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20-11-2018, Divya Creation, Section 263, 115JC, Tribunal Delhi

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3 weeks 3 days ago #7783 by amit
Section - 263, 115JC, 10A, 195
Order Date - 20-11-2018
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Divya Creation
Respondent - PCIT
Justice - AMIT SHUKLA JM & O.P. KANT AM
Citation - 1118Taxpundit183
Appeal No. - ITA No.2715/Del/2018
Asstt. Year - 2013-14

Order

PER : O.P KANT, A.M:

This appeal by the assessee is directed against order dated 29/03/2018 passed by the Ld. Commissioner of Income Tax, Noida (in short ‘the Ld. CIT’) holding the assessment order dated 29/12/2015 passed by the Assessing Officer for assessment year 2013-14 as erroneous and prejudicial to the interest of the Revenue. The grounds raised by the assessee in the appeal are reproduced as under:

1. That on the facts and circumstances of the case and in the Law, the Pr. CIT has grossly erred in assuming jurisdiction u/s 263 for directing the Assessing Officer (AO’) to frame the assessment order de-novo.

2. That the assumption of jurisdiction u/s 263 by the CIT is improper & unjustified as the AO framed the original order u/s 143(3) after conducting enquiries on the issues as alleged in the impugned order u/s 263.

3. That on the facts and circumstances of the case and in the Law the assessee is entitled to deduction u/s 10A at Rs. 1,85,25,293 as claimed and initiation of section 263 proceedings on the same is bad in law on the aspect of assumption of jurisdiction u/s 263 as well as on merits.

4. That on the facts and circumstances of the case and in the Law the provisions of section 115JC (Minimum Alternate Tax) are not applicable to assessee for the subject year and initiation of section 263 proceedings in this regard is bad in law on the aspect of assumption of jurisdiction u/s 263 as well as on merits.

5. That on the facts and circumstances of the case and in the Law the assessee is clearly entitled to deduction on account of commission expenses of Rs. 14, 51,442 which cannot be the subject matter of disallowance u/s 40(a)(i) and initiation of section 263 proceedings in this regard is bad in law on the aspect of assumption of jurisdiction u/s 263 as well as on merits being squarely a covered matter in assessee s own case for the preceding year.

6. That on the facts and circumstances of the case and in the Law the assessee is entitled to deduction u/s 10A on interest income of Rs. 66,68,296 as claimed and initiation of section 263 proceedings in this regard is bad in law on the aspect of assumption of jurisdiction u/s 263 as well as on merits. That the appellant craves leave to Add to and / or Amend, modify or withdraw the grounds outlined above before or at the time of hearing of the appeal.”

2. Briefly stated facts of the case are that the assessee firm was engaged in the business of manufacturing and export of gold and silver jewellery. For the year under consideration, the assessee firm filed return of income declaring total taxable income of Rs.1,87,80,244/- after claiming deduction under section 10A of
the Income-tax Act (in short ‘the Act’), amounting to Rs.1,85,25,293/-. The case was selected scrutiny and assessment was completed under section 143(3) of the Act at total income of Rs.1,95,10,920/- by the Assessing Officer. Subsequently, the Ld. CIT called for the records and found that the assessment order
passed by the Assessing Officer was erroneous insofar as prejudicial to the interest of the Revenue. Accordingly, he issued notice under section 263 of the Act and passed order dated 29/03/2018, holding that the Assessing Officer accepted the version of the assessee without making any enquiry or verification on following issues:

(i) that while allowing deduction under section 10A of the Act amounting to Rs 1 85,25,293/-, the Assessing Officer has not verified that as per 4th proviso to subsection (1) of section 10A no deduction was allowable from assessment year 2012 13 onwards.

(ii) that applicability of Minimum Alternative Tax (MAT) on adjusted total income as per provisions of section 115JC of the Act was not examined.

(iii) that deduction under section 10A of the Act has been wrongly allowed in respect of disallowance of commission expenses of Rs.14,51,442/-paid to non-resident without deduction of tax at source (TDS) under section 195 of the Act,

(iv) that deduction under section 10A of the Act has been wrongly allowed on interest income of Rs.66,868,296/- on

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