AI Insights
The case involves Gujarat Infrapipes Pvt. Ltd., which faced multiple appeals concerning disallowances and additions made by the Deputy Commissioner of Income Tax, Vadodara. The primary issues revolved around the late deposit of employees' contributions to the Welfare Fund, the assumption of long-term capital gains on the sale of fixed assets, and the treatment of late delivery charges and revaluation of WIP. The Tribunal examined the decisions made by the CIT(A) and the arguments presented by both the assessee and the Revenue, ultimately deciding to uphold most of the CIT(A)'s decisions while dismissing the appeals on other grounds.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 125347 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 7 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-08-2023
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
C
Next Hearing Date
12-07-2023
Assessment Year
2016-2017
Appeal Filed On
15-12-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./I. T. A. Nos. 557 & 558 /Ahd/2020 ( नधा रण वष / A ss es sment Years : 2014 -1 5 & 20 16-17) M/ s . G uj a ra t I nf r a pi pe s Pvt . L t d. 89 , G I D C Es ta te , P or , V a do da r a बनाम/ Vs . T h e D e pu ty C o m m is s io n e r of I nc om e T a x C ir c l e- 1( 1) ( 1) , V a d oda r a था यी ले खा सं . / जी आ इ आ र सं. /P A N/ G I R N o . : A A B C G 0 7 9 5 J (अपीलाथ /Appellant) . . ( यथ / Respondent) & आयकर अपील सं./I. T. A. Nos. 588 & 589 /Ahd/2020 ( नधा रण वष / A ss es sment Years : 2014 -1 5 & 20 16-17) T h e D e pu t y C o mm is s i on e r o f I n c om e T a x C ir cl e - 1 ( 1 ) ( 1 ) , Va d o da r a बनाम/ Vs . M /s . G uj a r a t In f r a pi p e s Pv t . L t d . 8 9, G I D C Es ta te , P o r, R a ma ng a m d i, V a do da r a (अपीलाथ /Appellant) . . ( यथ / Respondent) Assessee by : Shri Tej Shah, AR Revenue by : Shri Rudolf D’Souza, CIT. D.R. & Smt. Chitra Soneji, Sr. DR स ु नवाई क तार ख / D a t e o f H e a r i ng 13/07/2023 घोषणा क तार ख /D a t e o f P ro n o u nc e me n t 10/08/2023 ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 2 - O R D E R PER BENCH: The instant cross appeals filed at the behest of the assessee & Revenue are directed against the orders both dated 14.09.2020 passed by the Ld. Commissioner of Income Tax (Appeals)-3, Vadodara (in short ‘CIT(A)’) arising out of the orders dated 30.12.2016 & 25.12.2018 passed by the DCIT/ACIT, Circle-1(1)(1), Vadodara under Section 143(3) of the Income Tax Act, 1961, (hereinafter referred to as ‘the Act’) for Assessment Years 2014-15 & 2016-17. 2. There are 3 to 5 days delay in preferring the appeals before us by the assessee. Considering the facts of minimum delay, the same is hereby condoned. 3. As all the appeals relate to identical set of facts and of the same assessee, these are heard analogously and are being disposed of by a common order for the sake of convenience. ITA No. 557/Ahd/2020 – A.Y. 2014-15 (Assessee’s Appeal) 4. The grounds of appeal raised by assessee are as under: “1. The Ld. CIT(A) has erred in law and in facts in disallowing a sum of Rs.12,16,581/- being the amount of Employees contribution to Welfare Fund paid beyond the due date under the relevant Acts. Your appellant therefore prays that the additions of Rs.12,16,581/- be deleted in the interest of justice. ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 3 - 2. The Ld. CIT(A) has erred in law and in facts, in assuming LTCG on sale of part of Fixed Assets at Rs.67,30,197/- and has not worked out LTCG and simply given direction to AO to verify the same. Your appellant prays that the addition of Rs.67,30,197/- be deleted in the interest of justice.” 5. The addition in respect of late payment of employees contribution to Welfare Fund under Section 36(1)(va) of the Act to the tune of Rs.12,16,581/- is the subject matter before us. 6. The assessee deducted welfare fund contributions, PF & ESIC from its employees but did not deposit the same in the Government Account within the prescribed period as per respective Laws. The details of such deduction to the tune of Rs.12,16,581/- as disallowed is appearing in the order passed by the Ld. AO has been upheld by the Ld. CIT(A). The contribution of employees has to be deposited within the prescribed time as per Provident Fund Act. The assessee failed to deposit the contribution of its employees on or before due date as prescribed under the respective laws and thus relying upon the judgment passed by the Hon’ble Jurisdictional High Court in Tax Appeal No. 637 of 2013 in the case of Gujarat State Road Transport Corporation & 10 other appeals, the employees contribution to the tune of Rs.12,16,581/- was added to the total income of the assessee. Further that, the assessee failed to submit any other law and / or judgment in support of deletion of addition as claimed and thus, respectfully relying upon the judgment passed by the Hon’ble Jurisdictional High Court in the case of Gujarat State Road Transport Corporation (supra), we find no ambiguity in the orders passed by the authorities below in adding the impugned amount to the total income of the assessee. This ground of appeal filed by the assessee, therefore, fails. ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 4 - 7. The order passed by the Ld. CIT(A) restoring the issue in regard to long term capital gain of Rs.67,30,197/- to the file of the Ld. AO for verifying the same is subject matter before us. 8. The issue relates to selling of land and building by the appellant whereupon no income was offered either under the head ‘short term capital gain’ or ‘long term capital gain’. Details were called for and addition to the tune of Rs.67,30,197/- was made on account of long term capital gain. At the time of hearing of the instant appeal, the Ld. Counsel appearing for the assessee very fairly submitted before us that he does not have any practical grievance against such order passed by the Ld. CIT(A). 9. Thus, taking into consideration the submission made by the Ld. AR, we do not find any reason to interfere with the order passed by the Ld. CIT(A) in remitting the issue to the file of the Ld. AO for fresh adjudication of the same. In the absence of any merit in the ground preferred by the assessee, the same is dismissed. 10. In the result, appeal preferred by assessee for A.Y. 2014-15 is dismissed. ITA No. 588/Ahd/2020 – A.Y. 2014-15 (Revenue’s appeal) 11. The Grounds of appeal raised by Revenue are as under: “1. “on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the disallowance of Rs.3,47,92,869/- for late delivery charges without taking note that the same is “penalty for breach of contract” and subsequent invoking of provisions of section 37(1) of the Act. ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 5 - 2. “on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the addition of Rs.20,71,60,970/- for revaluation of WIP without taking note that the same is an outcome of findings of survey action u/s 133A of the Act.” 12. The brief facts leading to the issue is this that during the course of assessment proceeding, the Ld. AO found that the appellant claimed Rs.3,47,92,869/- on account of late delivery charges. The explanation rendered by the assessee was not found to be acceptable and thus rejected and consequentially addition was made of the impugned amount. During the appellate proceeding, the assesse submitted to this effect that all the payments deduction towards delay in delivery is not a statutory default and it is not disallowable under Section 37(1) of the Act. The details in regard to such payment or deduction made on account of late delivery were also duly submitted. In fact, such late delivery charges were deducted from the sale value by the buyer on account of delay in delivery of goods on the basis of the contractual agreement entered into by and between the parties. It was further the case made out by the assessee that the said agreement cannot be treated as statutory penalty for breach of law / infraction / offence or prohibited by the law in terms of explanation under Section 37(1) of the Act. In the earlier year A.Ys. 2012-13 & 2013-14, such expenses were accepted by the Ld. AO which establishes that liquidated damages are incurred for breach of law. The issue found to be covered squarely by the judgment passed by the Jurisdictional High Court in the case of Pr.CIT vs. Mazda Ltd., reported in [2017] 86 taxmann.com 27 and thus with the following observation, the Ld. CIT(A) deleted the same: “5.3 I have considered the facts and circumstances of the case, the observations of the AO, submissions of the appellant, material available on record and the relevant judicial pronouncements on the above matter. During the course of assessment the AO noticed that the appellant had claimed Rs. 3,47,92,869/- on ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 6 - account late delivery charges Since the AO was not satisfied with the explanation of the appellant, the same was added back to the total income considering the same as penal in nature. 