What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order on the grounds of short-term capital gains and depreciation disallowance. The matter was restored to the CIT(A) for fresh adjudication after considering the assessee's submissions and evidence.

The assessee claimed certain expenditure while calculating short-term capital gains on the sale of plant and machinery. The Assessing Officer denied this claim and included it in the income. The CIT(A) upheld the AO's order without proper examination.

What were the issues?

Whether the expenditure claimed by the assessee for the sale of plant and machinery was allowable, and whether depreciation was rightly disallowed.

M/S Aster Drugs & Pharmaceuticals… vs The Addl.Commissioner of Income… | ITAT Chandigarh 2019

आदेश/Order

Per Sanjay Garg, Judicial Member :

The present appeal has been preferred by the assessee against the order dated 15.02.2016 of the Commissioner of Income Tax (Appeals)-2 Chandigarh [hereinafter referred to as CIT(A)] relating to 2009-10 assessment year.

The assessee has taken following grounds of appeal:

That the Ld. Commissioner of Income Tax (Appeals) has erred in law in as well as on facts in upholding the short term capital gains taking the full value of consideration at Rs. 1,3 7,83,173/- as against Rs. 1,04,00,000/- taken by the assessee company and as such the order passed is illegal, arbitrary & unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the addition of Rs.33,83,173/- being the revenue expenditure claimed and at the same time adding the same towards the total consideration received which tantamounts to double addition and as such the addition upheld is arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax(Appeals) has further erred in law as well as on facts in upholding the addition of Rs.6,30,881/- disallowing the claim of depreciation which is arbitrary and unjustified. 4. That the order of the Ld. Commissioner of Income Tax (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.

ITA-695/CHD/2017 A.Y. 2009-10 Page 2 of 3

Ground Nos. 1 and 2 are relating to the computation of

short term capital gain. The assessee during the year sold

certain plant and machinery and claimed certain expenditure

incurred for the said purpose and after deducting Rs. 33.83

lacs, offered the income under the head ‘short term capital

gain’. However, the Assessing Officer (hereinafter referred to

as ‘AO) denied the claim of expenditure and included the same

into the income of the assessee.

Before the CIT(A), the assessee furnished details of

expenditure. The ld. Counsel has also invited our attention to

the letter dated 04.02.2016 placed at page 51 of the Paper

Book whereby the assessee had submitted that each and every

detail regarding transaction including the expenditure

incurred was furnished before the AO. However, the ld. CIT(A)

without considering the submissions of the assessee and

without examining the details, just confirmed the order of the

AO. The order of the ld. CIT(A) is non-speaking order on this

issue. Under the circumstances, we set aside the order of the

CIT(A) on this issue and restore the matter back to him with

the direction to consider the submissions of the assessee

examine the details, explanation and evidences furnished by

the assessee and to pass a speaking order in accordance with

law.

Ground No. 3

In ground No. 3, assessee has agitated the confirmation

of addition of Rs. 6,30,881/- on account of disallowance of

claim of depreciation. The AO disallowed the claim of

depreciation observing that the assessee did not carry out any

ITA-695/CHD/2017 A.Y. 2009-10 Page 3 of 3

manufacturing activity during the year. The assessee

submitted that the assessee during the year had carried out

job work and that the unit was operated upon. However, the

CIT(A) did not give any specific finding on the above

contention of the assessee. In view of this, this issue is also

restored to the file of the CIT(A) for adjudication afresh after

due consideration of the submissions and details furnished by

the assessee. No other ground raised or pressed.

In view of our findings give above, the appeal of the

assessee is treated as allowed for statistical purposes.

Order dictated and pronounced in the Open Court on completion of hearing on 19th February,2019.

Sd/- Sd/-

( अ�नपूणा� गु�ता ) (संजय गग�) ( ANNAPURNA GUPTA) (SANJAY GARG ) लेखा सद�य/ Accountant Member �याय�क सद�य/ Judicial Member ‘Poonam’ आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.

आदेशानुसार/ By order सहायक पंजीकार/ Assistant Registrar

M/S ASTER DRUGS & PHARMACEUTICALS LTD,CHANDIGARH vs. THE ADDL.COMMISSIONER OF INCOME TAX, CHANDIGARH

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