M/s C. K. Trade Ex. Pvt. Ltd., Kolkata V. ITO, Wd-9(3), Kolkata, Kolkata

ITA 673/KOL/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78451 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 16-04-2014
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: MANOJ KATARUKA
• Section: 143(3); 37; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI GEORGE MATHAN, JM] ITA NO.673/KOL/2014 ASSESSMENT YEAR : 2009-10 ( APPELLANT ) (RESPONDENT) M/S.C.K.TRADE EX.PVT.LTD. -VS- I.T.O., WARD-9 (3 ) KOLKATA KOLKATA (PAN:AADCC 2385 A) FOR THE APPELLANT SHRI MANOJ KATARUKA, ADVOCATE FOR THE RESPONDENT SHRI VARINDER MEHTA, CIT(DR) DATE OF HEARING : 21.07.2014 DATE OF PRONOUNCEMENT : 21. 07.2014. ORDER PER SHRI GEORGE MATHAN, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST ORD ER OF LD. C.I.T-KOLKATA-III KOLKATA PASSED U/S 263 OF THE I.T.ACT IN NO.CIT-III /DC(HQ)-3/KOL/172/U/S.263/2013- 14/7114 DATED 25/03/2014 FOR ASSESSMENT YEAR 2006- 07.. 2. SHRI MANOJ KATURKA, ADVOCATE, REPRESENTED ON BE HALF OF THE ASSESSEE AND SHRI VARINDER MEHTA, CIT(DR) REPRESENTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL THE ASSESSEE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE ACTION OF THE LEARNED CIT IN PASSING ORDER U/S 263 OF THE IT ACT BY DIRECTING THE ASSESSING OFFICER TO FRAME THE ASSESSMENT DE NOVO IS BAD IN LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE ORDER PASSED BY THE LEARNED CIT IN EXERCISE OF POWERS U/S 263 OF THE IT ACT TO TREAT THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) AS ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF REVENUE IS INCORRECT IN LAW. 3. THAT THE ORDER OF THE LEARNED CIT U/S 263 OF THE IT ACT SETTING ASIDE THE ASSESSMENT FRAMED U/S 143(3) AND DIRECTING TO BE FRAMED DE NOV O IS BAD IN LAW. 4. THAT THE ABOVE GROUNDS OF APPEAL SHALL BE ARGUED IN DETAIL AT THE TIME OF HEARING AND THE APPELLANT CRAVES LEAVE TO SUBMIT, ADD, ALTER, M ODIFY , AMEND ANY GROUNDS OF APPEAL OR SUBMIT ANY ADDITIONAL GROUNDS OF APPEAL AT OR BE FORE THE TIME OF HEARING. ITA.NO.673/KOL/2014 M/S.C.K.TRADE EX.PVT.LTD. A.YR.2009-10 2 4. IT WAS SUBMITTED BY THE LD. AR THAT THE ORIGINA L ASSESSMENT U/S 143(3) OF THE ACT HAD BEEN COMPLETED ON 28.12.2011. IT WAS THE SU BMISSION THAT IN THE SAID ASSESSMENT ORDER THE ISSUE ON FOREIGN EXCHANGE LOSS CLAIMED HAD BEEN DISALLOWED BY THE AO. IT WAS THE SUBMISSION THAT THE AO HAD DISAL LOWED THE FLUCTUATION LOSS ON THE GROUND THAT THE LOSS WAS NOT INCURRED FOR THE PURPO SE OF BUSINESS. IT WAS THE SUBMISSION THAT THE ASSESSMENT ORDER WAS PASSED ON 28.12.2011. AGAINST THE SAID ASSESSMENT ORDER THE ASSESSEE HAD FILED AN APPEAL B EFORE CIT(A)-VIII, KOLKATA IN APPEAL NO.257/CIT(A)-VIII/KOL/11-12, WHO HAD VIDE A N ORDER DATED 15.06.2012 ALLOWED THE ASSESSEES CLAIM FOR FOREIGN EXCHANGE L OSS. IT WAS THE FURTHER SUBMISSION THAT AFTER THE ORDER OF CIT(A) DATED 15.06.2012 A S HOW CAUSE NOTICE U/S 263 OF THE ACT HAD BEEN ISSUED BY THE LD. CIT, KOLKATA-III, KOLKAT A ON 08.01.2014. IT WAS THE SUBMISSION THAT THE ASSESSEE HAS SPECIFICALLY SUBMI TTED BEFORE LD.CIT THAT THE ISSUE OF FLUCTUATION