingly dismissed as withdrawn. As far as ground No. 2 of the appeal is concerned Counsel of the assessee submitted that this addition has been made by the Assessing Officer in the assessment order passed in consequent to order u/s 263 passed by the Ld. PCIT. He further ted that on further appeal by the assessee against the order u/s 263 before the ITAT, the issue raised in ground No. 2 has been Sunbeam Monochem (P) Ltd. 2 ITA No. 524& 525/Mum/2023 The grounds of appeal raised in ITA No. 524/Mum/2023 are On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the f bad debts written off (irrecoverable portion of loan along with interest) of Rs. 21,38,381 without appreciating the facts and merits of the case and erroneously considering it of hough the interest earned from tax and the loan was On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the disallowance of repairs expenses incurred in respect of Plant and Machinery and building off (including restoration expenses) aggregating to Rs.63,16,537 by wrongly Before us, the Ld. Counsel of the assessee submitted that the A). Regarding the ground No. 1, the Ld. Counsel of the assessee submitted that assessee is not interested in pursuing this ground and accordingly ground of appeal of the As far as ground No. 2 of the appeal is concerned, the Ld. Counsel of the assessee submitted that this addition has been made by the Assessing Officer in the assessment order passed in consequent to order u/s 263 passed by the Ld. PCIT. He further ted that on further appeal by the assessee against the order u/s 263 before the ITAT, the issue raised in ground No. 2 has been cancelled by the ITAT in ITA No. 624/Mum/2021 and therefore, the addition made by the Assessing Officer cannot survive. 5. We have heard rival submission of the parities on the issue dispute and perused the relevant material on record. We find that in consequent order u/s 263 of the Act passed by the Ld. PCIT, the Assessing Officer has passed the impugned assessment order passed u/s 144 r.w.s. 263 of the Act dated 2 additions including the disallowance of repair expense in respect of plant and machinery (Rs.46,81,751/-. ) totalling ex-partee order upheld the finding of the Assessing Officer without taking into consideration submission of the assessee. We find that the assessee challenged the finding of the Ld. PCIT on the issues including the issue of disallowance in respect of machinery and building written off. The ITAT vide its order dated 10.03.2023 in the case of the assessee has set aside the order of the Ld. PCIT to the extent of addition in dispute. The relevant finding of the Tribunal is reproduced as under: “18. On these given facts, we find merit in the plea of the assessee that, not only did the AO make enquiries on this issue but even the view taken by the AO in accepting the allowability of expenditure was a plausible view in law. 19. The Ld. AR further po placed by the Ld. PCIT on Section 45(1A) of the Act was misplaced and distinguishable in the given facts of the present case. Taking us through the legislative history, he brought to our notice that, the Hon’ble Supreme C Sunbeam Monochem (P) Ltd. ITA No. cancelled by the ITAT in ITA No. 624/Mum/2021 and therefore, the addition made by the Assessing Officer cannot survive. ve heard rival submission of the parities on the issue dispute and perused the relevant material on record. We find that in consequent order u/s 263 of the Act passed by the Ld. PCIT, the Assessing Officer has passed the impugned assessment order u/s 144 r.w.s. 263 of the Act dated 25.03.2022 including the disallowance of repair expense in respect of plant and machinery( Rs.16,34,786/- ) and building written off . ) totalling to Rs.61,60,537/-. The Ld. CIT(A) i order upheld the finding of the Assessing Officer without taking into consideration submission of the assessee. We find that the assessee challenged the finding of the Ld. PCIT on the issues including the issue of disallowance in respect of machinery and building written off. The ITAT vide its order dated 10.03.2023 in the case of the assessee has set aside the order of the Ld. PCIT to the extent of addition in dispute. The relevant finding of the Tribunal is reproduced as under: On these given facts, we find merit in the plea of the assessee that, not only did the AO make enquiries on this issue but even the view taken by the AO in accepting the allowability of expenditure was a plausible view in law. The Ld. AR further pointed out to us that, the reliance placed by the Ld. PCIT on Section 45(1A) of the Act was misplaced and distinguishable in the given facts of the present case. Taking us through the legislative history, he brought to our notice that, the Hon’ble Supreme C Sunbeam Monochem (P) Ltd. 3 ITA No. 524& 525/Mum/2023 cancelled by the ITAT in ITA No. 