5.4 During the course of appellate proceedings, submissions were filed and are placed on record. Appellant's main contention is that all the payments or deduction towards the delay in delivery is not any statutory default and it is not disallowable u/s 37(1) of the Act. It has submitted details of such payment or deduction made on account of late delivery charges. The late delivery charges are deducted from the sale value by the buyer on account of delay in delivery of goods on the basis of contractual agreement entered into between and buyer and supplier and the same cannot be treated as a statutory penalty for breach of Law/Infraction of Law or an offence or prohibited by Law as per Explanation u/s 37(1) of the Act. It has further contended that the method of account followed by it is consistent and there is no change. In the Assessment Years 2012-13 and 2013-14 also assessment order u/s 143(3) were passed wherein this expense was accepted. I have perused the assessment order on this issue, AO has contended that assessee is accepting the fact that liquidated damages are incurred for breach of law, AO has produced assessee's submission on this issue in order itself'. However, assessee has nowhere admitted to breach of statutory law. Further AO has relied on the decision of Hn'ble Supreme Court1 in the case of Saurashtra Cement Ltd 192 TaxMan 300. In the assessment order itself AO has mentioned that in the said decision, Hn'ble SC has held that liquidated damages are capital in nature. Whereas, in the present case, AO has disallowed liquidated damages tinder explanation to section 37(1), treating the expenditure as offence which is prohibited by law. Clearly decision of Hn'ble SC cited supra is not applicable to the facts of the present case. 5.5 This issue stands squarely covered by the decision of jurisdictional Gujarat High Court. In the case of Mazda Ltd (86 iaxmann.com 27 / 250 Taxman 510} facts before Hn'ble Court were as follows, Assessee company was engaged in business of manufacturing and trading of machinery and machinery parts and manufacturing of drink concentrates. It claimed deduction under section 37(1) on account of liquidated damages on ground that said damages were expenses in nature of penalty imposed by different parties of assessee company for delaying delivery or late completion of terms and conditions of order. Assessing Officer opined that said damages were lit nature of penalty and same could not be considered for allowability under section 37(1). It was found that delay would occur due to multiple reasons such as delay in approval of drawings, delay in inspection and performance test of equipments by customer or authorized inspector or such like and, thus, in such kind of business, such unintended delay and resultant liability of assessee to pay damages was inbuilt feature and inherent pan of business and cannot be dissected or disassociated from assessee's normal business activities. Hn'ble Gujarat HC held that expenditure in question was purely in relation to assessee's normal business activity and was inherent part of its business transactions. Punjab and Haryana High Court in case of Jamna Auto Industries v. CIT (299 ITR 92 / 167 Taxman 192) highlighted the difference between the penalty for infraction of Jaw and damages for breach of contract in the context of deduction ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 7 - under section 37(1) of She Act. The Court held that whenever damages are (o be paid by an assessee for a breach of contract, such damages are treated to be normal expenses of business Appellant has cited plethora of ease laws in its favour. The same have been perused. 5.6 In view of the foregoing discussion and after considering the facts and circumstances of the ease, submissions filed by the appellant and the judicial pronouncement relied upon, I am of the considered view that the late delivery charges or deduction claimed by the appellant is purely on the basis of contractual obligation and is in the interest of its business. Considering the nature of business being conducted by the appellant, delay of small period in delivery may occur. But largely considering the business interest of appellant such late delivery charges or deduction on the basis of contractual obligation is nothing but business expenditure only. There is no violation of any statutory Law on the part of appellant, which attracts penalty and subsequent disallowances. Thus, the AO is directed to delete the addition made of Rs.3.47,92,869/- on account of late delivery charges. The appellant succeeds on this ground.” 13. Considering the business interest of the appellant, the late delivery charges or deduction on the basis of contractual agreement found to be business expenditure only and in the absence of any violation of any statutory provision on the part of the assessee, the impugned amount of addition of Rs.3,47,92,869/- was deleted by the Ld.CIT(A) which, in our considered opinion, is just and proper so as to warrant interference. This ground of appeal is found to devoid of any merit and, thus, dismissed. 