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03-07-2019, L.T. Foods, Section 153A, 132, 40A(3), Tribunal Delhi

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1 week 5 days ago #9992 by amit
Section - 153A, 132, 40A(3), 80HHC, 148
Order Date - 03-07-2019
Favouring - Set Aside
Court - Tribunal Delhi
Appellant - L.T. Foods Ltd
Respondent - ACIT
Justice - BHAVNESH SAINI JM & PRASHANT MAHARISHI AM
Citation - 719Taxpundit82
Appeal No. - ITA No. 838/Del/2014, 4161 & 4162/Del/2013
Asstt. Year - 2003-04 to 2005-06

Order

PER : PRASHANT MAHARISHI, A. M.

1. This is an appeal of one assessee for three years involving similar issues therefore they were argued together and now disposed of by this common order.

ITA NO 838/Del/2014 For AY 2003-04 ( By Assessee)

2. This appeal is filed by the assessee the order of the Commissioner of income tax (appeals) – XXXIII, New Delhi dated 10/10/2013.

3. The assessee has raised the following grounds of appeal in ITA No. 838/Del/2014 for the Assessment Year 2003-04:-

“1. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not holding that the assessment completed vide order dated 19.08.2011 under section 143(3) r.w.s. 153A of the Income-tax Act („the Act‟), is beyond jurisdiction, bad in law and void-ab- initio.

2. That the Commissioner of Income-tax (Appeals) erred on facts and in law in holding that the issue of legality of search initiated under section 132 of the Act cannot be adjudicated by the first appellate authority.

3. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not holding that the impugned assessment under section 153A having been completed de-hors any incriminating material/document being found/ seized during the course of search conducted under section 132 of the Act m the case of the appellant, is illegal and bad in law.

4. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not deleting various additions/disallowances made by the assessing officer de-hors any material/document found during the course of search.

5. That the Commissioner of Income-tax (Appeals) erred on facts and in law in affirming the action of the assessing officer in relying upon erroneous findings given in the special audit report furnished under section 142(2A) of the Act, without judiciously appreciating thg details/ explanation furnished by the appellant.
Without prejudice

5. That the Commissioner of Income-tax (Appeals) erred on facts and in law in sustaining the disallowance of cash expenditure amounting to Rs. 8,620 under section 40A(3) of the Act.

5.1. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not appreciating that the actual amount of cash expenditure incurred by the appellant was only Rs.25,000/- as against Rs.43,102/- considered by the assessing officer.

5.2. That the Commissioner of Income-tax (Appeals) erred on facts and in law in sustaining the disallowance of cash expenditure under section 40A(3) of the Act even though the said disallowance was made de-hors any document/material found during the course of search.

6. That the Commissioner of Income-tax (Appeals) erred on facts and in law in affirming the action of the assessing officer in withdrawing the entire claim of deduction under section 80HHC of the Act.

6.1. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not appreciating that the assessing officer ought to have recomputed deduction under section 80HHC, consistent with the fact that: (a) reassessment proceedings had been initiated under section 148 of the Act on the issue of deduction under that section; and (b) he himself proceeded to re-compute deduction under that section in the assessment order.

6.2. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not holding /C/that the accrued advance license fees amounting to Rs.3,11,88,864/- was includable in the eligible business income of the appellant, for the purpose of determining deduction allowable under section 80HHC of the Act.

6.3 That the Commissioner of Income-tax (Appeals) erred on facts and in law not adjudicating the issue of deductibility of allocated interest cost of Rs.10,70.23.2Id :n export of trading goods, for the purpose of deduction under section 80HHC of the Act.

6.4. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not adjudicating the issue of inclusion of the following business income viz. (i) Processing & Fobbing charges of Rs.1,33,90.665/-: (ii) Insurance claim received of Rs. 1,00,061/- and (iii) Sale of Scrap of Rs.57,949/- for the purpose of deduction under section 80HHC of the Act.

6.5. That the Commissioner of Income-tax (Appeals) erred on facts and in law in affirming ' the action of the assessing officer in reducing 100°o of 'other income‟ for the purpose of determining deduction allowable under section SOHHC of the Act.

7. That the Commissioner of Income-tax Appeals erred on facts and in law upholding the action of the assessing officer 1:1 levying interest under section 234A of the Act.

7.1 That the Commissioner of Income-tax (Appeals) erred on facts and in law in not appreciating that there was no warrant to levy interest under section 234A in the case of the appellant, as there w as no default in filing the return of income under section 153A of the Act.

4. Brief facts of the case shows that the assessee is a company engaged in the business of manufacturing and trading of rice. It filed its return of income on 2/10/2003 declaring total income of Rs. 2555011/– after availing deduction u/s 80 HHC at INR 3 8289254/- and under section 80 G of INR 1 77500/–. This return was processed u/s 143 (1) of the income tax act on 20/1/2004 at the returned income. Assessment u/s 143 (3) of the act also completed on 29/3/2006 at the total income of INR 3 0933761/– by restricting the deduction u/s 80 HHC of INR 219273253/–. In the assessment, certain other additions were also made. The assessee preferred an appeal before the learned CIT (A) – VII, New Delhi. He passed an order on 26/9/2006 and decided the certain issues in favor of the assessee and subsequently in appeal effect order dated 24/4/2007 , income was reduced to INR 23513969/– . The revenue preferred an appeal before the coordinate bench who upheld the decision of the learned CIT – A. The revenue also raised the issue before the honourable High Court. Subsequently the assessee filed anapplication u/s 154 of the income tax act on 14/9/2007 claiming additional deduction u/s 80 HHC. The above

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