624/Mum/2021 and therefore, the addition made by the Assessing Officer cannot survive. ve heard rival submission of the parities on the issue-in- dispute and perused the relevant material on record. We find that in consequent order u/s 263 of the Act passed by the Ld. PCIT, the Assessing Officer has passed the impugned assessment order 5.03.2022 and made including the disallowance of repair expense in respect of and building written off The Ld. CIT(A) in the order upheld the finding of the Assessing Officer without taking into consideration submission of the assessee. We find that the assessee challenged the finding of the Ld. PCIT on the issues including the issue of disallowance in respect of plant and machinery and building written off. The ITAT vide its order dated 10.03.2023 in the case of the assessee has set aside the order of the Ld. PCIT to the extent of addition in dispute. The relevant On these given facts, we find merit in the plea of the assessee that, not only did the AO make enquiries on this issue but even the view taken by the AO in accepting the allowability of expenditure was a plausible view in law. inted out to us that, the reliance placed by the Ld. PCIT on Section 45(1A) of the Act was misplaced and distinguishable in the given facts of the present case. Taking us through the legislative history, he brought to our notice that, the Hon’ble Supreme Court in the case of Vania Silk Mills (P.) Ltd. v. CIT (191 ITR 647) had earlier held that the destruction of right on account of the destruction of an asset cannot be equated with the extinguishment of the right on account of its ‘transfer’ and that therefore, the receipt of insurance proceeds was held to be in the nature of capital receipt not liable to tax. In order to overcome the decision in Vania Silk Mills (supra), Section 45(1A) was inserted vide Finance Act, 1999 with effect from 01.04.2000. It is n Finance Bill, 1999 provided that, the said Section was inserted as various Courts had held that, there is no transfer when the asset is destroyed and that the money received under insurance policy is a compensation by virtue of contract of insurance and not a consideration for transfer. Section 45(1A) of the Act therefore provided a deeming fiction, that profits and gains arising from insurance compensation shall be taxed under the head 'capital gains.' The Ld. AR explained t the Legislature only sought to undo the ratio laid down in Vania Silk Mills (supra) in so far as the proposition that insurance compensation was not liable to tax. The Ld. AR, however, pointed out that, in the present c had received insurance proceeds of Rs.36,71,198/ in its entirety, had been offered to tax as business income, and therefore the provisions of Section 45(1A) of the Act had no application. 20. In this regard, the Ld. AR invited ou final survey report of M/s AB Phadake & Co, CA in which the auditor had reported the expenses incurred by the company and the final claim settled against it, which are as under: - Details Plant & Machinery Building Stock Fire fighting expenses Total Policy expenses Net claim received Sunbeam Monochem (P) Ltd. ITA No. case of Vania Silk Mills (P.) Ltd. v. CIT (191 ITR 647) had earlier held that the destruction of right on account of the destruction of an asset cannot be equated with the extinguishment of the right on account of its ‘transfer’ and ore, the receipt of insurance proceeds was held to be in the nature of capital receipt not liable to tax. In order to overcome the decision in Vania Silk Mills (supra), Section 45(1A) was inserted vide Finance Act, 1999 with effect from 01.04.2000. It is noted that the Memorandum to the Finance Bill, 1999 provided that, the said Section was inserted as various Courts had held that, there is no transfer when the asset is destroyed and that the money received under insurance policy is a compensation by virtue of contract of insurance and not a consideration for transfer. Section 45(1A) of the Act therefore provided a deeming fiction, that profits and gains arising from insurance compensation shall be taxed under the head 'capital gains.' The Ld. AR explained that, by insertion of section 45(1A), the Legislature only sought to undo the ratio laid down in Vania Silk Mills (supra) in so far as the proposition that insurance compensation was not liable to tax. The Ld. AR, however, pointed out that, in the present case, the assessee had received insurance proceeds of Rs.36,71,198/ in its entirety, had been offered to tax as business income, and therefore the provisions of Section 45(1A) of the Act had no application. In this regard, the Ld. AR invited our attention to the final survey report of M/s AB Phadake & Co, CA in which the auditor had reported the expenses incurred by the company and the final claim settled against it, which are as