JCIT (IN-SITU), CIRCLE - 1(1), KOLKATA vs. DOZCO INDIA PRIVATE LIMITED, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.1018/KOL/2026 Assessment Year: (2012-13) JCIT (IN-SITU), Dozco India Private Limited, 309, 3rd Floor, Waterloo Street, Circle – 1(1), Vs. Kolkata Kolkata - 700069 [PAN: AABCD076E] (Appellant) .. (Respondent) C.O. No.37/KOL/2026 (Arising out ITA No.1018/Kol/2026) Assessment Year: (2012-13) Dozco India Private Limited, JCIT (IN-SITU), 309, 3rd Floor, Waterloo Street, Vs. Circle – 1(1), Kolkata - 700069 Kolkata [PAN: AABCD076E] (Appellant) .. (Respondent) Appellant by : Ms Ruchika Sharma, Sr. DR Respondent by: Shri S. M. Surana, Advocate & Shri Sunil Surana, FCA Date of Hearing 24.06.2026 Date of Pronouncement 08.07.2026

O R D E R PER PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER:

These appeals and cross objection have been filed by the revenue and assessee are directed against the orders dated 22.01.2026 of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “ld. CIT(A)”)

ITA No.1018/Kol/2026/A.Y. 2012-13 JCIT vs. Dozco India Pvt. Ltd. passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year (A.Y.) 2012-13.

C.O. No.37/Kol/2026 (A.Y. 2012-13):

“5. Appellate finding and decision: 5.1 I have perused the form no.35, grounds of appeal, the impugned assessment order, the written submissions and the facts of the case. 5.2 The background of the issue is that Id PCIT-1, Kolkata passed order u/s 263 dated 13.02.2017 on the specific issue of disallowance of contingent liability on external commercial borrowing (ECV) which was claimed as deduction in the profit and loss account by the appellant company. The assessment was framed afresh by the AO vide order dated 03.08.2017 wherein the addition of Rs.2,32,00,812/- was made by the AO by observing as under:

ITA No.1018/Kol/2026/A.Y. 2012-13 JCIT vs. Dozco India Pvt. Ltd.

5.3 The appellant during the course of appellate proceedings has contended that the said liability was not contingent but an ascertained liability. The appellant has further given the exact working of the computation of the forex loss as under:

5.4 The appellant has further contended that the loss was booked as per the AS-11 prescribed by the ICAI by which the forex fluctuations are marked to market (MTM) and need to claim along with the expenses. 5.5 The appellant has further relied upon the decision of the Hon'ble Apex Court in the case of CIT v Woodward Governor India Pvt Ltd. 312 ITR 254 (SC). The appellant has also relied upon the decisions of Hon'ble ITAT in the case of Oil and Natural Gas Corpn Ltd v DCIT 261 ITR (AT) 1 (Del ITAT) and DCIT v Bank of Bahrain and Kuwait (2010) 132 TTJ 0505 (SB).

ITA No.1018/Kol/2026/A.Y. 2012-13 JCIT vs. Dozco India Pvt. Ltd. 5.6 I have considered the submission of the appellant as well as the fact of the case. It is noted that the appellant had claimed the forex losses based on the rate of currency at the end of each financial year. Further it is noted that the appellant has followed the same accounting principle with respect to forex losses over other years as well but no addition has been made in other years except the relevant previous year 2011-12. 5.7 In view of the above the addition of Rs.2,32,00,812/- made by the AO is hereby directed to be deleted. The appellant gets relief on all the grounds of appeal. 6. In the result, the appeal filed by the appellant is treated as allowed.” 5. Being aggrieved, dissatisfied, the revenue filed appeal before us. In the appellate proceedings, the assessee has preferred Cross Objection, which we have taken first to decide it. The learned Authorized Representative (ld. AR) challenges the very impugned order thereby submitting that order passed by the ld. PCIT u/s 263 of the Act is void an initio since the original order u/s 143(3) of the Act never existed in laws as it was quashed by the ld. CIT(A) by holding that it is barred by limitation and the said order has been confirmed by the ITAT in an appeal filed by the revenue. The ld. AR submits that when the original order has been set-aside so the consequential order passed by the AO in pursuant to the order passed u/s 263 of the Act is invalid and void ab initio. The ld. AR further submits that order passed by the ITAT in which the appeal of the revenue has been dismissed has been confirmed by the Hon'ble Calcutta High Court when the revenue has preferred appeal before the Hon'ble High Court against such order. The ld. AR placed the following documents: (i) Original assessment order u/s 143(3), dated 29.03.2015, (ii) ITAT Order dated 22.08.2023 and (iii) Calcutta High Court order dated 14.08.2024.

ITA No.1018/Kol/2026/A.Y. 2012-13 JCIT vs. Dozco India Pvt. Ltd. 7. Upon hearing the submission of the ld. AR of the representative parties and on perusal of the facts, we find that original assessment order in the present case was passed on 29.03.2015. The assessee appealed against the same before the ld. CIT(A) that was allowed as barred by limitation. The revenue preferred appeal against the order passed by the ld. CIT(A) before the ITAT and Hon'ble ITAT vide its order dated 22.08.2023, dismissed the appeal of the revenue by confirming the order passed by the ld. CIT(A). The revenue carried the matter before the Hon'ble Calcutta High Court where in order passed by the ITAT has confirmed by dismissing the appeal of the revenue. It is a fact that when the matter was pending before the ld. CIT(A), ld. PCIT passed an order u/s 263 of the Act on the limited ground that the assessee claimed foreign exchange loss, which was contingent in nature and set-aside the matter to the AO to verify. The AO passed the order u/s 143(3) r.w.s. 263 of the Act and disallowed the said loss as contingent in nature. It is an admitted fact that an order passed by the AO u/s 143(3) r.w.s. 263 of the Act was placed before the ld. CIT(A), wherein the ld. CIT(A) allowed the appeal of the assessee by following the judgement of the various Court. Now, the revenue has filed against the same. There is no dispute that original order passed u/s 143(3) of the Act never existed in law as it was quashed by ld. CIT(A) as barred by limitation and the order passed by the ld. CIT(A) has attained its finality as the revenue has lost its battle up to the Hon'ble High Court. Since the order passed u/s 143(3) of the Act is become a non-existence so any consequential order passed by the AO u/s 143(3)/263 of the Act is invalid and void ab initio.

ITA No.1018/Kol/2026/A.Y. 2012-13 JCIT vs. Dozco India Pvt. Ltd. wherein it has been held that whether where in absence of valid service of notice, orders u/s 147 passed against appellant were bad in law, proceedings u/s 263 originating from such orders could not be initiated against appellant.

The order is pronounced in the open Court on 08/07/2026.

Sd/- Sd/- (Rajesh Kumar) (Pradip Kumar Choubey) ACCOUNTANT MEMBER JUDICIAL MEMBER Kolkata, Dated: 08/07/2026 SAMANTA आदेश�ȧĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[फाईल/ Guard file BY ORDER, // TRUE COPY // Asstt. Registrar, ITAT, Kolkata