Escorts Construction Equipment Ltd., ... vs Department Of Income Tax

DCIT, vs Escorts Construction Equipment Ltd., Central Circle-12, Room No.-330, Plot No.-219, Sector-58, ARA Centre, Jhandewalan Extn., Ballabgarh-121004. New Delhi PAN-AAACE2339R (APPELLANT) (RESPONDENT)

Appellant by Sh.K.K.Jaiswal, Sr. DR Respondent by Sh.Pardeep Kumar, CA

Date of Hearing 05.05.2015 Date of Pronouncement 15 .05.2015

ORDER PER DIVA SINGH, JM

By the present appeal, the Revenue assails the correctness of the order dated 31.07.2013 of CIT(A)-XIII, Delhi pertaining to 2010-11 assessment year on the following grounds:-

1. "On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs.28,31,000/- on account of the prior period expenses.

2. On the facts and circumstances of the case and in law, the CIT(A) has erred in merely relying on the statement of the assessee that the prior period expenses had crystallized during the year, without submission of any evidence for crystallization of these expenses during the year."

2. The subject matter of dispute in the present appeal is the addition made by way of rejecting the claim of prior period expenses put forth by the assessee. The AO required the assessee to justify the claim put forth stated to be on account of material; manufacturing; operating sales; and administration. Rejecting the explanation in view of the fact that the assessee following mercantile system of accounting was required to account for current year's income /expenses only as per law, addition of the said amount was made.

I.T.A .No.-5463/Del/2013

3. In appeal before the First Appellate Authority, considering the explanation where the expenses were stated to be on account of rent, erection and commissioning charges, repair and maintenance consultancy/professional charges, rebook charges etc. the claim was allowed relying on Saurashtra Cement and Chemical Industrial Ltd. vs. CIT 213 ITR 523 (Guj.) etc. Aggrieved by which the Revenue is in appeal before the Tribunal.

4. Both the parties have been heard whereas the ld. Sr. DR submits that no evidence in support of the claim has been referred to in the impugned order and there is no discussion thereon while granting relief. The Ld. AR on the other hand apart from relying upon the impugned order, submitted that in the alternate the issue may be restored to the AO who has not cared to discuss the facts on record. The alternate submission of the Ld. AR was agreed to by the department.

5. We have heard the rival submissions and perused the material available on record. On a consideration of the peculiar facts and circumstances of the case, we are of the view that for want of necessary discussion on facts both the impugned order and the assessment order deserve to be set aside. The issue in the circumstances is required to be considered afresh considering the facts on record. Accordingly, agreeing with the alternate submission of the Ld. AR the issue is restored back to the file of the AO with the direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.

6. In the result the appeal of the Revenue is allowed for statistical purposes.

The order is pronounced in the open court on 15th of May 2015.

Sd/- Sd/- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 15/05/2015 *Amit Kumar/R.Naheed*

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

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ASSISTANT REGISTRAR ITAT NEW DELHI Date

1. Draft dictated on 05.05.2015 PS

2. Draft placed before author 05.05.2015 PS

3. Draft proposed & placed before the JM/AM second member

4. Draft discussed/approved by JM/AM Second Member.

5. Approved Draft comes to the .05.2015 PS/PS Sr.PS/PS 6. Kept for pronouncement on PS

7. File sent to the Bench Clerk .05.2015 PS

8. Date on which file goes to the AR

9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.

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