CURIA INDIA PRIVATE LIMITED(AFTER MERGER AMRI INDIA PRIVATE LIMITED),HYDERABAD vs. ACIT CIRCLE -1(1), HYDERABAD

There is a delay of ‘84’ days in filing of these appeals by the assessee for which assessee has filed a condonation application along with affidavit stating the reasons for delay in filing of the

The grounds raised by the assessee are as under:- 1. That, in view of the facts and circumstances of the case and in law, the impugned assessment order dated 28.03.2015 passed under Section 143(3) of the Income Tax Act, 1961 ("the Act") by the Assessing Officer ("the AO") as upheld by the National Faceless Appeal Centre ('"NFAC") vide order dated 13.12.2021 and also the addition made therein is illegal, bad in law, without jurisdiction and is liable to be quashed and deleted.

That, in view of the facts and circumstances of the case and in law, the AO/NFAC has erred in law and on facts, in making and upholding addition of Rs.1,66,42,682/- (reduced by the NFAC to Rs. 1,24,95,942/-). The said addition is illegal and bad in law and is liable to be set aside and deleted.

That, in view of the facts and circumstances of the case and in law, the AO/NFAC has erred in not appreciating that the said depreciation as claimed by the Assessee is justified and as such allowable under the provisions of the Act.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not admitting the application for additional evidence as filed by the Assessee under Rule 46A. As such the said rejection by the NFAC is illegal and bad in law.

That, in view of the facts and circumstances of the case and in law, the NFAC erred in not appreciating that the application for additional evidence goes to the root of the matter and has a direct bearing on the outcome of the present proceedings. Hence, in the interest of justice, the application for additional evidence ought to have been admitted.

That, in view of the facts and circumstances of the case and in law, the evidences filed and materials available on record has not been properly construed and has not been judiciously interpreted.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not passing a speaking order on the merits of the case. The order of the NFAC dated 13.12.2021 is against the provisions of law.

Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacture and marketing of active pharmaceutical ingredients and other pharmaceutical intermediates. It filed its return of income on 29.09.2012 declaring loss at Rs.8,17,73,799/-. The case was selected for scrutiny and statutory notices u/s143(2) and 142(1) were issued to the assessee. In response to the same, the ld. AR of the assessee appeared before the AO from time to time and made submissions as called for by the AO. During the course of assessment proceedings, the AO noted that assessee has shown revenue from operations at Rs.17,98,27,285/- and other income of Rs.1,18,49,235/- and net loss at Rs.6,14,94,116/-. He noted that in the previous year 2007-08, the assessee company had acquired the business of two companies, namely (a) M/s. Arine Orgachem Pvt.Ltd.(b) M/s. Ferico Laboratories Ltd on slump sale basis without assigning any values to individual assets or liabilities. He noted that during the assessment proceedings for AY 2008-09 it was seen that the total consideration paid was Rs.40,42,54,876/- in respect of M/s. Ariance Orgachem Pvt.Ltd. and Rs.4,51,30,163/- in respect of M/s. Ferico Laboratories Ltd. and the assessee has apportioned the total consideration received to various assets as under:-

After considering the depreciation allowable and actual cost of the assets in the case of the assessee, the AO noted that depreciation allowable to the assessee was worked out at Rs.182,14,736/- as against Rs.4,04,54,827/- in respect of acquired assets for AY 2008-09. Accordingly depreciation to the tune of Rs.2,22,40,091/- was disallowed. Since the above issue has impact on the WDV of fixed assets as well as the depreciation allowable for the year under consideration, i.e. AY 2012-13, the assessee was required to work out the WDV of fixed assets as well as the depreciation having regard to the findings given in the order u/s. 143(3) passed for AY 2008-09. In response to the same,

Before the ld.CIT(A), the assessee filed certain additional evidences. However the ld.CIT(A) rejected the additional evidences on the ground that the case of the assessee does not fall within any of the four points of sub-section (1)(a) to (1)(d) of Rule 46(A)(1). So far as the merit of the case is concerned, the ld.CIT(A) held that the reasons given by the AO in the assessment order for AY 2014-15 and invoking of Explanation 3 to section 43(1) and assuming the value of fixed assets as WDV appearing in the books of the previous owner on the date of acquisition is correct. He accordingly rejected the claim of the assessee.

Aggrieved with such order of the ld.CIT(A), the assessee is in appeal before the Tribunal.

The ld. Counsel for the assessee relying on a series of decisions submitted that the additional evidences filed before the ld.CIT(A) go to the root of the matter and therefore, the ld.CIT(A) was not justified in rejecting the additional evidences filed before him. For the above proposition, the ld. Counsel for the assessee relied on the following decisions:-

Referring to the following decisions, the ld. Counsel for the assessee submitted that the ld.CIT(A) has to pass a speaking order while deciding the appeal and since in the instant case, he has passed a very cryptic order, the same should be set aside to his file for passing a detailed speaking order.

