DEPUTY COMMISSIONER OF INCOME TAX, PUNE vs. M/S. FAURECIA INTERIOR INDIA PVT LTD, PUNE

आदेश / ORDER PER ANIL CHATURVEDI, AM :

This appeal filed by the Revenue is emanating out of the order 1. of Commissioner of Income Tax (Appeal) – 13, Pune dated 23.11.2016 for A.Y. 2008-09.

“Whether on the facts and circumstances of the case, the CIT(A) is right in allowing the disallowance made u/s 10A(7) r.w.s. 80IA(10) of the Act, of Rs.2,88,69,742/-.”

10A r.w.s. 80IA(10) of the Act on account of excess profit adjustment.

Being aggrieved with the said assessment order, assessee company filed

an appeal before the Ld.CIT(A). Subsequently, CIT-IV, Pune initiated

proceedings u/s 263 of the Act. On examination of the assessment

records, Ld.CIT considered that assessment order passed by the AO to

be erroneous and prejudicial to the interest of the revenue as the AO

did not disallow the mark to market losses on forward contracts of

Rs.2,33,89,522/- by ignoring the Board’s Circular No.3 of 2010.

Accordingly, Ld.CIT vide order dated 21.03.2014 passed order u/s 263

of the Act set aside the order u/s 143(3) of the Act passed by the AO

and directed the AO to reframe the assessment as per the directions

contained in his order. The ld. A.R. further submitted that against the

order of ld. CIT passed u/s 263, assessee preferred appeal before the

Tribunal. She submitted that the Co-ordinate Bench of the Tribunal

vide order dated 05.01.2017 in ITA No.1058/PUN/2014 has held that

revisionary proceedings exercised by Ld.CIT u/s 263 of the Act to be

not correct and accordingly set aside the order of Ld.CIT. She placed

on record the copy of the aforesaid order of the Tribunal and pointed to

the relevant findings of the Tribunal. She therefore submitted that

when the order of ld. CIT passed u/s 263 itself has been set aside by

the Tribunal, the consequential order passed u/s 143(3) r.w.s. 263 of

the Act does not survive. She submitted that Ld.CIT(A) on merits has

deleted the addition and on this ground also, the appeal of Revenue

needs to be dismissed. She thus supported the order of ld. CIT(A). Ld.

D.R. on the other hand did not controvert the submissions of Ld.A.R.

but supported the order of lower authorities.

record. It is an undisputed fact that original assessment order u/s

143(3) of the Act was passed by AO on 30.12.2011. Thereafter, Ld.CIT

vide order dated 21.03.2014 passed u/s 263 of the Act whereby he

directed the setting aside of the assessment order passed by the AO

and directed the AO to reframe the assessment as per the directions

contained therein. Consequent to order passed u/s 263, AO framed

assessment u/s 143(3) r.w.s. 263 vide order dated 16.03.2015 which

was challenged by assessee before Ld.CIT(A). Ld.CIT(A) by the

impugned order on merits granted relief to assessee. Against the

order passed by Ld.CIT u/s 263, assessee carried the matter before the

Tribunal. The Co-ordinate Bench of the Tribunal in ITA

No.1058/PUN/2014 order dt.05.01.2017 had held that the revisionary

proceedings exercised by Ld.CIT to be not correct and therefore had set

aside the order passed by Ld.CIT u/s 263. In such a situation, when

the original order of Ld.CIT passed u/s 263 of the Act has been set

aside, the consequential order passed by the AO u/s 143(3) r.w.s. 263

of the Act does not survive. We further find that Ld.CIT(A) even on

merits has decided the issue in assessee’s favour. In such a situation,

we do not find merit in the appeal of Revenue. We thus dismiss the

ground of Revenue. Thus, the ground of the Revenue is dismissed.

Order pronounced on 12th day of July, 2019.

Sd/- Sd/- (VIKAS AWASTHY) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 12th July, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.