VOLTBEK HOME APPLIANCES PRIVATE LIMITED,MUMBAI vs. ASSISTANT DIRECTOR OF INCOME TAX, CENTRALIZED PROCESSING CELL. , BENGALURU

The present appeal has been filed by the assessee challenging the impugned order dated 31/08/2022, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], which in turn arose from the intimation dated 22/12/2021 issued under section 143(1) of the Act, for the assessment year 2020–21.

Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022 “1 That on the facts and circumstances of the case and in law, Ld. Commissioner of Income Tax (Appeals) ["CIT (A)"] has erred in dismissing the appeal without giving any opportunity of personal hearing, disregarding the multiple requests made the by the Appellant for the same in the submissions made before the Ld. CIT(A).

2. That on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in dismissing the appeal on the ground that intimation asund wh.143(1)(a) is found to be correct on facts and in law without appreciating the fact the expenses are already disallowed by the Appellant in its Return of Income and any further disallowance will lead to double disallowance of expenses for the year under consideration.

Particulars Amounts in INR Amount in Income Tax Return 54,61,195 Amount mentioned in Form Annexure 3CD 1,36,15,055 Adjustment made to total income 81,53,860

41 The Ld. AO has erred in disallowing the amount of INR 81,53,860/- after disregarding the explanations provided by the Appellant and without appreciating the fact that the said expenditure has been duly considered by the Appellant in the income-tax Return filed by the Appellant for the year under consideration. The lid AO has erred in disallowing the amount of INR 81,53,860/-, disregarding the response filed by the Appellant that the total amount disallowed on Capital Account in Tax return filed by the Company is the net amount which comprises of: Particulars Amounts in INR Unrealsed Foreign exchange fluctuation loss on capital account (as also shown in 1,36,15,055 Tax Audit Report in Form 3CD) ADD: Other capital expenditure debited to 31,25,453 Statement of Profit and loss LESS: Realsed Foreign exchange (1,12,79,313) fluctuation loss on capital account Net disallowance on capital account under 54,61,195 Page | 2

Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022 section 37(1) of the Act Whereas the Tax Audit report only states the Gross Unrealized Foreign exchange fluctuation loss on capital account of INR 1.36,15.055. Hence, there is no variation.

5. That on the facts and circumstances of the case and in law, the Ld. AO has erred in disallowing an amount of INR 18,694/- on account of inconsistency in Expenditure by way of penalty or fine for violation of any law for the time being in force; claimed in the Tax return in schedule Ol and the amount stated in the Tax audit report, as below: Particulars Amount (INR) Amount in Income Tax Return 0 Amount mentioned in Form Annexure 3CD 18,694 Adjustment made to total income 18,694 5.1 The Ld. AD has erred in disallowing the amount of INR 18,694/- after disregarding the explanations provided by the Appellant and without appreciating the fact that the said expenditure has been duly considered by the Appellant in the income-tax Return filed under Part A, Ol, point 8 e. Hence, there is no variation. That the above grounds of appeal are mutually exclusive and without prejudice to each other. That the Appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before or at the time of hearing of this appeal. Any consequential relief to which the Appellant may be entitled under low in pursuance of the oforesaid grounds of appeal, or otherwise may be granted.”

3. The brief facts of the case are: The assessee is a company incorporated on 18/08/2017 and is a joint venture between Voltas Ltd and Ardutch BV for selling household appliances under a new brand „Voltas Beko’. The assessee is formed with the objective to carry out the business of manufacturing, purchasing, importing, marketing, sale, distribution, and after-sales servicing of consumer durable products and domestic appliances, all related spare parts and consumables, and other White Good products. For the year under consideration, the assessee filed its return of income on 13/02/2021 declaring a business loss of Rs.178,87,56,549, and claimed a tax refund of Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022 Rs.32,42,880. The return filed by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as section 142(1) of the Act were issued and served on the assessee. While the scrutiny proceedings for the year under consideration were going on, the assessee received an intimation issued under section 143(1) of the Act proposing to make disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return. The assessee submitted its response stating that all the amounts disclosed in Form 3CD have been duly considered while filing the tax return for the year under consideration. However, vide intimation dated 22/12/2021 issued under section 143(1) of the Act, inter-alia, a sum of Rs.81,53,860 was disallowed. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee. Being aggrieved, the assessee is in appeal before us.

4. During the hearing, the learned Authorised Representative (“learned AR”) at the outset submitted that the learned CIT(A) did not consider the detailed submissions filed by the assessee in respect of disallowance made vide intimation issued under section 143(1) of the Act. The learned AR also submitted that the learned CIT(A) did not grant the opportunity of personal hearing, despite the assessee specifically requesting for same.

Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022

Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022

(4) Such hearing shall be conducted through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board. (5) Any examination or recording of the statement of the appellant or any other person shall be conducted by Commissioner (Appeals) under this Scheme, exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board. (6) The Board shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the appellant, or his authorised representative, or any other person is not denied the benefit of this Scheme merely on the ground that such appellant or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end.”

by the assessee are allowed for statistical purposes.

9. In the result, appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 27/04/2023