Expenses incurred Final claim settled by insuranc company Plant & Machinery 3026190 1391404 4793819 2828382 2333347 Fire fighting expenses 27600 10675991 3864419 Policy expenses - Net claim received 10675991 3671198 Sunbeam Monochem (P) Ltd. 4 ITA No. 524& 525/Mum/2023 case of Vania Silk Mills (P.) Ltd. v. CIT (191 ITR 647) had earlier held that the destruction of right on account of the destruction of an asset cannot be equated with the extinguishment of the right on account of its ‘transfer’ and ore, the receipt of insurance proceeds was held to be in the nature of capital receipt not liable to tax. In order to overcome the decision in Vania Silk Mills (supra), Section 45(1A) was inserted vide Finance Act, 1999 with effect from oted that the Memorandum to the Finance Bill, 1999 provided that, the said Section was inserted as various Courts had held that, there is no transfer when the asset is destroyed and that the money received under insurance policy is a compensation by virtue of contract of insurance and not a consideration for transfer. Section 45(1A) of the Act therefore provided a deeming fiction, that profits and gains arising from insurance compensation shall be taxed under the head 'capital gains.' hat, by insertion of section 45(1A), the Legislature only sought to undo the ratio laid down in Vania Silk Mills (supra) in so far as the proposition that insurance compensation was not liable to tax. The Ld. AR, ase, the assessee had received insurance proceeds of Rs.36,71,198/-, which in its entirety, had been offered to tax as business income, and therefore the provisions of Section 45(1A) of the Act had r attention to the final survey report of M/s AB Phadake & Co, CA in which the auditor had reported the expenses incurred by the company and the final claim settled against it, which are as Final claim settled by insurance 1391404 112068 2333347 27600 3864419 193221 3671198 21. The Ld. AR pointed out that, the insurance proceeds of Rs.36,71,198/ liable to tax. Instead, the entire proceeds were offered to tax by way of ‘business income’. Rather than crediting it separately in the accounts, insurance proceeds against the loss/expenses incurred in connection therewith [(1,06,75,991 Alternatively, the assessee could have claimed deduction for the expenses of Rs.1,06,75,991/ the insurance proceeds of Rs.36,71,198/ ways, the net result/ impact on the computation of business profits was the same. 22. Referring to the above table, the Ld. AR showed us that out of the total insurance proceeds of Rs.36,71,1 sum to the extent of Rs.25,54,168/ stock, fire-fighting expenses & policy expenses, which admittedly was in the revenue field and therefore was rightly offered and assessed to tax by way of ‘business income’. In so far as the r is concerned, it is noted that the same pertained to plant & machinery and building. The Ld. AR rightly pointed out that, the assessee had indeed offered the remaining sum of Rs.11,17,030/ the allegation of the Ld. PCIT that there was dual benefit claimed by the assessee is found to be patently erroneous. It is noted that, the insurance claim was lodged by the assessee having regard to the expenses incurred for restoration of the asse contention of the assessee that the proceeds received from the insurance company had intimate nexus with the repairs/expenses incurred by the assessee. Accordingly, the action of the AO in allowing the assessee’s treatment o the insurance proceeds as a business receipt and thereby netting it off against the expenses incurred cannot be said to be an unsustainable view in law. 23. The Ld. PCIT however, observed that, this sum ought to have been adjusted from the block of assets in terms of Section 45(1A) read with Section 50 of the Act. Accordingly, the depreciation claim to that extent ought to be reduced u/s 32 of the Act. By not doi the assessee had claimed dual benefit viz., excess claim of depreciation, which was impermissible in law. In this Sunbeam Monochem (P) Ltd. ITA No. The Ld. AR pointed out that, the insurance proceeds of Rs.36,71,198/- was never claimed as capital receipt not liable to tax. Instead, the entire proceeds were offered to tax by way of ‘business income’. Rather than crediting it separately in the accounts, the assessee netted off the insurance proceeds against the loss/expenses incurred in connection therewith [(1,06,75,991-36,71,198)=70,04,793]. Alternatively, the assessee could have claimed deduction for the expenses of Rs.1,06,75,991/- and separately off the insurance proceeds of Rs.36,71,198/- to tax. Any which ways, the net result/ impact on the computation of business profits was the same. Referring to the above table, the Ld. AR showed us that out of the total insurance proceeds of Rs.36,71,1 sum to the extent of Rs.25,54,168/- was towards damaged fighting expenses & policy expenses, which admittedly was in the revenue field and therefore was rightly offered and assessed to tax by way of ‘business income’. In so far as the remaining sum of Rs.11,17,030/ is concerned, it is noted that the same pertained to plant & machinery and building. The Ld. AR rightly pointed out that, the assessee had indeed offered the remaining sum of Rs.11,17,030/- by way of ‘business income’ and the the allegation of the Ld. PCIT that there was dual benefit claimed by the assessee is found to be patently erroneous. It is noted that, the insurance claim was lodged by the assessee having regard to the expenses incurred for restoration of the assets. Hence, we find merit in the contention of the assessee that the proceeds received from the insurance company had intimate nexus with the repairs/expenses incurred by the assessee. Accordingly, the action of the AO in allowing the assessee’s treatment o the insurance proceeds as a business receipt and thereby netting it off against the expenses incurred cannot be said to be an unsustainable view in law. Ld. PCIT however, observed that, this sum ought to have been adjusted from the block of assets in terms of Section 45(1A) read with Section 50 of the Act. Accordingly, the depreciation claim to that extent ought to be reduced u/s 32 of the Act. By not doing so, according to Ld. PCIT, the assessee had claimed dual benefit viz., excess claim of depreciation, which was impermissible in law. In this Sunbeam Monochem (P) Ltd. 5 ITA No. 524& 525/Mum/2023 The Ld. AR pointed out that, the insurance proceeds was never claimed as capital receipt not liable to tax. Instead, the entire proceeds were offered to tax by way of ‘business income’. Rather than crediting it the assessee netted off the insurance proceeds against the loss/expenses incurred in 36,71,198)=70,04,793]. Alternatively, the assessee could have claimed deduction and separately offered to tax. Any which ways, the net result/ impact on the computation of business Referring to the above table, the Ld. AR showed us that out of the total insurance proceeds of Rs.36,71,198/-, a was towards damaged fighting expenses & policy expenses, which admittedly was in the revenue field and therefore was rightly offered and assessed to tax by way of ‘business emaining sum of Rs.11,17,030/- is concerned, it is noted that the same pertained to plant & machinery and building. The Ld. AR rightly pointed out that, the assessee had indeed offered the remaining sum of by way of ‘business income’ and therefore the allegation of the Ld. PCIT that there was dual benefit claimed by the assessee is found to be patently erroneous. It is noted that, the insurance claim was lodged by the assessee having regard to the expenses incurred for ts. Hence, we find merit in the contention of the assessee that the proceeds received from the insurance company had intimate nexus with the repairs/expenses incurred by the assessee. Accordingly, the action of the AO in allowing the assessee’s treatment of the insurance proceeds as a business receipt and thereby netting it off against the expenses incurred cannot be said Ld. PCIT however, observed that, this sum ought to have been adjusted from the block of assets in terms of Section 45(1A) read with Section 50 of the Act. Accordingly, the depreciation claim to that extent ought to be reduced ng so, according to Ld. PCIT, the assessee had claimed dual benefit viz., excess claim of depreciation, which was impermissible in law. In this regard, the Ld. AR alternatively argued that, even if the Ld. PCIT’s proposition is taken to its logical conclus provisions of Section 45(1A) read with Section 50 of the Act is held to be applicable, then also there is no prejudice being caused to the interests of the Revenue. He pointed out that, the sum of Rs.11,17,030/ ‘business income’ would then have to be otherwise reduced from the computation of income under the head ‘Profits & Gains of Business’. Correspondingly, it would have been adjusted from block of assets in terms of Section 45(1A) read with Section 50 of the Act Gains, if any, or there would be a resultant decrease in the claim of depreciation. The Ld. AR demonstrated that, by doing so, the resultant decrease in claim of depreciation would be comparatively lesser than the exclusion/ deduction of the sum of Rs.11,17,030/ income’. Consequently, the taxable income/loss for the relevant year would in fact stand further reduced. Having regard to the aforesaid explanation, we find merit in the Ld. AR’s alternative plea as well, caused to the interests of the Revenue by the AO’s action of assessing the insurance proceeds under the head ‘Business Income’. 