M/s Simplex Engineering & Foundry Works Pvt. Ltd., New Delhi V. DCIT (LTU), New Delhi

ITA 6270/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7263 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Assessee Lawyers: SH M P RASTOGI
• Keywords: Opportunity of being heard; Revised return; Set aside
• Section: 143(3); 40(a)(ia); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER A ND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.6270/DEL./2016, A.Y. 2012-13 M/S SIMPLEX ENGINEERING & VS. DCIT, FOUNDRY WORKS PVT. LTD. CIRCLE, I, LTU, 1503, HEMKUNT TOWER, 98, NEHRU PLACE, NEW DELHI NEW DELHI-110019 (APPELLANT) (RESPONDEN T) ASSESSEE BY : SH. SH. M.P.RASTOGI, ADV. REVENUE BY : SHRI SARAS KUMAR, SR. DR DATE OF HEARING : 20.01.2020 DATE OF ORDER : 31.01.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, M/S. SIMPLEX ENGINEERING & FOUND RY WORKS PVT. LTD., NEW DELHI (HEREINAFTER REFERRED TO AS 'THE ASSESSEE) BY FILING THE AFORESAID APPEAL, SOUGHT T O SET ASIDE THE IMPUGNED ORDER DATED 01/09/2016 PASSED BY LD. COM MISSIONER OF INCOME TAX(APPEALS)-22, NEW DELHI QUA THE ASSESSME NT YEAR 2012-13 ON THE GROUNDS INTER ALIA THAT: 1) THAT THE DISALLOWANCE OF RS.48,95,000/- BEING THE AMOUNT OF INTEREST ON EXPORT PACKING CREDIT ITA NO. 6270/D EL./2016 2 LOAN U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (THE ACT), WRONGLY MENTIONED BY THE AUDITORS AS MACHINERY REPAIR CHARGES BUT LATER ON CORRECTED BY WAY OF CERTIFICATE, AS SUSTAINED BY THE CIT (APPEAL S), IS ARBITRARY, UNJUST AND BAD IN LAW. 2) THAT THE CIT (APPEALS) HAS CO-TERMINUS POWER AS THAT OF THE ASSESSING OFFICER AND HENCE THE DISALLOWANCE BY CIT (APPEALS) OF RS.48,95,000/- CLAIMED AS INTEREST ON EXPORT PACKING CREDIT LOAN IN APPEAL INSTEAD OF MACHINERY REPAIR MENTIONED BY THE AUDITORS IN THEIR REPORT BY MAKING OBSERVATION THAT ANY MISTAKE IN THE AUDITED ACCOUNTS AND THE RETURN FILED IS TO BE RECTIFIED BY FILING A REVISED AUDIT REPORT AND REVISED RETURN IS ARBITRARY, UNJUST AND BAD IN LAW. 3) THAT THE CIT (APPEALS) OUGHT TO HAVE EXAMINED THE ALLOWABILITY OF CLAIM OF RS.48,95,000/- BEING THE INTEREST PAID ON EXPORT PACKING CREDIT LOAN IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND ACCORDINGLY THE DISALLOWANCE THEREOF ON THE GROUND THAT AUDIT REPORT AND ANNUAL ACCOUNTS ARE THE BASI S FOR ASSESSMENT AND MERE SUBMISSION OF THE APPELLANT DURING THE COURSE OF APPEAL PROCEEDINGS, THAT THE AUDITORS COMMITTED MISTAKE, CANNOT BE ACCEPTED WITHOUT A RE-AUDIT OF THE BOOKS OF ACCOUNTS, IS ARBITRARY, UNJUST AND BAD IN LAW. 4) THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME O F HEARING. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY IS INTO MANUFACTURING OF EQUIPMENT AND MACHINERY ETC. ON ORDER BASIS FOR VARIOUS INDUSTRIES LIKE STEEL, POWER, CEMENT, HEAVY ENGINEE RING AND PETROLEUM. THE ASSESSEE COMPANY ALSO WORKED ON THE TURNED KEY ITA NO. 6270/D EL./2016 3 PROJECT FOR STEEL PLANTS. THE ASSESSING OFFICER MAD E AN ADDITION OF RS. 48,95,000/- BY WAY OF MAKING DISALLOWANCE U/S 4 0 (A)(IA). ON THE GROUND THAT THE ASSESSEE HAS PAID AN AMOUNT OF RS. 48.95 LAKH TOWARDS THE MACHINERY REPAIRING WITHOUT DEDUCTING A ND PAYING TAX ON THESE AMOUNT AND THEREBY FRAMED THE ASSESSMENT U /S 143(3) OF THE ACT. 3. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WH O HAS PARTLY ALLOWED THE APPEAL. FEELING AGGRIEVED THE AS SESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE P RESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. AT THE VERY OUTSET, LD. AR FOR THE ASSESSEE CONT ENDED THAT DURING THE APPELLATE PROCEEDINGS FOR LD. CIT(A) IT WAS SUBMITTED THAT THERE WAS ERROR IN THE AUDITED ACCOUNTS AND TH IS AMOUNT WAS NOT MACHINERY REPAIRING CHARGES RATHER IT WAS CLAIM ED TO BE INTEREST ON EXPORT PACKING CREDIT LOAN AND HAS FILED THE AUD ITORS CERTIFICATE DATED 22.06.2016 TO SUPPORT ITS CONTENTION. 6. HOWEVER, LD. CIT(A) ACCEPTED THE CONTENTIONS RA ISED BY THE ASSESSEE IN PRINCIPLE BUT THROWN THE CERTIFICATE IS SUED BY THE AUDITORS INTO THE DUSTBIN ON THE GROUND THAT IT PUT S A QUESTION MARK ITA NO. 6270/D EL./2016 4 ON THE SANCTITY OF THE AUDIT REPORT. SO THE CIT(A) DECLINED TO ACCEPT THE AUDITOR CERTIFICATE IN ADDITIONAL EVIDEN CE. SINCE, PRIMA FACIE THERE IS A MISTAKE APPARENT ON RECORD IN THE AUDITED ACCOUNTS WHICH HAVE BEEN RECTIFIED BY ISSUING CERTIFICATE BY THE AUDITOR DATED 22.06.2016, THE SAME NEEDS TO BE CONSIDERED BY THE AO TO DECIDE THE ISSUE IN CONTROVERSY IN ACCORDANCE WITH LAW. THE LD. CIT(A) WAS REQUIRED TO DECIDE THE MATTER AFTER CALL ING THE REMAND REPORT FROM THE AO QUA THE CERTIFICATE DATED 22.06 .2016 ISSUED BY THE AUDITOR. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT, IN THE INTEREST OF JUSTICE, MATTER IS REQUIR ED TO BE DECIDED AFRESH BY THE AO BY PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. CONSEQUENTLY, APPEAL FILED BY THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST JANUARY, 2020. SD/- SD/- (B.R.R.KUMAR) (K ULDIP SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER D ATED : 31/01/2020 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-22, NEW DELHI. 5. CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI ITA NO. 6270/D EL./2016 5 DATE OF DICTATION 29.01.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER