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TMI Blog2018 (3) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... warding charges in the sum of ₹ 6,33,344/- is in order. The assessee had not made any double deduction claim towards freight and forwarding charges as wrongly suspected by the CIT in his section 263 order and by the ld AO in the giving effect proceedings. The ld DR prayed for setting aside of this appeal to the file of CIT-A for adjudication of the issue on merits. We do not deem it fit and necessary as the facts and the treatment of gross sales before freight and forwarding charges credited in the manufacturing account and the statement of sales submitted before the lower authorities, are staring on us. Absolutely there is no scope for taking a different view in the impugned issue. Assessee had pleaded the same before the CIT in section 263 proceedings ; before the AO and before the CIT-A by way of written submissions together with evidences in support of its submissions, which has not appreciated by the authorities below. Accordingly, the grounds raised by the assessee are allowed. - I.T.A No. 77/Kol/2016 - - - Dated:- 7-3-2018 - Shri Aby. T. Varkey, JM And Shri M.Balaganesh, AM For the Appellant : Shri V.N. Purohit, FCA For the Respondent : Shri Arindam Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not claimed by the assessee twice. The assessee has neither concealed any turnover nor has claimed any double deduction of the same expenditure with a view to reducing the net profit. 4. The ld CIT passed an order u/s 263 of the Act on 19.3.2012 by observing as under:- 5. The arguments put forward by the Ld. AR have carefully been examined in the light of the assessee s audited accounts, details of sale and consignment notes raised on its clients. It is pertinent to mention that freight and forwarding charge is an indirect expenditure in the hands of the assessee firm which is required to be claimed in the profit and loss account. Only the direct expenses attributable to the manufacturing process are debitable to the manufacturing account. In consonance with this usual practice the turnover credited to the profit and loss account should have only included the direct expenditure components. But surprisingly the assessee firm claims that the sale credited to the manufacturing account for the year included freight and forwarding charges which is quite anomalous and hence not reliable/tenable. The ld. AR has argued that this accounting system has been followed by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in double deduction of the same expenditure and consequent under assessment income by a sum of ₹ 6,33,344/-. In this regard, I place reliance on the following judicial pronouncements: a) M/s Ashoke Leyland Ltd. vs. CIT reported in 260 ITR 599 (Mad) b) M/s Jai Bharath Tanners vs. CIT reported in 264 ITR 673(Mad.) c) M/s Malabar Industrial Co. Ltd. vs. CIT reported in 243 ITR 83(S C) The Hon'ble Supreme Court and the Madras High Court have held in the above cases that the AO s failure to conduct enquiry on the issues depicted in the assessee s final accounts would render an assessment order erroneous and prejudicial to the interest of the revenue. Exactly, the same has happened in the instant case also. Therefore, I have no hesitation is setting aside the assessment order dated 29.12.2009 u/s 263 of the I.T. Act with a direction to the AO to frame the assessment order de novo in the light of the observations made above. Needless to mention that in the course of the reassessment proceeding the AO shall grant a reasonable opportunity of being heard to the assessee firm. 5. The assessee did not prefer any appeal before this tribunal against the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven though the appeal was filed against the order of lower authority. 2. For that on the facts and circumstances of the case as well as in law to reject and dismiss the appeal when there is specific provisions in the Income Tax Act, 1961 empowering the Ld. CIT(A) to pass such order, even when the Ld. CIT(A) discussed in details the arguments of the appellant and not contradicted such adjustments in the appeal order. 3. For that on the facts and circumstances of the case, the appellant prays before the Hon ble ITAT to delete the unjustified addition of ₹ 6,33,344/- on account of freight and forwarding charges. 4. The appellant craves leave to add to modify the grounds of appeal before or at the time of hearing of the appeal. 8. We have heard the rival submissions. At the outset, we find that the main observations of the ld CIT in his order u/s 263 of the Act are as under:- Therefore, I have no hesitation in setting aside the assessment order dated 29.12.2009 u/s 263 of the I.T.Act with a direction to the AO to frame the assessment order denovo in the light of the observations made above. Needless to mention that in the course of the reassessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fresh assessment to be made the entire assessment is before the officer. He is within his powers to consider all claims even the one not taken up earlier. The entire matter is afresh before the assessing authority and all relevant aspects should be considered by him while making the assessment afresh. The position will be different if the assessing authority has been directed to make only an assessment following some directions issued by the Commissioner. That the assessee was given an opportunity to place before the ITO all materials regarding the question relating to taxation of capital gains indicated in the order does not by itself restrict the power of the assessing authority while making a fresh assessment. The entire assessment had been cancelled and the direction was to make a fresh assessment. The CIT(A) was, therefore, right in observing that the assessee is legitimately entitled to claim the deduction. No error has, therefore, been committed by the Tribunal in upholding the order of the Commissioner (A). 8.1. On merits, we find that the freight and forwarding charges of ₹ 6,33,344/- is to be paid by the assessee which was paid by the customers on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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