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TMI Blog2023 (5) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... see vide para 3.7 of the impugned order, drew our attention to paras 3.1 to 3.6 of the impugned order and submitted that the Pr. CIT listed out issues therein for verification of the same by the AO. The AO conducted enquiries in the giving effect proceedings in pursuance of 263 directions and made no additions on five issues and made additions on only four issues. The ld. AR drew our attention to chart consisting of nine issues filed earlier, submitted to ignore the same and drew our attention to another chart filed in respect of four issues. The ld. AR placed on record the assessment order dated 29-09- 2021 passed u/s. 143(3) r.w.s. 263 of the Act in support of his contention that there were no additions on five issues and the additions made relating to remaining four issues. The ld. DR did not dispute the same. In view of the same, the earlier chart consisting of nine issues is ignored and we confine proceedings to the latest chart consisting of four issues. 4. The ld. AR submits that the assessee is not interested to prosecute the issues raised in Sr. Nos. 2 and 3 relating to additions made on account of Employee's contribution to PF/ESIC and MOH project expenses. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the material available on record. We note that the assessee is a company engaged in the business of manufacturing and sale of surgical, medical and diagnostic equipment's vide para 3 of the original assessment order. Further, it is noted that the assessee e-filed return of income declaring a total income at Rs.Nil on 30- 11-2015 and later on, a revised return of income filed by the assessee declaring income at Rs.Nil on 20-03-2017. The case was selected under scrutiny as per the CBDT's action plan, notices u/s. 143(2) and 142(1) of the Act were issued on 16-03-2016. Again another notice u/s. 142(1) of the Act along with detailed questionnaire issued on 27-02-2017 which is emanating from paras 1 and 2 of the original assessment order. Further, it is noted that according to the AO, the assessee made submissions and details/particulars/explanation etc. submitted/produced/offered in the said scrutiny proceedings vide para 4 of the assessment order. The AO completed assessment and made disallowance under the head "Office expenses" and "Other miscellaneous expenses" to an extent of Rs.4,50,000/- and assessed loss at Rs.47,93,92,732/- (Rs.47,98,42,732/- - Rs.4,50,000/-) vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs makes the finding of Pr. CIT in the show cause notice stating no copies of rent agreement, receipts, are brought on record as supporting evidence to the claim of deduction vide para (ii) of the impugned order is contrary to the record. Further, we find the direction of Pr. CIT in para 3 of the impugned order that no requisite inquiries/verification conducted by the AO and further no proper examination of issues by the AO is incorrect for the reason that the assessee furnished all the details/submission which is evident from para 4 of the original assessment, we find the AO made verification in respect of the details of claim of rent expenses and admitted the claim, which means, the AO satisfied with the details furnished by the assessee and allowed deduction. 9. The ld. AR placed reliance on the decision of Hon'ble High Court of Delhi in the case of Principal Commissioner of Income Tax Vs. Delhi Airport Metro Express Pvt. Ltd. reported in 398 ITR 08 (Delhi) in support of his contentions and drew our attention to paras 11 and 12 of the said decision and argued that the Hon'ble High Court of Delhi confirmed the order of ITAT in dismissing the order of Pr. CIT u/s. 263 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, is not justified as when the details are submitted in response to the show cause notice u/s. 263 of the Act, it is incumbent upon the Pr. CIT to examine such details and give specific direction. 12. Coming to the decision of Hon'ble Supreme Court in the case of M/s. Paville Projects Pvt. Ltd. (supra) as relied on by the ld. DR, we note that the assessee therein is a company engaged in the business of manufacturing and export of garments, shoes etc., the said company shown sale of property/building by name "Paville House" for an amount of Rs.33 Crores. In view of an interim award in arbitration proceedings by way of amicable settlement termed as "family settlement" paid Rs.10.33 Crores to each to the three shareholders by name; (1) Asha, (2) Nandita and (3) Nikhil. The said payment was claimed as deduction under "cost of improvement". The AO accepted the same. The CIT u/s. 263 of the Act held the said "cost of improvement" did not fall under the definition contained in section 55(1)(b) of the Act. The ITAT by placing reliance on the decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT reported in 243 ITR 83 (SC) held that the CIT wrongly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me submissions in respect of this issue as canvassed in the first issue of rent expenses. He argued that the Pr. CIT failed to give any specific direction in this regard. He submitted to adopt the same submissions as advanced in the first issue. The ld. DR vehemently opposed the arguments of ld. AR and supported the order of Pr. CIT. We note that the AO vide Point No. 38 in the questionnaire issued u/s. 142(1) of the Act, requested the assessee to furnish breakup of expenses shown under the heads Repairs and Maintenance, Freight forwarding, Miscellaneous Expenses and Sales Promotion in profit and loss account in the format given therein which is at page 531 of the Paper Book-II. In response to the said questionnaire, the assessee furnished details of repairs and maintenance, freight forwarding, miscellaneous expenses and sales promotion expenses vide Annexure-6 (a, b, c, d) which is at page 540 of the Paper Book-II. Further, we find the assessee submitted the details relating to freight outward expenses to an extent of Rs.26,35,415/- as on 31-03-2015 vide Annexure-6 to the Pr. CIT under 263 proceedings which is at page 66 of the Paper Book-I. Further, the details of said expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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