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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
Before: SHRI KULDIP SINGH & Dr. B.R.R. KUMAR
ASSESSEE BY : Sh. Sh. M.P.Rastogi, Adv. REVENUE BY : Shri Saras Kumar, Sr. DR Date of Hearing : 20.01.2020 Date of Order : 31.01.2020
O R D E R
PER KULDIP SINGH, JUDICIAL MEMBER :
The appellant, M/s. Simplex Engineering & Foundry Works Pvt. Ltd., New Delhi (hereinafter referred to as 'the assessee’) by filing the aforesaid appeal, sought to set aside the impugned order dated 01/09/2016 passed by Ld. Commissioner of Income Tax(Appeals)-22, New Delhi qua the Assessment Year 2012-13 on the grounds inter alia that:
“1) That the disallowance of Rs.48,95,000/- being the amount of interest on Export Packing Credit
Loan u/s 40(a)(ia) of the Income-tax Act, 1961 (the Act), wrongly mentioned by the Auditors as machinery repair charges but later on corrected by way of certificate, as sustained by the CIT (Appeals), is arbitrary, unjust and bad in law. 2) That the CIT (Appeals) has co-terminus power as that of the Assessing Officer and hence the disallowance by CIT (Appeals) of Rs.48,95,000/- claimed as interest on Export Packing Credit Loan in appeal instead of machinery repair mentioned by the Auditors in their report by making observation that “any mistake in the audited accounts and the return filed is to be rectified by filing a revised audit report and revised return” is arbitrary, unjust and bad in law. 3) That the CIT (Appeals) ought to have examined the allowability of claim of Rs.48,95,000/- being the interest paid on Export Packing Credit Loan in accordance with the provisions of the Act and accordingly the disallowance thereof on the ground “that audit report and annual accounts are the basis for assessment and mere submission of the appellant during the course of appeal proceedings, that the Auditors committed mistake, cannot be accepted without a re-audit of the books of accounts”, is arbitrary, unjust and bad in law. 4) The above grounds of appeal are independent and without prejudice to one another. Your Appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal at the time of hearing.”
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee company is into manufacturing of equipment and machinery etc. on order basis for various industries like Steel, Power, Cement, Heavy Engineering and Petroleum. The assessee company also worked on the turned key project for steel plants. The Assessing Officer made an addition of Rs. 48,95,000/- by way of making disallowance u/s 40 (a)(ia). On the ground that the assessee has paid an amount of Rs. 48.95 lakh towards the machinery repairing without deducting and paying tax on these amount and thereby framed the assessment u/s 143(3) of the Act.
3. Assessee carried the matter before Ld. CIT(A) who has partly allowed the appeal. Feeling aggrieved the assessee has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
At the very outset, Ld. AR for the assessee contended that during the appellate proceedings for Ld. CIT(A) it was submitted that there was error in the audited accounts and this amount was not machinery repairing charges rather it was claimed to be interest on export packing credit loan and has filed the auditor’s certificate dated 22.06.2016 to support its contention.