The ld. DR on the other hand heavily relied on the order of the AO and ld.CIT(A). Referring to the decision of the Mumbai Bench of the Tribunal in the case of ITO vs. M/s. Archroma India(P) Ltd. and vice versa vide ITA No.306/Mum/2019 & ITA No.6919/Mum/2018 order dated 15.06.2020 for AY 2014-15 he submitted that the disallowances of depreciation by the AO is in

We have heard the rival arguments made by both the sides, perused the orders of the AO and ld.CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case, following the order of AY 2008-09 noted that actual depreciation allowable to the assessee is only at Rs.193,47,324/- as against Rs.2,93,54,593/- claimed in respect of assets acquired during AY 2008-09 and accordingly made addition of Rs.1,66,42,682/-. We find the ld.CIT(A) upheld the action of the AO by rejecting the additional evidences filed before him. It is the submission of the ld. Counsel for the assessee that when the order for AY 2008-09 and 2010-11 are still pending before the ld.CIT(A) for adjudication and the AO has not made any disallowance during AY 2009-10 and 2011-12, therefore, appeals for AY 2008-09 and 2010-11 has got a bearing on the outcome of the current year. It is also her submission that the additional evidences filed before the ld.CIT(A) go to the root of the matter and the ld.CIT(A) without admitting the same should not have rejected the additional evidences. It is also her submission that the ld. CIT(A) has passed a very cryptic order without giving the reason for the decision.

We find some force in the above arguments of the ld. counsel for the assessee. It is an admitted fact that for the AY 2008-09, the AO has taken the value of assets of the two companies that were taken over by the assessee at the WDV of the assets as on 31.03.2007 on the ground that the copy of the audited financial

The grounds raised by the assessee are as under:-

That, in view of the facts and circumstances of the case and in law, the impugned assessment order dated 28.03.2015 passed under Section 143(3) of the Income Tax Act, 1961 ("the Act") by the Assessing Officer ("the AO") as upheld by the National Faceless Appeal Centre ('"NFAC") vide order dated 13.12.2021 and also the addition made therein is illegal, bad in law, without jurisdiction and is liable to be quashed and deleted. 2. That, in view of the facts and circumstances of the case and in law, the AO/NFAC has erred in law and on facts, in making and upholding addition of Rs.1,08,40,719/- The said addition is illegal and bad in law and is liable to be set aside and deleted.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not admitting the application for additional evidence as filed by the Assessee under Rule 46A. As such the said rejection by the NFAC is illegal and bad in law.

That, in view of the facts and circumstances of the case and in law, the NFAC erred in not appreciating that the application for additional evidence goes to the root of the matter and has a direct bearing on the outcome of the present proceedings. Hence, in the interest of justice, the application for additional evidence ought to have been admitted.

That, in view of the facts and circumstances of the case and in law, the evidences filed and materials available on record has not been properly construed and has not been judiciously interpreted.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not passing a speaking order on the merits of the case. The order of the NFAC dated 13.12.2021 is against the provisions of law.

That, in view of the facts and circumstances of the case and in law, the AO/NFAC erred in not providing adequate and sufficient opportunity to the Assessee.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not providing right of personal hearing to the Assessee.

That, in view of the facts and circumstances of the case and in law, the observation and the addition made are unjust, illegal, arbitrary, bad in law, highly excessive and based on surmises and conjectures.

That, in view of the facts and circumstances of the case and in law, the AO/NFAC has erred in initiating penalty proceedings under Section 271(1)(c) of the Act mechanically and without recording any adequate satisfaction/reasons.

The grounds raised by the assessee are as under:- 1. That, in view of the facts and circumstances of the case and in law, the impugned assessment order dated 28.12.2016 passed under Section 143(3) of the Income Tax Act, 1961 ("the Act") by the Assessing Officer ("the AO") as upheld by the National Faceless Appeal Centre ('"NFAC")

That, in view of the facts and circumstances of the case and in law, the AO/NFAC has erred in law and on facts, in making and upholding addition of Rs.94,12,236/- .The said addition is illegal and bad in law and is liable to be set aside and deleted.

That, in view of the facts and circumstances of the case and in law, the AO/NFAC has erred in not appreciating that the said depreciation as claimed by the Assessee is justified and as such allowable under the provisions of the Act.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not admitting the application for additional evidence as filed by the Assessee under Rule 46A. As such the said rejection by the NFAC is illegal and bad in law.

That, in view of the facts and circumstances of the case and in law, the NFAC erred in not appreciating that the application for additional evidence goes to the root of the matter and has a direct bearing on the outcome of the present proceedings. Hence, in the interest of justice, the application for additional evidence ought to have been admitted.

That, in view of the facts and circumstances of the case and in law, the evidences filed and materials available on record has not been properly construed and has not been judiciously interpreted.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not passing a speaking order on the merits of the case. The order of the NFAC dated 13.12.2021 is against the provisions of law.

That, in view of the facts and circumstances of the case and in law, the AO/NFAC erred in not providing adequate and sufficient opportunity to the Assessee.

That, in view of the facts and circumstances of the case and in law, the NFAC has erred in not providing right of personal hearing to the Assessee.

That, in view of the facts and circumstances of the case and in law, the observation and the addition made are unjust, illegal, arbitrary, bad in law, highly excessive and based on surmises and conjectures.

That, in view of the facts and circumstances of the case and in law, the AO/NFAC has erred in initiating penalty proceedings under Section 271(1)(c) of the Act mechanically and without recording any adequate satisfaction/reasons.

In the result, all the three appeals filed by the assessee are allowed for statistical purposes.