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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI N. K. BILLAIYA & MS SUCHITRA KAMBLE
This appeal is filed by the assessee against the order dated 14/02/2017 passed by CIT(A)-6, New Delhi for Assessment Year 2012-13.
The grounds of appeal are as under:-
“1. That without appreciating the facts of the case and in law, the Ld.CIT(A) erred in confirming the addition of Rs. 2,22,887/- on account of value of DEPB license. That it may be held that in the circumstances the assessee had correctly valued the DEPB licenses at the net estimated realizable value at 90% of the face value and the addition of Rs. 2,22,887/- be deleted.
2. That the CIT (A) has erred in confirming the following disallowances for personal use of the directors and employees of the assessee company without
any material basis, on ere surmises.
Amount (Rs.) a) Out of Telephone Expenses (10%) 45481 b) Out of Conveyance Local 53137 c) Out of Export Promotion (10%) 1056727 1155345 That the additions being contrary to provisions of law be deleted.
The assessee company undertook turnkey projects in the conventional and unconventional energy like transmission lines, distribution networks, sub- stations, solar installations, bio mass based power generation etc. during the year under consideration. Return of income declaring total income of Rs. 8,48,87,410/- was filed on 26/09/2012 which was processed u/s 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny and notice u/s 143(2) and 142(1) along with detailed questionnaires were issued and served upon the assessee. In response thereto, Chartered Accountant and Authorized Representative of the assessee attended the proceedings from time to time and furnish the requisite details which were examined by the Assessing Officer. The Assessing Officer made additions on account of short provision of export incentive amounting to Rs. 2,22,887/- and made disallowance on account of element of personal expenses amounting to Rs. 11,55,345/-.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
None appeared on behalf of the assessee during the hearing. Therefore, we are taking up the submissions of the assessee before the CIT(A).
The Ld. DR relied upon the order of the assessment and order of the CIT(A). But during the hearing, the Ld. DR also submitted that for Assessment Year 2011-12 which was relied upon by the CIT(A) in the order, the same Assessment year has been decided by the Tribunal in favour of the assessee.
We have heard both the parties and perused the material available on record. As regards to Ground No. 1, it can be seen that no DEPB licenses were received during the year in respect of sales made during the year. The assessee is not a manufacturer and therefore, DEPB licence cannot be used, the same has to be sold in the open market to utilize the same. The estimated realizable value of DEPB licences receivable for exports during the year were provided at Rs. 20,05,978 and shown as miscellaneous income. From the records it can be seen that the each invoice details were filed by the assessee and the details of subsequent sales realization was also given. The total amount realized was only Rs. 10,15,988 against the provision of Rs. 20,05,978/-. The Assessing Officer wrongly treated the said amount as provision on estimated basis amounting to Rs. 2,22,887/-. Thus, the Ground No. 1 is allowed. As relates to Ground No. 2 the details of expenses were filed before the Assessing Officer by the assessee which was not taken into account by the Assessing Officer. Therefore, Ground No. 2 is allowed. Besides this, the issue has been decided in favour of the assessee in its own case for Assessment Year 2011-12 which was relied upon by the CIT(A). Therefore, the appeal of the assessee is allowed.