24. Overall, therefore, we note that, not only the AO had enquired into this particular issue but he of the views permissible in law. As noted above, the premise of the Ld. PCIT was based on the incorrect assumption of fact, and also the reasoning given by the Ld. PCIT for restoring this issue for fresh examination, is held to be unjustified. Accordingly, the order of the Ld. PCIT with reference to the second (2nd) issue is therefore set aside and accordingly cancelled. 5.1 Since, the revision of the assessment order u/s 263 of the Act to the extent of plant and machinery and building wr been cancelled by the ITAT (supra), the addition made in the consequent assessment order passed by the Assessing Officer Sunbeam Monochem (P) Ltd. ITA No. regard, the Ld. AR alternatively argued that, even if the Ld. PCIT’s proposition is taken to its logical conclusion and the provisions of Section 45(1A) read with Section 50 of the Act is held to be applicable, then also there is no prejudice being caused to the interests of the Revenue. He pointed out that, the sum of Rs.11,17,030/- which was offered to tax as iness income’ would then have to be otherwise reduced from the computation of income under the head ‘Profits & Gains of Business’. Correspondingly, it would have been adjusted from block of assets in terms of Section 45(1A) read with Section 50 of the Act and offered as ‘Capital Gains, if any, or there would be a resultant decrease in the claim of depreciation. The Ld. AR demonstrated that, by doing so, the resultant decrease in claim of depreciation would be comparatively lesser than the exclusion/ on of the sum of Rs.11,17,030/- from the ‘business income’. Consequently, the taxable income/loss for the relevant year would in fact stand further reduced. Having regard to the aforesaid explanation, we find merit in the Ld. AR’s alternative plea as well, that there is no prejudice caused to the interests of the Revenue by the AO’s action of assessing the insurance proceeds under the head ‘Business Overall, therefore, we note that, not only the AO had enquired into this particular issue but he had adopted one of the views permissible in law. As noted above, the premise of the Ld. PCIT was based on the incorrect assumption of fact, and also the reasoning given by the Ld. PCIT for restoring this issue for fresh examination, is held to ied. Accordingly, the order of the Ld. PCIT with reference to the second (2nd) issue is therefore set aside and accordingly cancelled.” Since, the revision of the assessment order u/s 263 of the Act to the extent of plant and machinery and building wr by the ITAT (supra), the addition made in the consequent assessment order passed by the Assessing Officer Sunbeam Monochem (P) Ltd. 6 ITA No. 524& 525/Mum/2023 regard, the Ld. AR alternatively argued that, even if the Ld. ion and the provisions of Section 45(1A) read with Section 50 of the Act is held to be applicable, then also there is no prejudice being caused to the interests of the Revenue. He pointed out which was offered to tax as iness income’ would then have to be otherwise reduced from the computation of income under the head ‘Profits & Gains of Business’. Correspondingly, it would have been adjusted from block of assets in terms of Section 45(1A) and offered as ‘Capital Gains, if any, or there would be a resultant decrease in the claim of depreciation. The Ld. AR demonstrated that, by doing so, the resultant decrease in claim of depreciation would be comparatively lesser than the exclusion/ from the ‘business income’. Consequently, the taxable income/loss for the relevant year would in fact stand further reduced. Having regard to the aforesaid explanation, we find merit in the Ld. that there is no prejudice caused to the interests of the Revenue by the AO’s action of assessing the insurance proceeds under the head ‘Business Overall, therefore, we note that, not only the AO had had adopted one of the views permissible in law. As noted above, the premise of the Ld. PCIT was based on the incorrect assumption of fact, and also the reasoning given by the Ld. PCIT for restoring this issue for fresh examination, is held to ied. Accordingly, the order of the Ld. PCIT with reference to the second (2nd) issue is therefore set aside Since, the revision of the assessment order u/s 263 of the Act to the extent of plant and machinery and building written off has by the ITAT (supra), the addition made in the consequent assessment order passed by the Assessing Officer cannot survive. Accordingly, the addition made by the Assessing Officer and upheld by the Ld. CIT(A) is deleted. The orde PCIT on the issue-in No. 2 of the appeal of the assessee is accordingly allowed. 6. Now we take up the appeal of the assessee for assessment year 2017-18. The grounds raised by the assessee are rep as under: 1. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the additions u/s 14A amounting to § 4,25,610 without appreciating that the Appellant has voluntary made the disallowance u/s 14A r.w.r. 8D amoun double addition which is not permitted. 