DY. COMMISSIONER OF INCOME-TAX-1(1)(1), MUMBAI, MUMBAI vs. M/S. GANESH BENZOPLAST LIMITED, MUMBAI

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ITA 3860/MUM/2025Status: DisposedITAT Mumbai05 August 2025AY 2009-10Bench: JUSTICE (RETD.) C.V. BHADANG (President), SHRI VIKRAM SINGH YADAV (Accountant Member)1 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the order under Section 263 of the Act, which formed the basis of the impugned addition, had been quashed by the Tribunal itself. Therefore, until the Revenue succeeds in its challenge before the High Court, the Section 263 order is not in existence, and the CIT(A)'s deletion of the addition is upheld.

What were the facts?

The Revenue challenged the CIT(A)'s order deleting an addition of Rs. 58,37,00,000/- made by the AO on account of capitalized interest. This addition was based on an order passed under Section 143(3) read with Section 263 of the Income Tax Act.

What were the issues?

Whether the CIT(A) was justified in deleting the addition when the order under Section 263, which formed the basis for the assessment, was subject to challenge before the High Court after being set aside by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: JUSTICE (RETD.) C.V. BHADANG & SHRI VIKRAM SINGH YADAV

For Appellant: Shri Arun Kanti Datta, CIT-DR
For Respondent: Shri Himanshu Gandhi
Hearing: 05/08/2025Pronounced: 05/08/2025

PER JUSTICE (RETD.) C.V. BHADANG, PRESIDENT :

1.

By this appeal, Revenue is challenging the order dated 13.03.2025 passed by the learned Commissioner of Income Tax (Appeals) (‘CIT(A)’ for short) which in turn arose out of the assessment order dated 09.07.2019 passed by the Assessing Officer (‘AO’ for short) thereby making an addition of Rs.58,37,00,000/- in view of capitalized interest on account of OTS reduced from WDV of plant and machinery. The said order was passed under Section 143(3) read with section 263 of the Income Tax Act, 1961 (‘Act’ for short). The learned CIT(A) by the impugned order has deleted the addition in view of the fact that the order under Section 263 of the Act passed by learned Pr. CIT, Mumbai on 25.03.2019 (in consequence to which the impugned assessment order was passed) was set aside by this Tribunal vide order dated 11.09.2019 in ITA No. 2047/Mum/2019. This appeal pertains to assessment year 2009-10.

2.

We have heard parties. Perused record.

3.

The only contention raised by the learned DR is that the order dated 11.09.2019 in is subject matter of challenge before the Bombay High Court and as such, the learned CIT(A) was not justified in deleting the addition.

4.

The learned AR has submitted that the order under Section 263 of the Act, which was the very basis of the impugned addition, having been quashed by this Tribunal, consequently the order does not survive.

5.

We have considered the submissions. The contention on behalf of the appellant cannot be accepted. The fact remains that the order under Section 263 of the Act passed by the learned CIT(A) no longer survives as the same is quashed by this Tribunal by order dated 11.09.2019. Unless and until the Revenue succeeds in its challenge before the High Court, the order under Section 263 of the Act is not in existence. Thus, no exception can be taken to the order passed by the learned CIT(A) deleting the addition. In that view of the matter, no case for interference is made out. The appeal is accordingly dismissed.

Order pronounced in the open court on 05/08/2025.

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