LOSS WAS THE SUBJECT MATTER OF DISALLOW ANCE IN THE ASSESSMENT AND THE SAME WAS ALSO THE SUBJECT MATTER OF AN APPEAL BEFORE CIT (A), WHO HAD VIDE HIS ORDER DATED 15.06.2012 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE . IT WAS THE SUBMISSION THAT THERE IS AN ERROR IN THE COMPUTATION OF LOSS THE SAME WAS AN ISSUE WHICH COULD BE CONSIDERED U/S 154 OF THE ACT BUT NOT U/S 263, IN SO FAR AS, A S PER THE EXPLANATION (C) TO SECTION 263(1) OF THE ACT THE MATTER OF FLUCTUATION LOSS WA S THE SUBJECT MATTER OF AN APPEAL BEFORE CIT(A) AND CIT(A) HAS ALSO ADJUDICATED ON TH E ISSUE. IT WAS THE SUBMISSION THAT CIT-III,KOLKATA DID NOT CONSIDER THE SUBMISSIO NS OF THE ASSESSEE AND HAD DIRECTED THE AO TO RE-FRAME THE ASSESSMENT DE NOVO. IT WAS T HE SUBMISSION THAT ORDER OF THE CIT-III, KOLKATA PASSED U/S 263 OF THE ACT WAS LIAB LE TO BE QUASHED. 5. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE ORD ER OF CIT-III, KOLKATA PASSED U/S 263 OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 28.12.1011 SHOWS TH AT THE AO HAD IN THE COURSE OF ASSESSMENT CONSIDERED THE ISSUE OF THE LOSS ON ACCO UNT OF FOREIGN EXCHANGE FLUCTUATION. THE AO HAS GONE TO THE EXTENT OF SAYIN G THAT THE ASSESSEE HAD SOLD THEIR STOCK AT LOWER THAN THE PREVAILING MARKET PRICE. TH E AO FURTHER PROCEEDED TO DISCUSS THE AGREEMENT BETWEEN THE ASSESSEE AND NFCL [M/S.NI SSAN FERRO CAST LTD.] AND HAD COME TO THE CONCLUSION THAT THE FLUCTUATION LOSS IT SELF WAS NOT INCURRED FOR THE PURPOSE ITA.NO.673/KOL/2014 M/S.C.K.TRADE EX.PVT.LTD. A.YR.2009-10 3 OF BUSINESS OF THE ASSESSEE AND HENCE WAS NOT ALLOW ABLE U/S 37 OF THE ACT. A PERUSAL OF THE ORDER OF CIT(A) IN PAGES 12 TO 18 OF THE ORDE R OF THE CIT(A) SHOWS THAT CIT(A) HAS GIVEN MULTIPLE REASONS TO HOLD THAT THE DISALLO WANCE OF THE FLUCTUATION LOSS WAS NOT PERMISSIBLE AND HAS DIRECTED FOR THE DELETION OF TH E SAME. A PERUSAL OF THE EXPLANATION (C) TO SECTION 263(1) OF THE ACT SHOWS THAT THE SAI D EXPLANATION IS APPLICABLE WHERE ASSESSMENT ORDER PASSED HAS BEEN THE SUBJECT MATTER OF AN APPEAL, AND THE MATTERS ON WHICH 263 HAS BEEN INVOKED HAS BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. CLEARLY THE ISSUE OF THE FLUCTUATION LOSS HAS BEEN DISCUSSE D BY CIT(A) AND DECIDED BY HIM IN HIS APPELLATE ORDER DATED 15.06.2012.CONSEQUENTLY W E ARE OF THE VIEW THAT THE ORDER PASSED BY CIT U/S 263 OF THE ACT ON THE ISSUE OF TH E FLUCTUATION LOSS IS NOT PERMISSIBLE AND CONSEQUENTLY THE SAID ORDER OF CIT-III, KOLKATA PASSED U/S 263 OF THE ACT STANDS QUASHED. IN THE CIRCUMSTANCES THE APPEAL OF THE ASS ESSEE IS ALLOWED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED ORDER PRONOUNCED IN THE OPEN COURT 21.07.2014. SD/- SD/- [P.K.BANSAL] [ GEORGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 21.07.2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. M/S. C.K.TRADE EX.PVT. LTD., 106, NARKALDANGA MAIN ROAD, KOLKATA-700054. 2 I.T.O., WARD-9(3), KOLKATA. 3 . CIT(A)-VIII, KOLKATA. 4. CIT KOLKATA-III, KOLKATA 5. CIT(A)DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA.NO.673/KOL/2014 M/S.C.K.TRADE EX.PVT.LTD. A.YR.2009-10 4