ACIT CIR. 6 (3) (2), MUMBAI V. KHANDELWAL LABORATORIES PVT. LTD., MUMBAI

ITA 6035/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9851 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 10-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA LD
• Assessee Lawyers: DHARMESH SHAH LD
• Section: 143(3); 115JB; 263

Judgement Text

ITA NO.6035/MUM/2016 KHANDELWAL LABORATORIES PVT.LTD ASSESSMENT YEAR: 2010-11 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.6035/MUM/2016 ( / ASSESSMENT YEAR: 2010-11) A SSISTANT COMMISSIONER OF INCOME TAX CIRCLE 6(3)(2) ROOM NO.522, 5 TH FLOOR AAYKAR BHAVAN,M.K.ROAD MUMBAI-400 020 / VS. KHANDELWAL LABORATORIES PRIVATE LIMITE D 79/78, LAL PATH CHINCHPOKLI MUMBAI-400 033 ./ ./ PAN/GIR NO. AAACK-4225-E ( ! /APPELLANT ) : ( ' ! / RESPONDENT ) REVENUE BY : N.HEMALATHA, LD. DR ASSESSEE BY : DHARMESH SHAH,LD.AR / DATE OF HEARING : 20/03/2018 / DATE OF PRONOUNCEMENT : 23 /03/2018 /ORDER PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2010-11 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-12 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-12/IT 25/DCIT 6(3)(2)/2015-16 DATED 2 ITA NO.6035/MUM/2016 KHANDELWAL LABORATORIES PVT.LTD ASSESSMENT YEAR: 2010-11 20/07/2016. THE ASSESSMENT FOR IMPUGNED AY WAS FRAM ED BY LD. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE -6(3)(2), MUMBAI [AO] U/S 143(3) READ WITH SECTION 263 OF THE INCOME TAX ACT,1961 ON 10/03/2015. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEA L BEFORE US:- 1. THE LEARNED CIT(A) HAS GROSSLY ERRED ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE TO ALLOW RELIEF TO THE ASSESSEE BY RELYING UPO N THE ORDER OF THE ITAT DATED 23.06.2016, IN THE APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT U/S. 263 OF THE ACT IN A.YS. 2009-10 & 2010-11, WHEREIN ITAT HA S CONSIDERED THE FACTS DISCUSSED BY THE AO IN THE CONSEQUENTIAL ASSESSMENT ORDER PAS SED BY THE AO U/S. 143(3) R.W.S.263 OF THE ACT, WHICH ORDER WAS NOT SUBJECT M ATTER OF APPEAL BEFORE THE ITAT. 2. THE LEARNED CIT(A) HAS GROSSLY ERRED ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE TO ALLOW RELIEF TO THE ASSESSEE BY RELYING UPO N THE ORDER OF THE ITAT DATED 23.06.2016, IN THE APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT U/S.263 OF THE ACT IN A.YS 2009-10 & 2010-11, WHEREIN THE ITAT HAS ALLOWED THE ASSESSEE NOT TO PRESS THE ISSUES RELATING TO DELAYED PAYMENT OF PF, ESI AND COMPUTATION OF BOOK PROFIT U/S. 115JB OF THE ACT AND DISMISSED THE CONTENTION OF THE ASSESSEE RELATING TO THE SAME, WHEN THE SAME WAS NOT SUBJECT MATTER OF ANY ADDITIO N IN THE ORDER PASSED BY THE CIT U/S.263 OF THE ACT, INTER-ALIA MEANING ITAT UPHELD THE FINDING OF THE CIT THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. 3. THE LEARNED CIT(A) HAS GROSSLY ERRED ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE TO ALLOW RELIEF TO THE ASSESSEE BY RELYING UPO N THE ORDER OF THE ITAT DATED 23.06.2016, IN THE APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT U/S.263 OF THE ACT IN A.YS 2009-10 & 2010-11, WHEREIN THE ITAT HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE IN THE ORDER PASSED U/S.263 OF THE ACT , WHICH, INTER-ALIA, MEANS GROUND OF APPEAL NOS.1 & 2 TAKEN BY THE ASSESSEE WAS DISPOSED OF AS DISMISSED, HENCE THE DIRECTIONS OF THE CIT IN THE ORDER PASSED U/S.263 O F THE ACT, WAS PROPER AND VALID. WITHOUT PREJUDICE TO GROUND OF APPEAL NOS. 1 TO 3, FOLLOWING GROUNDS ARE TAKEN IN ADDITION TO THE ABOVE. 