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TMI Blog2020 (8) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... vision of Jay Precision Products (India) Pvt. Ltd. for the period 01.01.2014 to. 31.03.2014. The expenses referred in the impugned order were incurred by the pharma division of Jay Precision Products (India) Pvt. Ltd. so acquired by the assessee pursuant to the order of the Hon ble High Court and the sale of pharma division of Jay Precision Products (India) Pvt. Ltd. for the period 01.01.2014 to 31.03.2014 were also transferred to the assessee-company due to the effective demerger, the amount reported in the tax audit report (Form 3CD) and Form 3CEB are the gross amount of the said purchases including duties, taxes and freight. All the above details were filed by the assessee before the AO during the course of assessment proceedings. In the case of Moil India Limited [ 2017 (5) TMI 258 - BOMBAY HIGH COURT] it is held that the Assessing Officer is not expected to raise more queries if he was satisfied about admissibility of claim on the basis of materials and details supplied and therefore, the order is not erroneous or prejudicial to the Revenue. In view of the above factual matrix and position of law, we cancel the order u/s 263 passed by the Pr. CIT. In the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was placed at ₹ 10,68,26,606/- by the assessee at the assessment stage vis-a-vis ₹ 6,93,11,793/- debited to the profit and loss account and shown payable to M/s Jay Precision Products (India) Limited ; liability of ₹ 142,75,306/- on account of labour charges and ₹ 117,49,539/- on account of electricity and fuel charges of pharma division towards M/s Jay Precision Products (India) Limited, when the same after its demerger had already been taken over by the assessee-company w.e.f. 01.01.2014 and certain transactions of purchases made from and to M/s Jay Precision Products (India) Limited including making of reference of specified domestic transactions to TPO. Though the assessee had replied to the show cause notice, the Pr. CIT was not convinced with the same and held that (i) the detail referred by the assessee which were filed at the assessment stage merely stated that job work charges of ₹ 10,68,26,606/- was payable to M/s Jay Precision Products (India) Limited which was reduced by ₹ 3,75,14,813/- being job work income from M/s Jay Precision Products (India) Limited due to scheme of demerger, there is no explanation as to why the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the books of Jay Precision Products (India) Pvt. Ltd. for the period 01.01.2014 to 31.03.2014, (xi) Corresponding sales accounts in the books of the appellant duly incorporating the sales of Jay Precision Products (India) Pvt. Ltd. for the period 01.01.2014 to 31.03.2014. The Ld. counsel has certified that the above documents were filed before the AO during the course of assessment proceedings. 4.1 Relying on the above documents filed before the AO, the Ld. counsel submits that during the year, the job work charges payable to pharma division of Jay Precision Products (India) Limited were ₹ 10,68,26,606/-. This included ₹ 6,93,11,793/- for the period from 01.04.2013 to 31.12.2013 and ₹ 3,75,14,813/- for the period from 01.01.2014 to 31.03.2014. It is further explained that upon merger of the pharma division, the sales shown by them of ₹ 3,75,14,813/- to the assessee were therefore, adjusted and cancelled against expenses of same account debited to the P L account; accordingly the net amount was claimed at ₹ 6,93,11,793/- and reported in the tax audit report and Form 3CEB. The Ld. counsel further submits that the labour/processing charges an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after affording reasonable opportunity of being heard to the assessee before finalizing the assessment order. Thus it is stated that no prejudice is caused to the assessee. 6. We have heard the rival submissions and perused the relevant material on record. The reasons for our decision are given below. We find that the order was passed by the Hon ble Bombay High Court for demerger on 14.11.2014 and appointed date was fixed as 01.01.2014. Accordingly, the income and expenses of pharma division of Jay Precision Products (India) Pvt. Ltd. for the period 01.01.2014 to 31.03.2014 was transferred to the assessee-company. From examination of the documents filed by the assessee before the AO during the course of assessment proceedings, we find that (i) during the year the job work charges payable to pharma division of Jay Precision Products (India) Pvt. Ltd. were ₹ 10,68,26,606/- and it included ₹ 6,93,11,793/- for the period 01.04.2013 to 31.12.2013 and ₹ 3,75,14,813/- for the period 01.01.2014 to 31.03.2014, (ii) upon merger of the pharma division of Jay Precision Products (India) Pvt. Ltd., the sales shown by them of ₹ 3,75,14,813/- to the assessee wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the order is not erroneous or prejudicial to the Revenue. In view of the above factual matrix and position of law, we cancel the order u/s 263 passed by the Pr. CIT. 7. However, before we part with the matter, we must deal with one procedural issue as well. While hearing of these appeals was concluded on 03.01.2020, this order thereon is being pronounced today, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that rule 34(5) of the Income Tax Appellate Tribunal Rules 1963, which deals with pronouncement of orders. Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon'ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid-19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid-19. The epidemic sit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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