Dewan Sugars Mills Ltd., Meerut vs Assessee

Dewan Sugars Ltd. Vs. DCIT, Circle-10(1), C/o. J.M. Chadha & Chadha New Delhi. Chartered Accountants 299, P.L. Sharma Road, Meerut.

(PAN AAACD 3465 H)

(Appellant) (Respondent)

Date of hearing : 11.03.2015 Date of Pronouncement : 11.03.2015

Appellant by : Sri Sanjay Sood CA, And Sri N.K. Chadha, Advocate Respondent by: Smt. Parwinder Kaur, Sr. DR.

ORDER

PER SHRI GEORGE GEORGE K, JM:

1. This appeal, at the instance of the assessee, is directed against the CIT(A)'s

order dated 13.07.2012. The relevant assessment year is AY 2004-05.

2. The grounds raised reads as follows:-

" 1. On the facts and circumstances of the case and in law, the Ld CIT(A) has erred in not adjudicating upon the additional ground of appeal raised by the appellant as hereunder ITA No.5068/Del /2012 2

"On the facts and circumstances of the case and in law. the learned Dy. Commissioner of Income Tax was not justified in law to re-open the assessment completed u/s 143(3) in the case of the assessee/appellant on the basis of audit observation/objection ".

2. That without prejudice to the above, the Learned CIT(A) has erred in not allowing depreciation on electric installations @ 25% as claimed by the appellant, thereby, confirming the addition of Rs.12,62,365/- made by the learned AO in his order u/s 147/143(3)."

3. Briefly stated the facts of the case are as follows.

The assessee is a company. It is engaged in the business of manufacture and

sale of sugar. The assessment u/s 143(3) was completed on 30.11.2006 determining

total loss at Rs.9,13,12,228/-, subsequently, assessment was reopened by issuance of

notice u/s 148 of the Act on 30.03.2011. The reassessment u/s 147 r.w.s 143(3) of

the Act was completed by order dated 31.10.2011 determining the total loss at

Rs.4,27,31,596/-. In the reassessment completed, the Assessing Officer made the

following disallowances:-

"i) Disallowance of Depreciation on Machinery amounting to Rs.5,10,14,037/- and

ii) Disallowance of Depreciation on Electric Installation amounting to Rs.12,62,365/-"

4. . Aggrieved by the assessment, the assessee preferred an appeal before the First

Appellate Authority. The assessee raised grounds with reference to disallowance of

depreciation on machinery amounting to Rs.5,10,14,037/- and on electric

installation amounting to Rs.12,62,365/-. The assessee also raised additional ground

with reference to validity of reopening of assessment by issuance of notice u/s 148

of the Act. The CIT(A) partly allowed the appeal of the assessee on merits. The ITA No.5068/Del /2012 3

CIT(A) deleted the disallowance of depreciation on machinery amounting to

Rs.5,10,14,037/-. The CIT(A) confirmed the disallowance of depreciation on

electric installation amounting Rs.12,62,365/-. With reference to the additional

ground raised, the CIT(A) omitted to adjudicate the same.

5. Aggrieved, the assessee is in appeal before us. The Ld. Authorized

Representative of the assessee submitted that the CIT(A) has erred in not

adjudicating upon the additional ground raised before him. The submission made

before the CIT(A) were reiterated before us.

6. The Ld. DR present was duly heard.

7. We have heard rival submissions and perused the material on record. With

regard to reopening of assessment by issuance of notice u/s 148 of the Act, the

assessee has challenged the same by raising additional ground before the CIT(A).

The additional ground raised before the CIT(A) reads as follows:-

"On the facts and circumstances of the case and in law. the learned Dy. Commissioner of Income Tax was not justified law to re-open the assessment completed under section 143(3) in the case of the assessee/appellant on the basis of audit observation/objection ".

8. Elaborate submissions before the CIT(A) with reference to the above

additional ground are extracted at para 5 of the impugned order of the CIT(A). The

finding of the CIT(A) at para 5.3 of the impugned order is only with reference to the

merits of the case and there is no adjudication on validity of reopening of

assessment. Therefore, it is appropriate to remand the entire case for de novo

consideration to the CIT(A) and we do so. The CIT(A) is directed to dispose of the ITA No.5068/Del /2012 4

matter as expeditiously as possible after affording reasonable opportunity of hearing

to the assessee. It is ordered accordingly.

9. In the result, the appeal filed by the assessee is allowed for statistical

purposes.

The decision was pronounced in the open Court on 11th March, 2015.

Sd/- Sd/- (N.K. SAINI) (GEORGE GEORGE K.) Accountant Member Judicial Member

Dated: 11th March, 2015. Aks/-

Copy forwarded to 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi