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TMI Blog2021 (2) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... s quashed. Accordingly, the appeal of the assessee is allowed - Decided in favour of assessee. - ITA Nos. 775/Ahd/2016 and 1000/Ahd/2018 - - - Dated:- 7-1-2021 - Mahavir Prasad, Member (J) And Amarjit Singh, Member (A) For the Appellant : Arti N. Shah, A.R. For the Respondents : Virendra Ojha, CIT-D.R. and L.P. Jain, Sr. D.R. ORDER Amarjit Singh, Member (A) Vide ITA No. 775/Ahd/2016 the instant appeal filed by assessee for A.Y. 2011-12, arises from order of the Pr. CIT(Central), Ahmedabad dated 26-02-2016, in proceedings under section 263 of the Income Tax Act, 1961; in short the Act and the other appeal vide ITA No. 1000/Ahd/2018 too filed by assessee for A.Y. 2011-12 arises from order of the CIT(A)-11, Ahmedabad dated 20-03-218 in proceeding u/s. 143(3) r.w.s. 263 the Income Tax Act, 1961; in short the Act 2. These two appeals of the assessee are adjudicated together as similar issue and identical facts are involved in these appeals. ITA No. 775/Ahd/2016 3. The solitary ground of appeal of the assessee is that ld. Pr. CIT Central Ahmedabad has erred in law and on facts of the case by invoking provisions of section 263 of the Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o correct each every type of mistake committed by A.O. It will attract when the order passed by A.O. is erroneous and which resulted in loss to revenue. In the instant case the issue taken up by CIT either enquired or adjudicated by A.O. The order passed by is proper and well reasoned. Action inflated U/s. 263 is unwarranted and needs to be dropped. The Pr. CIT Central has not agreed with the reply of the assessee after referring the audit report at para no. 4(f)(i) wherein it was mentioned that amount receivable from Mukut Pipes Ltd. was ₹ 6,94,51,399/-, therefore, decree amount was not doubtful. The Pr. CIT has also rejected the submission of the assessee that Assessing Officer has already considered the issue while framing the assessment u/s. 143(3) of the Act. The Pr. CIT was of the view that the Assessing Officer had not conducted proper and detailed inquiry and Assessing Officer had overlooked the observation made by the Auditor in the audit report para 4(f)(i) wherein it was specifically mentioned that a sum of ₹ 6,94,51,399/- was considered as recoverable by the management of the company from Mukut Pipes Ltd. In the light of the above facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A). The ld. counsel has submitted that during the course of assessment, the Assessing Officer has called specific details of the amount due from Mukut Pipes Ltd. and also called the details about the decree order of the city civil court in favour of the company. The ld. counsel referred page no. 71 and 73 of the paper book wherein the Assessing Officer has specifically made enquiries from the Assessing Officer about the aforesaid issues. The ld. counsel has also referred pages no. 57 58 of the paper book pertaining to the details submitted by the assessee in respect of amount of ₹ 6,94,51,399/- due from Mukut Pipes Ltd. and the decree order passed by the City Civil Court in favour of the assessee. The ld. CIT(A) counsel has also placed reliance on the judicial pronouncements, copies of which placed in the paper book. On the other hand, the ld. Departmental Representative has submitted that there is no detail about the enquiries made by the Assessing Officer. It is also contended that the Assessing Officer has not drawn conclusion on the inquires raised on the issue of accrued interest on decree amount. 9. Heard both the sides and perused the material on record. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph (f)(i) the auditors have mentioned that an amount of ₹ 6,94,51,399/- due from Mukat Pipes Ltd. considered as recoverable by the management and an amount of ₹ 2,67,66,831/- due from Karnataka Power Corporation Ltd. included in other current assets considered recoverable by She management. (ii) Similarly, as per Schedule-20(Notes forming part of the Accounts) the Auditors have mentioned as under: 4. City Civil Court at Ahmedabad vide its order dated 30/04/2007 has dismissed Civil Suit filed by M/s. Mukat Pipes ltd. against the company and passed decree order for ₹ 4,53,64,640/- with 12% interest and cost of the suit in favour of the company. Based on the order company has initialed actions for recovery of decretal amount, in terms of decree the company has recognised interest of ₹ 2,40,86,760/on the decretal amount for the period from date of suit till 31-03-2009. It is noticed as per letter dated 12-02-2014 placed at page 57 to 59 of the paper book the assessee had submitted the details in respect of issue of not showing interest income from Mukut Pipes Ltd. The relevant part of the letter addressed to the Assessing Officer by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 ITR 229(Mad) v) Commissioner of Income-tax v. Indbank Housing Ltd. (2009) 224 CTR 297 (Mad) vi) ANZ Grindlays Bank Ltd. v. Commissioner of Income-tax (2011) 250 ITR 125 (Cal) vii) CIT vs. KICM Investments Ltd. (2009) 310 ITR (St) 4 (SC) 2. In Para (ii) you have asked us to explain the note put up by auditor in respect of inventories of construction material stating that the same inventory of ₹ 23,59,962/- lying in the possession of Karnataka Power Corporation. In F.Y. 2006-07, we obtained the work from said Corporation and due to dispute, as mentioned in preceding paragraph, they uncalled the bank guarantee and they also took the possession of inventories lying at the site, which is belonging to company, and therefore, by way of disclosure, the auditor has disclosed the same in audited accounts by way of note. We hope this will clarify the issue. The assessee has categorically explained that as a result of decree order it has recognized interest income at ₹ 2,40,86,760/- on the decretal amount for the period from the date of suit till 31.03.2009. But in spite of having court decree it has not received anything toward the principal or interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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