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TMI Blog2016 (3) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... to have the refund along with the interest. Therefore we deem it that the AO's order is not erroneous in so far as it is prejudicial to the revenue. Hence provisions of section 263 are not applicable and should be dropped we allow this ground of appeal of the assessee accordingly. - ITA No. 301/Kol/2015, ITA No. 684/Kol/2014, ITA No. 1027/Kol/2013 - - - Dated:- 3-2-2016 - N. V. Vasusdevan, JM And Waseem Ahmed, AM For the Appellant : Shri J P Khaitan, Sr. Adv. and Shri Bikash Chandra, Adv For the Respondent : None ORDER Per Waseem Ahmed, Accountant Member These three appeals are filed by the same assessee against orders of Commissioner of Income Tax-3, Kolkata in appeals No.CIT-3/Kol/263/2014 - 15/6030-32, CIT-III/DC (Hq)-3/Kol/243/u/s263/2013-14/7183-85-2012-13/ 8984 dated 18/19/03/2015, 26.03.2014 30.03.2013. Assessments were framed by ACIT, Range-8,/JCIT(OSD) Circle-8/DCIT, Circle-8, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') vide their orders dated 31.03.2013, 28.12.2011 and 31.12.2010 for assessment years 2009-10, 2008-09 2007-08 respectively. 2. At the time of hearing none appeared on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such excess tax paid has to be refunded together with interest under section 244A, as rightly granted by the Assessing Officer. 7. For that on the facts and in the circumstances of the case, the Commissioner of Income Tax erred in assuming jurisdiction u/s. 263 of the Act when the assessment order passed under section 143(3) of the Act was neither erroneous nor prejudicial to the interest of the revenue. 8. For that the learned Commissioner of Income Tax was not justified in holding that the assessment order passed by the Assessing Officer under section 143(3) dated 31.3.2013 is set aside for fresh assessment and verification. 4. The facts in brief are that assessee is a limited Company and engaged in various businesses such as manufacture and sale of tobacco products, consumer goods, hotel business etc. During the assessment proceeding, AO passed order u/s 143(3) of the Act after making certain additions to the total income of assessee. However, Ld. CIT found that the order of AO is erroneous in so far as it is prejudicial to the interest of Revenue on account of the following reasons: 1) The assessee has claimed the double deduction of excise duty for an amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has preferred the present appeal before us. 6. We have heard Ld. AR and perused the materials available on record. Ld. AR submitted paper book which containing pages 1 to 208 and submitted that deduction of ₹ 868,67,87,534/- in respect of excise duty on closing stock was claimed in AY 2009-10 and the same was added back in the computation of income for the following assessment year i.e. AY 2010-11. Similarly, a deduction of ₹ 372,89,01,394/- was claimed in the preceding assessment year i.e. AY 2008-09 and added back in the computation in AY 2009-10 The computation of income statements for assessment years 2008-09, 2009-10 2010-11 are placed on pages 1 to 6 of the paper book. The tax rate for both the years was 33.99%. The ld. AR drew our attention on page 28 of the paper book where auditor certificate is placed certifying that the opening and closing stock does not include the excise duty. Our attention was also drawn on page 7 8 of the paper book where the notice was issued by the assessing officer regarding seeking the clarification about the excise element in the closing stock of the company. The reply for the same is placed on page 15 of the paper book. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the above reproduced section 263(1) can be summarized in the following points:-: 1) The commissioner may call for an examine the record of any proceeding under the Act; 2) If he considers that the order passed by the AO is (i) Erroneous; and (ii) Is prejudicial to the interest of Revenue; 3) He has to give an opportunity of hearing in this respect to the assessee; and 4) He has to make or cause to make such enquiry as he deems necessary; 5) He may pass such order thereon as the circumstances of the case justify including, (i) An order enhancing or, (ii) Modifying the assessment or (iii) Cancelling the assessment and directing a fresh assessment. 6.3 Now in the light of above words, we have to examine as to whether the order of the ld. CIT is a valid order in the light of the above stated points/ provisions of section 263 of the Act. 6.4 Regarding the issue of excise duty we find from the case in hand, that the issue was duly examined by the AO evident as under:- (a) Questionnaire issued u/s 142(1) dt. 10.01.2013, the relevant portion is extracted below:- 6. As per the computation of Income (Revised) (Statement No. 14), the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, filed the details as per the letter of the co. dated 06/3/2013 and the same was placed on record. The case was partly heard and discussed and adjourned to 12.03.2013 at 4.30 p.m. Sd/- KM Sd-Illegible Sd/- illegible Sd/- Illegible 6/3/13 6/3/13 22/3/13 ARs, Shri S. Seksaria, Shri G.Goel and Ms K. Mukherjee, appeared and in course of hearing, the details filed in respect of claim excise duty on closing stock u/s 43B was discussed and explained by them for further hearing and discussion, the case is adjourned to 25/3/2013 at 4.30 p.m. Sd/- KM Sd-Illegible Sd/- illegible Sd/- Illegible 22/3/13 22/3/13 From a perusal of the order u/s. 263 of the Act, we find that the Ld. CIT has exercised jurisdiction u/s. 263 of the Act on the ground that the AO did not conduct any enquiry with regard to excise duty in closing stock vis- -vis Sec. 43B of the Act and grant of refund with interest u/s. 244A of the Act on refund of dividend distribution tax. This is clear if we read para-5 of the Ld. CIT's order. The facts are set out in the earlier para-6 of this order, however shows that the AO made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in Exide Industries Ltd. vs. DCIT [134 ITD 351 (2012) has held that there is no case of double deduction and the claim for deduction is valid in law. In the present case the facts are that a deduction of ₹ 868,67,87,534/- in respect of excise duty on closing stock was claimed in AY 2009-10 and the same was added back in the computation of income for the following assessment year i.e. AY 2010-11. The tax rate for both the years was 33.99%. Similarly, a deduction of ₹ 372,89,01,394/- was claimed in the earlier assessment year i.e. AY 2008- 09 and added back in the computation in AY 2009-10. The deduction was claimed and allowed in the assessment in line with the Hon'ble Supreme Court's decision in the case of Berger paints India Ltd. (supra) and as per the said decision of Hon'ble Supreme Court, deduction u/s. 43B is to be fully allowed for excise duty and other duties on payment basis inclusive of the amount included in closing stock. Here, we give below an extract of the said decision:- The entire amount of excise duty/customs duty paid by the assessee in a particular accounting year is allowable u/s. 43B of the Income Tax Act, 1961, as a deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, distributed or paid by such company by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2003, whether out of current or accumulated profits shall be charged to additional income-tax (hereinafter referred to as tax on distributed profits) . Thus where any refund arises on account of excess payment of DDT, it is a refund becoming due to the assessee under the Act and interest under Section 244A is applicable on the same. Clause (a) of Section 244A(1) deals with refunds that arise on account of excess payment of advance tax, TDS/TCS. Clause (b) of section 244A(1) applies to refunds that arise in any other case . As such, Clause (b) is of wide import and any payment which does not fall in clause (a), are covered under clause (b) - like refund of excess tax payment made against demand raised, refund of excess self assessment tax paid, refund of excess DDT paid, refund of TDS deposited, refund of interest levied u/s. 201(1A), refund of penalty, etc. Refund of excess DDT paid falls clearly under clause (b) i.e. in any other case and there is no reasons to think otherwise. We also find the support from CBDT circular clarifying its inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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