4. THE LEARNED CIT(A) HAS ERRED ON FACTS AND CIRC UMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.19,42,671/- ON ACCOUNT THE STT EXPEN SES FOR DISALLOWANCE U/S.14A VIS-- VIS RULE 8D OF THE INCOME TAX ACT,1961. 5. THE LEARNED CIT (A) HAS ERRED ON FACTS AND CIRCU MSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.31,36,884/- ON ACCOUNT CLINICAL SUPP ORT EXPENSES. 2. BRIEFLY STATED THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURING OF ETHICAL PHARMACEUTICAL WAS ORIGINALLY ASSESSED U/S 143(3) ON 20/03/2012 DETERM INING THE LOSS AT RS.45.89 CRORES UNDER NORMAL PROVISIONS AND BOOK PROFIT OF RS.4.20 CRORES U/S 115JB AS AGAINST RETURNED INCOME OF RS.18.54 LA CS E-FILED BY THE 3 ITA NO.6035/MUM/2016 KHANDELWAL LABORATORIES PVT.LTD ASSESSMENT YEAR: 2010-11 ASSESSEE ON 30/09/2010. THE ASSESSEE FILED REVISED COMPUTATION DURING ASSESSMENT PROCEEDINGS DECLARING LOSS OF RS.46.31 C RORES SINCE THE BUSINESS LOSS INCURRED BY THE ASSESSEE WAS NOT SET OFF WITH THE LONG TERM CAPITAL GAINS . SUBSEQUENTLY, THE SAID ORDER WAS SUBJECTED TO REV ISIONAL JURISDICTION U/S 263 BY LD. COMMISSIONER OF INCOME TAX VIDE ORDER DATED 31/03/2014, PURSUANT TO WHICH QUANTUM ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 263 WAS COMPLETED BY LD. AO ON 10/03/2015 WHEREIN THE INCOME OF THE ASSESSEE WAS RE-DETERMINED AT RS. 48.88 LACS UNDER NORMAL PROVISIONS AND RS.1.17 CRORES U/S 115JB. UPO N FURTHER APPEAL AGAINST THE SAME, THE LD. CIT(A) HAS PROVIDED CERTA IN RELIEF TO THE ASSESSEE VIDE IMPUGNED ORDER DATED 20/07/2016, AGAINST WHICH THE REVENUE IS IN FURTHER APPEAL BEFORE US. 3. IN THE MEANWHILE, THE ASSESSEE CONTESTED THE IN VOCATION OF REVISIONAL JURISDICTION U/S 263 FOR AYS 2009-10 & 2010-11 VID E ITA NOS.2765/MUM/2014 & 2702/MUM/2014 ORDER DATED 23/0 6/2016 WHEREIN, THE TRIBUNAL HAS, INTER-ALIA, CONSIDERED THE ADDITION MADE BY LD. AO IN CONSEQUENTIAL ORDER PASSED U/S 143(3) READ WITH SECTION 263 AND ADJUDICATED THE SAME ON MERITS. 4. IN THE BACKDROP OF ABOVE STATED FACTS, IT IS NOT ED THAT LD. AO, IN THE CONSEQUENTIAL ORDER PASSED U/S 143(3) READ WITH SECTION 263 , HAS MADE CERTAIN MORE ADDITIONS / ADJUSTMENTS WHILE DETERMIN ING THE INCOME UNDER NORMAL PROVISIONS AS WELL AS U/S 115JB. IT IS FURTH ER NOTED THAT THE CONSEQUENTIAL ORDER OF LD. AO IS DATED 10/03/2015, WHICH HAS DULY BEEN 4 ITA NO.6035/MUM/2016 KHANDELWAL LABORATORIES PVT.LTD ASSESSMENT YEAR: 2010-11 CONSIDERED BY THE TRIBUNAL IN ITS SUBSEQUENT ORDER DATED 23/06/2016. THE LD. CIT(A), WHILE ADJUDICATING THE APPEAL OF THE AS SESSEE AGAINST CONSEQUENTIAL ORDER, HAS SIMPLY FOLLOWED THE DECISI ON OF THE TRIBUNAL RENDERED ON 23/06/2016. THEREFORE, WE FIND THAT A V IEW HAS ALREADY BEEN TAKEN BY THE TRIBUNAL ON MERITS AND THEREFORE, WE R EFRAIN OURSELVES FROM DELVING INTO THE SAME ANY FURTHER. 5. IN VIEW OF THE ABOVE STATED FACTS, THE LD. AO IS DIRECTED TO RE-COMPUTE THE INCOME OF THE ASSESSEE IN TERMS OF THE CITED OR DER OF THE TRIBUNAL FOR IMPUGNED AY, WHICH MAKES IMPUGNED ORDER INFRUCTUOUS. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MARCH , 2018. SD/- SD/- (C. N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23. 03.2018 SR.PS:- THIRUMALESH 5 ITA NO.6035/MUM/2016 KHANDELWAL LABORATORIES PVT.LTD ASSESSMENT YEAR: 2010-11 ! / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. $, , , , / DR, ITAT, MUMBAI 6. -. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI