Ita/404/2008 Of The Commissioner Of Income Tax v. M/S Kurlon Ltd

IN THB HIGH COURT OF KARNATAKA AT BANGALORE DATEKD THIS THE O08 DAY OF JULY 2014 PRESENT THR HON BLE MR.JUSTICE N.KUMAR| AN D THR HON'BLBE MR..JUSTICBK B.MANOHA ITA No.404 /2008 BBRHIWEE 1. The Commissioner of Income Tax,C.R Building, Queens Road,Bangalore.2. The Assistant Commissioner of Income Tax,Circle — 11(5),C.R. Building,|Queens Road,Bangalore... Appellant(By Sri.K.V.Aravind, Advocate)AN):M/s.Kurlon Ltd.,No.4/7, Dickenson Road,Manipal Centre,North Block, II Floor,Bangalore....Responden (By Sri.R.B.Krishna, Advocate) This ITA is filed U/s.260-A of I.T Act, 1961 arisingOUToT|orderdated|31/10/2007passedinITA.No.486/Bang/2006, for the Assessment year 2001-O2, praying that this Hon’ble Court may be pleased to: 1. formulate the substantial questions of lawstated therein.stated therein. 11. allow the appeal and set aside the order|passedby theITAT,Bangalore|1nITA.No.486/Bang/2006, dated 31-10-2007.and confirm the order of the Appellate|Commissioner and confirming the orderpassed by the Assistant Commissioner ofIncome Tax, Circle — 11(5), Bangalore, in theinterest of justice and equity.passedby theITAT,Bangalore|1nITA.No.486/Bang/2006, dated 31-10-2007.and confirm the order of the Appellate|Commissioner and confirming the orderpassed by the Assistant Commissioner ofIncome Tax, Circle — 11(5), Bangalore, in theinterest of justice and equity. This appeal coming on for Hearing this day,N.Kumar J.,delivered the following: JUDGMENT The Revenue has preferred this appeal undersection 260A of the Income Tax Act, 1961 (for short the Act) challenging the order passed by the Income Tax. Appellate Tribunal, Bangalore Bench ‘A’ (for short ‘the Tribunal’), whereby the Tribunal set aside the orderpassed by the Commissioner of Income Tax, Bangalorepassed in proceedings under Section 263 of the Act. OoThe Assessing Officer in the assessment orderalter setting out the facts and amounts under variousheads restricted the benefit of provision of SectionsS8OIA(a) and 80HHC of the Act. The assessee was askedto comment on the proposed disallowance. Theassessee did not give any reply. Therefore, theassessment order came to be passed restricting theclaim under Section SOHHC. The assessee has no!erievance, however, the Commissioner of Income Tax,by virtue of power conferred on him under Section 263.of the Act initiated revisionary proceedings. Ajiterhearing both the sides, he was of the view that in thecomputation statement certain expenses on account ofraw material, power and fuel, stores and spares etc.,were prorated at 63.3% and other expenses like, rent, rates and taxes, insurance, advertisement etc., at.09.9%. There is no explanation offered for suchdifferential treatment. The Assessing Officer hascompleted the assessment without making any enquiryabout the correctness of the claim of the assessee., Therefore, set aside the assessment and remanded the)matter to the Assessing Officer to reexamine the wholeissue airesh and pass orders aiter giving adequateopportunity to the assessee. | 3.|Agegrieved by the said order, the assessee preferredan appeal to the Tribunal. The Tribunal on carefulconsiderationot ql]thematerialsCaml TO the.conclusion that a perusal of the observations made bythe Assessing Officer would indicate that he had, infact, considered the entire details as found in the.computation statement consisting of travelling andconveyance, advertisement, sales promotion, packing,transportation and freight, commission and sales and 3.|Agegrieved by the said order, the assessee preferredan appeal to the Tribunal. The Tribunal on carefulconsiderationot ql]thematerialsCaml TO the.conclusion that a perusal of the observations made bythe Assessing Officer would indicate that he had, infact, considered the entire details as found in the.computation statement consisting of travelling andconveyance, advertisement, sales promotion, packing,transportation and freight, commission and sales and penal charges. These were prorated over Bangalore andBhuvaneswar units. A cursory perusal of the samewould indicate that all the relevant expenses have beenapportioned to Bangalore unit and the claim undersection 8OIA has been made correctly. Therefore, theTribunal found fault with the order passed by theCommissioner on the ground that the order passed bythe Assessing Authority is neither erroneous norprejudicial to the interest of the Revenue. Therefore, setaside the order passed by the Commissioner andrestored the assessment order. Being aggrieved by thesaid order, the Revenue is before this Court in appeal. 4This appeal was admitted to consider the followingsubstantial question of law: Whether the Tnbunal was correct inholding|thatthe|orderof|assessmentcomputing deduction under Section SOIA of|the Act was neither erroneous nor prejudicial|to the interest of the Revenue as percentage of expenditure adopted by the assessee from|Bhuvaneshwar unit and Bangalore unit was.permissible? 5We have heard the learned counsel for both theparties. 6. From the aforesaid facts, it is clear that theAssessing Authority has taken into consideration all thedetails mentioned in the computation statement whichis taken from the books of accounts maintained by theaSSCSSEEandhas|recordedthefinding.TheCommissioner proceeds on the basis that the figuresfound in the calculation statement has no basis|ignoring that these figures are taken from the books ofaccounts. In that view of the matter, the Tribunal was)justiied in setting aside the order passed by theCommissioner and restoring the order of the AssessingAuthority.| TS|Therefore, the substantial question of law isanswered in favour of the assessee and against theRevenue. No merits. The appeal is dismissed. Sd/-JUDGE od/-|JUDGE. _* | mp