14. The deletion of addition of Rs.20,71,60,970/-, on account of re- valuation of work-in-progress (WIP in short) is the subject matter before us. 15. The assessee is a manufacturer of special type of industrial pipe fittings and piping spools from ferrous and non-ferrous metals as per specific requirements of the customers. There is no standardization of products and therefore, after receipt of confirm orders and drawings from the customers, process of procuring required special kind of raw materials starts with aligning other productions schedules as stated by the assessee before the authorities ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 8 - below and before us as well. During the course of survey, one Mr. Ravi Jain, DGM Finance & Accounts of the company made statements that the assessee has been consistently valuing its WIP on 70% of the price and therefore Ld. AO formed a prima facie opinion that itself is the cause for revaluing the WIP to 100% of the price. Before the Ld. AO, the assessee contended that they receive orders from the customers quantity in pieces. They make sales bills in number of units. Their WIP is also in numbers which is valued as 70% of sale price of the piece. Neither they need to send any weigh to the customer as they receive orders in piece rate and thus don’t weight it. Show cause, therefore, was issued upon the assessee as to why the WIP valuation of WIP should not be made 100% of the price of the finished product as the product has already been processed. The assessee accepted the same to this effect that the valuation of 70% is adopted considering the fact that the valuation of inventories is to be made at cost. The value of WIP is to be further enhanced on account of the following to bring it to sale price level: i. Further cost required for finding the product, ii. packaging, and iii. The profit margin. As the products are not at the finished stage, the valuation at sales value is impermissible and would be against the principles of accounting. It was further contended by the assessee before the Ld. AO that the company is following this method since several years and has been accepted consistently in the assessments made in the past. In that view of the matter, there is no warrant for altering the accepted method on a consistent basis for several years. Apart from that, it was argued that the method of valuation of the closing stock cannot be done altering the same for the opening stock also as it would be mandatory to do the same. In alternation in the method enhancing ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 9 - the valuation of the closing stock would be reversed in subsequent years and the impact will be nullified. The addition has temporary impact on taxable income and the same is tax neutral and thus, addition is not warranted. However, such contention made by the assessee was not found to be acceptable and addition Rs.20,71,60,970/- was made by the Ld. AO upon re- valuation of closing stock at 100% instead of 70% as made by the assessee, which was reversed by the Ld. CIT(A). Hence, the instant appeal before us. 16. The Ld. DR vehemently argued against the deletion made by the Ld. CIT(A) and relied upon the order passed by the Ld. AO, sought to justify the addition made on re-valuation of WIP to 100% instead of 70%. According to him, the principle of consistency is not required to be followed here for valuation of opening stock, as the assessee was intentionally keeping its WIP undervalued for many years and, therefore, if any relief is given by upholding the order of deletion made by the Ld. CIT(A) the same would tantamount to loss of revenue. 17. Before us, the Ld. Advocate appearing for the assessee reiterated the submissions already made before the authorities below as we have already discussed hereinabove. It was further argued by the Ld. Counsel appearing for the assessee that without giving any clear finding, the Ld. AO enhanced the stock value to the sale price, neither he has considered the stage of stock found including its further processing cost at various stages, colour cost, packaging cost, including element of profit etc. and thus estimation on the basis of presumption and surmises is not sustainable. 18. We have heard the respective parties and perused the materials available on record. ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 10 - 19. We have further perused the submission made before the Ld. CIT(A) dated 13.07.2020, the same has been reproduced by the Ld. CIT(A), the relevant extract is as follows: ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 11 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 12 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 13 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 14 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 15 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 16 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 17 - 20. It further appears that the Ld. CIT(A) considering the entire aspect of the matter deleted the addition with the following observations: ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 18 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 19 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 20 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 21 - ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 22 - 21. Before us, Ld. Counsel appearing for the assessee relied upon the very many judgments passed by different judicial forums starting from the ITAT up to the Hon’ble Apex Court, namely, Oswal Woollen Mills Ltd., reported in 2 taxmann,com 130 (Punjab & Haryana High Court), Ema India Ltd., reported in 157 taxman 536 (Allahabad High Court) and Dynavision Ltd., reported in 348 ITR 380 (SC). In the case of Oswal Woollen Mills Ltd. (supra), addition was made by rejecting valuation of closing stock of WIP of assessee company. As the assessee was found to have applied same principle for valuation of opening stock, which was applied for valuation of closing stock and further same method was being applied consistently even in all subsequent years, non-acceptance of the valuation of WIP by the Ld. AO in the absence of any logical basis found to be not sustainable by the Ld. Tribunal, which was further upheld by the Hon’ble Punjab & Haryana High Court. Same analogy was also followed in Ema India Ltd. (supra), as the assessee was found to have followed consistent method of valuation which has been adopted in the year under consideration. Addition made by the Ld. AO was rejected. In the case of Dynavision Ltd. (supra), the Hon’ble Apex Court held that assessee had been consistently following method of valuation of stock and the Ld. AO revalued closing stock without making any adjustment to opening stock, any addition on account of under valuation of closing stock was unjustified. Needless to mention, the ratio is also applicable to the case in hand before us. Moreso, the appellant has undergone scrutiny for A.Ys. 2012-13 & 2013-14, where the department has not disputed the valuation of closing stock in WIP in both these years. The returned income for A.Y. 2015-16 was duly accepted under Section 143(1) of the Act. In fact, this is the first year in which valuation of closing WIP has been enhanced. The Ld. AO enhanced the WIP to 100% of sale price instead of 70% valuation regularly employed by the ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 23 - appellant. The Ld. AO while opening WIP and closing WIP has been valued on different basis for the same year and not given corresponding effect in the next year i.e. 2015-16 when it is an established principle that the opening WIP for any year is nothing but closing WIP of the previous year. Further that, no analysis has been made in different stages of production of goods by the Ld. AO which plays a pre-dominant role in determining the cost. Thus, keeping in view all these aspect, the order passed by the Ld. AO in making addition on undervaluing the closing stock is found to be not sustainable. We also note that no objection was raised by the Auditor and the same method has been followed by the assessee company consistently, which was neither disputed by the Ld. AO in the past. Nor the Ld. AO contended that the income has been computed not in accordance with the standards notified under Section (2) of Section 145 of the Act. The enhancement value of WIP merely on the basis of the statement recorded during survey of Mr. Ravi Jain that too upon wrong interpretation is not sustainable in the eye of law. The re-valuation of closing WIP is not found to be justifiable and therefore, under these facts and circumstances of the case, the impugned order of deletion of addition passed by the Ld. CIT(A) is found to be just and proper so as to warrant interference. The same is, therefore, upheld. In that view of the matter, the appeal preferred by the Revenue is found to be devoid of any merit and thus, dismissed. 22. In the result, appeal preferred by Revenue for A.Y. 2014-15 is dismissed. ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 24 - ITA No. 558/Ahd/2020 – A.Y. 2016-17 (Assessee’s Appeal) 23. The grounds of appeal raised by assessee are as under: “1. The Ld. CIT(A) has erred in law and in facts in disallowing a sum of Rs.6,62,870/- being the amount of Employees contribution to Welfare Fund paid beyond the due date under the relevant Acts. Your appellant therefore prays that the additions of Rs.6,62,870/- be deleted in the interest of justice. 