DCIT, CIRCLE-1(1)(1), AHMEDABAD, AHMEDABAD vs. AIA ENGINEERING LIMITED, AHMEDABAD

The present four appeals relate to the same assessee and are filed by the Revenue against the orders of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi all dated 30.10.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) to 2170/Ahd/2024 [DCIT vs. AIA Engineering Limited] A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 - 2 – relating to Assessment Years (A.Ys.) 2017-18, 2018-19, 2020-21 & 2021-22.

Ld. Counsel for the assessee pointed out from the orders of the ITAT in the case of the assessee in preceding years, copies of which were filed before us, that identical disallowances made in the hands of the assessee was deleted

He pointed out that the issue relating to taxable income of M/s. Vega Industries (ME) FZC, UAE added in the hands of the assessee treating it as proprietary concern of the assessee had arisen for the first time in A.Y. 2006-07 wherein, the ITAT, after considering entire material available on record had decided the issue in favour of the assessee holding that the said subsidiary was a corporate entity and not a proprietary concern of the assessee and, therefore, the AO was not justified in taxing the income of the said company in the hands of the assessee. He pointed out that thereafter ITAT had consistently passed orders deciding this issue in favour of the assessee right from A.Y. 2006-07 to A.Y. 2013-14 and even in the A.Y. 2016-17. He pointed out that the Ld. CIT(A) had followed the order of the ITAT for A.Y. 2013-14.

With respect to the issue of excess claim of depreciation on electrical fittings, he pointed out that the ITAT had appreciated assessee’s contention that the electrical fittings were part and parcel of plant & machinery and hence eligible for depreciation @ to 2170/Ahd/2024 [DCIT vs. AIA Engineering Limited] A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 - 4 – 15% and not 10% as held by the AO. This issue, he pointed out, had been decided by the ITAT in favour of the assessee right from A.Y. 2010-11 to 2013-14, which was followed by the Ld.CIT(A) while deciding the issue in favour of the assessee. He further pointed out that the ITAT had decided this issue in favour of the assessee in A.Y 2016-17 also.

With regards to the issue of claim of depreciation on goodwill, Ld. Counsel pointed out that the said claim related to goodwill generated in the hands of the assessee on account of amalgamation of M/s. M/s. DCPL Foundries Ltd. with the assessee in F.Y. 2013-14. He pointed out that the ITAT had decided this issue in favour of the assessee in A.Y. 2016-17 following which the Ld. CIT(A) had deleted the disallowance made by the AO in the years before us.

With regards to the issue of disallowance of claim of deduction u/s.80G of the Act, Ld. Counsel for the assessee pointed out that the CSR expenditure incurred by the assessee had been claimed as deduction u/s.80G of the Act which had been disallowed by the AO holding that the said expense did not qualify for deduction u/s.80G of the Act. Ld. Counsel for the assessee pointed out that the identical issue had been decided by the ITAT in the assessee’s own case for A.Y. 2017-18 and 2018-19 where orders passed by the Ld. PCIT u/s.263 of the Act with respect to disallowance of deduction u/s.80G of the Act claimed on CSR to 2170/Ahd/2024 [DCIT vs. AIA Engineering Limited] A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 - 5 – expenses was set aside by the ITAT holding that the issue on merits was covered in favour of the assessee.

Thus, the Ld. Counsel for the assessee contended that Revenue’s appeal before us related to above issues and being covered by the decision of ITAT in the case of the assessee itself in preceding year, following which the Ld. CIT(A) had deleted the addition, the Revenue had no case before us.

Ld. DR fairly agreed with the same, though, he heavily relied on the order of the AO in respective years before us.

Considering the admitted position as noted above vis a vis all issues raised in the present appeals of the Revenue being covered in favour of the assessee by the orders of the ITAT in the case of assessee in preceding years, we shall now proceed to decide each appeal before us. pertain to A.Y. 2017-18

Grounds of appeal raised by the Revenue read as under:

The issue raised by the Department in the above appeal relate to addition made by treating M/s. Vega Industries (ME) as proprietary concern of the assessee, disallowance of depreciation on electrical fittings, disallowance of depreciation on goodwill. The above issues are admittedly covered in favour of the assessee by the decision of the ITAT in the preceding years. We, therefore, do not find any merit in the grounds raised by the Revenue. All the grounds raised by the Revenue are dismissed.

In effect, appeal of the Revenue is dismissed. pertain to A.Y. 2018-19

Grounds of appeal raised by the Revenue read as under:

Disallowance of depreciation on intangible assets (Goodwill) of Rs.60,73,472) without appreciating the facts of the case?"

In effect, appeal of the Revenue is dismissed. pertain to A.Y. 2010-21

Grounds of appeal raised by the Revenue read as under:

The issue raised by the Department in the above appeal relate to addition made by treating M/s. Vega Industries (ME) as proprietary concern of the assessee, disallowance of depreciation on goodwill and disallowance of claim of deduction u/s.80G of the Act. The above issues are admittedly covered in favour of the assessee by the decision of the ITAT in the preceding years. We, therefore, do not find any merit in the grounds raised by the Revenue. All the grounds raised by the Revenue are dismissed.

In effect, appeal of the Revenue is dismissed.

Grounds of appeal raised by the Revenue read as under:

The issue raised by the Department in the above appeal relate to addition made by treating M/s. Vega Industries (ME) as proprietary concern of the assessee. The above issue is admittedly covered in favour of the assessee by the decision of the ITAT in the preceding years. We, therefore, do not find any merit in the grounds raised by the Revenue. All the grounds raised by the Revenue are dismissed.

In effect, appeal of the Revenue is dismissed.

In the combined result, all four appeals filed by the Revenue are dismissed.