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TMI Blog2020 (11) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... d material cited by the assessee to demonstrate that its claim of foreign exchange premium was allowed by the AO after verification of the relevant materials/details as elaborated above - we consider that in the present case it is very clear that the order passed by the Assessing Officer was neither erroneous or prejudicial. - Decided in favour of assessee. - ITA No. 1283/Ahd/2018 (Assessment Year 2013-14) - - - Dated:- 7-10-2020 - Shri Rajpal Yadav, Vice President And Shri Amarjit Singh, Accountant Member Revenue by: Shri O.P. Sharma, CIT-D.R. Assessee by: Shri Asseem Thakkar, A.R. ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- This assessee s appeal for A.Y. 2013-14, arises from order of Pr. CIT-2, Ahmedabad dated 28-03-2018, in proceedings under section 263 of the Income Tax Act, 1961; in short the Act . 2. The fact in brief is that return of income declaring loss of Rs. -7,75,561/- was filed on 24th Nov, 2014. The scrutiny assessment u/s. 143(3) of the Act finalized on 22nd March, 2016 and total income was assessed at ₹ 6,97,550/- . Subsequently, the ld. Pr. CIT-2, Ahmedabad has issued notice u/s. 263 of the Act on 23rd March , 2018 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable. The notice dated 23.3.2018 requiring compliance on 27.3.2018 was in fact served on the assessee only on 24.3.2018 at 3.50 PM i.e. which is Saturday. 25th being Sunday and Ramnavami was a closed holiday. Thus the assessee had been given hardly one day for complying with the notice u/s. 263. It is therefore submitted that adequate time has not been granted to the assessee company for making a effective representation and we reserve the right for further representation. The observation made in the notice under reply to the effect that the A O had allowed the said claim without application of mind and without making any proper and due enquiries and verification in this regard is not justifiable. The AO had passed the assessment order u/s. 143(3) dated 22.3.2016 after making proper enquiries and due verification of the books of account and relevant records. As mentioned earlier, the assessee had claimed expenditure for a sum of ₹ 98,89,746/- under the head fonvard exchange premium which is included in the major heading of Other expenses . The AO has issued a detailed notice u/s. 142(1) dated 14.8.2015. At .Sr No. 35 of the said questionnaire the AO had specifically ask ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 15.00 crores which was subsequently enhanced to ₹ 18.00 crores. From the limit so sanctioned you enjoy credit facilities for purchase of USS at the predefined rate. This loan has to be repaid in US$ terms after a specified period. To not be burdened with the foreign exchange fluctuations the premium is charged by the bank so .that the repayment of US$ is at the predetermined rate. The facilities in question had been obtained in the previous year relevant to A.Y.2012-13. Copy of the sanction letter for the earlier year is placed on pg.42 to 53 of the PB where the limit has been enhanced has been placed on pg.54 to 63 of the PB. In the previous year relevant to A.Y.2012-13 complete verification of the facilities as enjoyed by us had been 'undertaken then. Copy of the letter filed on 23.01.2015 is enclosed for your kind reference. It was after examination of the same that the expenses have come to be accepted in A. Y. 2012-13. Copy of the audited account for the previous year relevant to A.Y.2012-13 is enclosed from where the claim of foreign exchange premium can be verified. Attention is invited to pg.25 of the PB foreign exchange premium has been included in the he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the order should be considered as erroneous should be viewed in the light of the inquiries having already been conducted in the earlier years. The assessee company relies on the following judicial pronouncements in support of its contention. 9. In view of the above facts and circumstances it can be observed that the nature, of expenses have already been inquired into in A.Y.2012-13. Similar expenditure had been incurred in the previous year relevant to A.Y.2013-24. Detailed inquiries had been conducted in to the nature of expenditure in the previous year relevant to A.Y.2012-13 and thereafter assessment has came to be competed u/s 143(3) of the Act. This fact is also cross verified from the copy of letter furnished during the course of assessment proceedings as well as audited accounts for A.Y.2012-13. Since there was no change in the nature of expenditure incurred in the previous year relevant to A. Y. 2013-14 as compared, to A.Y.2012-13 the same came to be accepted. This by itself does not lead to the formation of opinion that the assessment order passed is erroneous. 3. The Assessee has relied upon following case laws: 1. Aryan Arcade v CIT (2017) 250 ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Assessing Officer in the questionnaire issued u/s. 142(1) of the Act on 14th August, 2015 at serial no. 35 has specifically asked the complete breakup and detail of other expenses which also included expenses pertaining to foreign exchange premium. The ld. counsel has also referred copies of letter of sanction of credit facility issued by the Union Bank of India vide letter dated 27th Feb, 2012 and 19th December, 2012 and also referred copies of Profit and Loss Account for the year ended on 31st March, 2012 wherein detail of such expenses were provided at note no. 27 to the P L Account. On the other hand, ld. Departmental Representative has supported the order of lower authorities. 4. We have heard both the sides and perused the material on record. The case of the assessee was subject to scrutiny assessment and total income was assessed at ₹ 6,97,550/- on 22nd March, 2016. Subsequently, the ld. Pr. CIT has passed order u/s. 263 of the Act on 28th March, 2018 holding that the said assessment order u/s. 143(3) was erroneous and prejudicial to the interest of revenue as the Assessing Officer has allowed the claim of expenditure pertaining to foreign exchange premium amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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