2. The Ld. CIT(A) has erred in law and in facts in valuing of receipts as per 26AS and making an addition of Rs.3,40,889/-.” Your appellant prays that the income is already offered to tax in various years and additions of Rs.3,40,889/- be deleted in the interest of justice.” 24. The identical issue in Ground No.1 involved in ITA No. 558/Ahd/2020 for A.Y. 2016-17 has already been dealt with by us in ITA No. 557/Ind/2020 for A.Y. 2014-15 and in the absence of any changed circumstances the same shall apply mutatis mutandis. Hence, this ground of appeal is also dismissed. 25. Ground No.2 relates to difference in Revenue’s receipts as per books and as per 26AS of Rs.3,40,889/- is subject matter before us. 26. We have heard the rival contentions made by the respective parties and we have also perused the relevant materials available on record. 27. During the course of assessment proceeding, the Ld. AO noticed difference in receipts as per books and as per 26AS whereupon opportunities were afforded to the assessee to explain the same. The explanation rendered by the assessee was not found to be satisfactory and the addition of Rs.3,40,889/- was added back to the total income of the assessee. The case made out by the assessee that the major income was received from the Bank of Baroda and the difference in income is due to premature fixed deposit, the facts whereof was mistakenly recorded by the client in its TDS return. ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 25 - However, no documents in order to establish such claim by the appellant was furnished even before the First Appellate Authority. Before us, the Ld. Counsel appearing for the assessee submitted that the relevant documents in support of the claim of the assessee may be directed to be verified by the Ld. CIT(A). Such submission has not been controverted by the Ld. DR. Thus, having heard the Ld. Counsel appearing for the parties and having regard to the facts and circumstances of the case, we restore the issue to the file of the Ld. CIT(A) to verify the documents to be filed by the assessee in order to establish whether there is any actual difference of amount as per books qua 26AS as claimed by the appellant. While adjudicating the issue, the Ld. CIT(A) would be at liberty to grant opportunity of being heard to the assessee and to pass a reasoned order strictly in accordance with law. 28. In the result, appeal preferred by assessee for A.Y. 2016-17 is partly allowed. ITA No. 589/Ahd/2020 – A.Y. 2016-17 (Revenue’s appeal) 29. The Grounds of appeal raised by Revenue are as under: “1. “on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the disallowance of Rs.3,98,89,845/- for late delivery charges without taking note that the same is “penalty for breach of contract” and subsequent invoking of provisions of section 37(1) of the Act. 2. “on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the addition of Rs.17,36,19,104/- for revaluation of WIP without taking note that the same is an outcome of findings of survey action u/s 133A of the Act.” 30. The identical issue in Ground No.1 of ITA No. 589/Ahd/2020 for A.Y. 2016-17 has already been dealt with by us in ITA No.588/Ahd/2020 for A.Y.2014-15 and in the absence of any changed circumstances the same shall ITA Nos. 557, 558, 588 & 589/Ahd/2020 (Gujarat Infrapipes Pvt. Ltd.) - 26 - apply mutatis mutandis. Thus, First Ground of ITA No. 589/Ahd/2020 for A.Y. 2016-17 is also dismissed. 31. The identical issue in Ground No.2 of ITA No. 589/Ahd/2020 for A.Y. 2016-17 has already been dealt with by us in ITA No.588/Ahd/2020 for A.Y.2014-15 and in the absence of any changed circumstances the same shall apply mutatis mutandis. Thus, Ground No.2 of ITA No. 589/Ahd/2020 for A.Y. 2016-17 is also dismissed. 32. In the result, appeal preferred by Revenue for A.Y. 2016-17 is dismissed. 33. In the combined result, the appeal preferred by assessee for A.Y. 2014- 15 is dismissed and for A.Y. 2016-17 is partly allowed. Revenue’s appeal for both A.Ys. 2014-15 & 2016-17 are dismissed. This Order pronounced on 10/08/2023 Sd/- Sd/- (WASEEM AHMED) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 10/08/2023 S. K. SINHA True Copy आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं$धत आयकर आय ु &त / Concerned CIT 4. आयकर आय ु &त(अपील) / The CIT(A)- 5. )वभागीय ,त,न$ध, आयकर अपील य अ$धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड2 फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad
Other Referred Cases
Gujarat State Road Transport Corporation & 10 other appeals, Pr.CIT vs. Mazda Ltd., Jamna Auto Industries v. CIT, Oswal Woollen Mills Ltd., Ema India Ltd., Dynavision Ltd.
Laws Referred To
Income Tax Act, 1961
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