2019 (3) TMI 1878 - ITAT KOLKATA

Revision u/s 263 by CIT - Depreciation on moulds - higher rate of 30% OR at rate of 15% - Allowance of a deduction claimed by the assessee company towards “excise duty not recovered from the sales” being debited directly to the profit and loss account - HELD THAT:- A perusal of the draft assessment order demonstrates that the Assessing Officer has passed the order without examination of the facts, without making the requisite enquiries and without application of mind, on the issues of “excise duty recovered from sales” and also on the issue of “excess depreciation claimed on moulds”. It is also not the case of the assessee that these two issues were considered by the Assessing Officer and, that an opinion was formed on these issues by the Assessing Officer. The assessee submitted that the claims were made in accordance with law and that annual accounts etc. were filed before the Assessing Officer and that the Assessing Officer had not disturbed its claim. This claim of the assessee should have been examined by the Assessing Officer. This was not done. Filing of details such as annual accounts etc. does not lead us to a conclusion that the Assessing Officer has taken a possible view. The undisputed fact is that the Assessing Officer has not raised any queries nor enquired and consequently has not applied his mind to these two issues. The claim made by the assessee may be legally and factually correct but the same has to be examined by the Assessing Officer.

In our considered opinion, as the Assessing Officer has passed this assessment order, without enquiry and application of mind on these two issues, the order is erroneous and prejudicial to the interest of the revenue.

CIT has applied his mind to both these issues by considering, the facts and the law as well as the explanation of the assessee. He has indicated as to how the assessment order in his opinion was erroneous and prejudicial to the interest of the revenue, to the extent of these two issues. Hence this argument of the ld. Counsel for the assessee by relying on the judgement of the Hon’ble Delhi High Court in the case of D.G. Housing Projects (supra), is not applicable to the facts of this case. Hence we find no infirmity in the order of the ld. Pr. CIT, giving direction to the Assessing Officer to examine both these issues properly and adjudicate the issues afresh, after giving the assessee proper opportunity of being heard.

Assessee has placed evidences and made detailed submissions on merits on the two issue that where the subject matter of revision. In our view, to express a view on the merits of the claim of the assessee at this stage, is not proper. The facts have to be examined by the Assessing Officer. The ld. Pr. CIT has examined the explanation and facts submitted by the assessee and has come to a conclusion that the Assessing Officer has to examine the same. The Assessing Officer is directed to examine both these issues independently, without getting influenced by any of the observations of the ld. CIT on these issues afresh in his order u/s 263 of the Act and adjudicate both these issues in accordance with law. - Decided against assessee.