7. Briefly stated, facts of the case are that the Assessing Officer made disallowance amounting to Rs.4,25,610/ in the assessment order passed u/s 143(3 30.11.2019. On further appeal, the assessee requested that the amount of suo motu disallowance of Rs.3,71,661/ which was added in the revised return of income and not been considered by the Assessing Officer. The Ld. CIT the appeal observing as under: “7. The facts of the case as noted above are that the appellant has not pursued the appeal despite being granted several opportunities. No details, documents or submissions have been provided to come to an those arrived at by the assessing officer in the assessment order. Being quite aware of these facts and the possible conclusions that may be drawn the assessee did not file any written submissions. That clearly connotes that the ass Sunbeam Monochem (P) Ltd. ITA No. cannot survive. Accordingly, the addition made by the Assessing Officer and upheld by the Ld. CIT(A) is deleted. The orde in-dispute is accordingly set aside. The ground No. 2 of the appeal of the assessee is accordingly allowed. Now we take up the appeal of the assessee for assessment 18. The grounds raised by the assessee are rep 1. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the additions u/s 14A amounting to § 4,25,610 without appreciating that the Appellant has voluntary made the disallowance u/s 14A r.w.r. 8D amounting to Rs. 3,71,661 and thereby there is a double addition which is not permitted. Briefly stated, facts of the case are that the Assessing Officer made disallowance amounting to Rs.4,25,610/- u/s 14A of the Act in the assessment order passed u/s 143(3) of the Act dated 30.11.2019. On further appeal, the assessee requested that the amount of suo motu disallowance of Rs.3,71,661/- may be allowed, added in the revised return of income and not been considered by the Assessing Officer. The Ld. CIT(A) however decided the appeal observing as under: 7. The facts of the case as noted above are that the appellant has not pursued the appeal despite being granted several opportunities. No details, documents or submissions have been provided to come to any conclusion other than those arrived at by the assessing officer in the assessment order. Being quite aware of these facts and the possible conclusions that may be drawn the assessee did not file any written submissions. That clearly connotes that the ass Sunbeam Monochem (P) Ltd. 7 ITA No. 524& 525/Mum/2023 cannot survive. Accordingly, the addition made by the Assessing Officer and upheld by the Ld. CIT(A) is deleted. The order of the Ld. dispute is accordingly set aside. The ground No. 2 of the appeal of the assessee is accordingly allowed. Now we take up the appeal of the assessee for assessment 18. The grounds raised by the assessee are reproduced 1. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the additions u/s 14A amounting to § 4,25,610 without appreciating that the Appellant has voluntary made the disallowance u/s 14A ting to Rs. 3,71,661 and thereby there is a Briefly stated, facts of the case are that the Assessing Officer u/s 14A of the Act ) of the Act dated 30.11.2019. On further appeal, the assessee requested that the may be allowed, added in the revised return of income and not been (A) however decided 7. The facts of the case as noted above are that the appellant has not pursued the appeal despite being granted several opportunities. No details, documents or submissions y conclusion other than those arrived at by the assessing officer in the assessment order. Being quite aware of these facts and the possible conclusions that may be drawn the assessee did not file any written submissions. That clearly connotes that the assessee deems itself to be on weak footing and thus remained incommunicado. The non what it claims in the appellate form, is quite incomprehensible. The department in the absence of any pursuance in the matter of any sort ev passing order is left with no choice but to finalize the case against the assessee. There is no evidence propounded in respect of what was claimed in the "Statement of Facts" namely disallowance of Rs. 3,71,661/ Merely stating, to that effect, does not suffice. That has to be backed by suitable evidences and judicial precedents, if any, in support. This has not been done by the assessee. The AO's order needs no intervention. There is nothing to rebut what had been arr and sufficient opportunities. The findings, in respect of all the above issues, clearly require no intervention. 8. Before us, the Ld. Counsel of the assessee revised computation of the total income and submitted that suo motu disallowance of Rs.3,71,661/ computing the taxable income and therefore, relief to that extent may be allowed. 9. We have heard rival submiss dispute and perused the relevant material on record. Before us, the assessee is only seeking exclusion of the amount which was already added suo motu towards disallowance u/s 14A of the Act amounting to Rs.3,71,661/ we have verified that the amount of Rs. Rs.3,71,661/ in the computation of the taxable income and therefore the addition made by the Assessing Officer to the extent of Rs.3,71,661/ give benefit of Rs.3,71,661/ Sunbeam Monochem (P) Ltd. ITA No. deems itself to be on weak footing and thus remained incommunicado. The non-chalance of the assessee, despite what it claims in the appellate form, is quite incomprehensible. The department in the absence of any pursuance in the matter of any sort even till the date of passing order is left with no choice but to finalize the case against the assessee. There is no evidence propounded in respect of what was claimed in the "Statement of Facts" namely disallowance of Rs. 3,71,661/- us 14A of the Act. ly stating, to that effect, does not suffice. That has to be backed by suitable evidences and judicial precedents, if any, in support. This has not been done by the assessee. The AO's order needs no intervention. There is nothing to rebut what had been arrived at by the AO after diligent enquiries and sufficient opportunities. The findings, in respect of all the above issues, clearly require no intervention.” Before us, the Ld. Counsel of the assessee filed a copy of the revised computation of the total income and submitted that suo motu disallowance of Rs.3,71,661/- was already added while computing the taxable income and therefore, relief to that extent We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. Before us, the assessee is only seeking exclusion of the amount which was already added suo motu towards disallowance u/s 14A of the Act amounting to Rs.3,71,661/-. From the documents filed before us , we have verified that the amount of Rs. Rs.3,71,661/ in the computation of the taxable income and therefore the addition made by the Assessing Officer u/s 14A of the Act has to be reduced 3,71,661/-. We direct the Assessing Officer to give benefit of Rs.3,71,661/- already included by the assessee in Sunbeam Monochem (P) Ltd. 8 ITA No. 524& 525/Mum/2023 deems itself to be on weak footing and thus remained chalance of the assessee, despite what it claims in the appellate form, is quite incomprehensible. The department in the absence of any en till the date of passing order is left with no choice but to finalize the case against the assessee. There is no evidence propounded in respect of what was claimed in the "Statement of Facts" us 14A of the Act. ly stating, to that effect, does not suffice. That has to be backed by suitable evidences and judicial precedents, if any, in support. This has not been done by the assessee. The AO's order needs no intervention. There is nothing to rebut ived at by the AO after diligent enquiries and sufficient opportunities. The findings, in respect of all the filed a copy of the revised computation of the total income and submitted that suo was already added while computing the taxable income and therefore, relief to that extent ion of the parties on the issue-in- dispute and perused the relevant material on record. Before us, the assessee is only seeking exclusion of the amount which was already added suo motu towards disallowance u/s 14A of the Act m the documents filed before us , we have verified that the amount of Rs. Rs.3,71,661/- is included in the computation of the taxable income and therefore the addition has to be reduced . We direct the Assessing Officer to already included by the assessee in the revised return filed for the purpose of the computation of the total income after verification is accordingly allowed for statistical purposes. 10. In the result, the appeal of the assessee for assessment year 2015-16 is allowed partly 20217-18 is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 27/04/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Sunbeam Monochem (P) Ltd. ITA No. the revised return filed for the purpose of the computation of the after verification. The ground of appeal of the assessee ordingly allowed for statistical purposes. In the result, the appeal of the assessee for assessment year 16 is allowed partly, whereas appeal for assessment year 18 is allowed for statistical purposes. Order pronounced in the open Court on 27/04/2023. Sd/ KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Sunbeam Monochem (P) Ltd. 9 ITA No. 524& 525/Mum/2023 the revised return filed for the purpose of the computation of the . The ground of appeal of the assessee In the result, the appeal of the assessee for assessment year whereas appeal for assessment year 04/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai