9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 870 - AT - Income TaxDenial of depreciation - Capital work in progress held as accommodation entry - AO has mainly held the party as non-verifiable in view of the reason that notice u/s 133(6) issued remained unserved and the assessee also failed to produce the said parties for verification of the claims of work carried out by it - HELD THAT - The additional evidence filed by the assessee is crucial and goes to the root of the matter. The learned Counsel has submitted that the party is alive on the address provided on the website of the Ministry of corporate affairs, therefore, it is imperative to verify from the records of the said party whether any work was actually carried out. Therefore, we feel it appropriate to restore this issue back to the file of the ld CIT(A) for deciding on the merit of the addition. If required, he may call for a remand report from the assessing officer on the said additional evidence. The ld CIT(A) or the AO in remand proceeding are it liberty to carry out the inquiries as deemed fit for verification of the work done by the said party. The ground No. 2 of appeal of the assessee is accordingly allowed for statistical purposes. Validity of assessment u/s 153C - Assessee submitted that on the basis of information received from Shri Pravin Aggarwal, reassessment could have been initiated only u/s 153C of the Act and not u/s 148 - HELD THAT - The Hon ble supreme court in the case of ITO vs Vikram Sujitkumar Bhatia 2023 (4) TMI 296 - SUPREME COURT held the amendment brought to section 153C of the Act by way of finance Act, 2015 as retrospective. Since, the information received from search at the Shri Pravin Aggarwal was based on his statement and other material, which were pertaining to Shri Pravin Aggarwal only and therefore, proceedings u/s 153C of the Act could not have been initiated/invoked in the hands of the assessee on said material. The challenge of the Ld. Counsel of the assessee for invalidating the present proceedings u/s 153C on this reason is accordingly rejected. In our opinion on such information from Pravin Aggarwal only valid recourse was to issue notice u/s 148 of the Act. The decisions relied upon by the learned counsel are distinguishable as same are on the facts of the specific case where any asset belonging to an assessee or material pertaining to an assessee is found during the search of the third party. In absence of providing copy of the approval for reassessment granted by the appropriate authority u/s 151 of the Act, notice u/s 148 of the Act is invalid, and thus assessment was no longer abated and hence no addition could have been made otherwise than the aid of the incriminating material - In our opinion, the matter cannot be deferred for an indefinite period before us. This issue of challenge of validity of notice u/s 148 of the Act has been raised for the first time before us and not raised before the lower authorities. We note that in view of the additional evidence furnished by the assessee on the issue of the merit, we have restored the matter back to the file of the ld. CIT(A), therefore in the interest of the substantial justice, we feel it appropriate to restore this issue, which is a matter of determination of fact, to the file of the Ld. CIT(A) for adjudication. He may call for a report from the assessing officer and verify copy of the approval granted under section 151 of the Act. If such an approval is found to be in existence, then he shall provide a copy of the same to the assessee. If no such approval for issue of notice under section 148 of the Act is found, then Ld. CIT(A) may decide validity of the assessment proceedings under section 153C of the Act in accordance with law.
Issues Involved:
1. Validity of Notice under Section 153C of the Income Tax Act. 2. Disallowance of Capital Work in Progress. 3. Treatment of Subsidy under Technology Upgradation Fund Scheme. 4. Taxability of Dividend Income. 5. Disallowance of Additional Spill Over Depreciation. 6. Cross Appeals for Assessment Years 2009-10 and 2010-11. Summary: 1. Validity of Notice under Section 153C: The assessee challenged the validity of the notice under Section 153C of the Income Tax Act, claiming it was invalid. The CIT(A) upheld the validity of the assessment proceedings under Section 153C. However, it was noted that the assessment was unabated, and thus the Assessing Officer could not disturb completed proceedings without incriminating material. The Tribunal restored the issue back to the CIT(A) for verification of the approval under Section 151, which was not provided to the assessee, and to decide the validity of the assessment proceedings under Section 153C accordingly. 2. Disallowance of Capital Work in Progress: The Assessing Officer disallowed the assessee's claim of Rs. 10,53,83,193/- as capital work in progress, treating it as a bogus expenditure. The CIT(A) upheld this disallowance. The Tribunal found that the Assessing Officer's conclusion was based on unserved notices and the statement of Mr. Pravin Aggarwal, without proper verification. The Tribunal restored the issue to the CIT(A) for fresh adjudication, allowing the assessee to provide additional evidence. 3. Treatment of Subsidy under Technology Upgradation Fund Scheme: The CIT(A) upheld the Assessing Officer's decision to treat the subsidy of Rs. 8,12,15,141/- as capital in nature and chargeable to tax. This issue was not pressed by the assessee before the Tribunal and was dismissed as infructuous. 4. Taxability of Dividend Income: The CIT(A) upheld the Assessing Officer's action of treating Rs. 1,16,24,021/- received as dividend income from M/s Alexandria Carbon Black Limited, Egypt, as taxable in India. This issue was also not pressed by the assessee before the Tribunal and was dismissed as infructuous. 5. Disallowance of Additional Spill Over Depreciation: The CIT(A) directed the Assessing Officer to withdraw the disallowance of additional spill over depreciation allowance of Rs. 24,35,82,219/-. The Tribunal restored this issue back to the CIT(A) to decide afresh, considering the factual finding of whether the assessment was abated or not. 6. Cross Appeals for Assessment Years 2009-10 and 2010-11: Both parties agreed that the grounds raised in the cross appeals for assessment years 2009-10 and 2010-11 were identical or consequential to assessment year 2008-09. The Tribunal decided these appeals mutatis mutandis. Conclusion: The appeals of the Revenue were dismissed, while the appeals of the assessee were partly allowed for statistical purposes. The Tribunal directed the CIT(A) to re-examine certain issues and provide a copy of the approval under Section 151 to the assessee.
|
