What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal as not maintainable due to the low tax effect. For the assessee's appeal, the Tribunal remitted the matter back to the Assessing Officer to allow the assessee one more opportunity to furnish details regarding preoperative expenses.

The Revenue appealed against the deletion of disallowance of bad debts, while the assessee appealed against the confirmation of addition of preoperative expenses. The Revenue's appeal was based on a tax effect below the monetary limit set by CBDT.

What were the issues?

Maintainability of Revenue's appeal due to monetary limit and the assessee's failure to furnish details for preoperative expenses.

Siechem Technologies P. Ltd. vs DCIT | ITAT Chennai 2018

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI A.MOHAN ALANKAMONY

Pronounced: 13.08.2018

Heard together (2 matters)

I.T.A.No.1732/Chny/2017

I.T.A.No.1887/Chny/2017

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / O R D E R

Per A. Mohan Alankamony, AM:-

The appeal by the Revenue and the assessee are directed against the order passed by the learned Commissioner of Income Tax (Appeals)-15, Chennai dated 27.06.2017 in ITA No.061/2015-

Revenue’s Appeal:- The Revenue has raised several grounds in its appeal however the crux of the issue is that the Ld.CIT(A) has erred in directing the Ld.AO to delete the disallowance made by the Ld.AO amounting to Rs.42,11,673/- towards bad debts.

Assessee’s Appeal:- The assessee has raised several grounds in its appeal however the crux of the issue is that the Ld.CIT(A) has erred in confirming the addition made by the Ld.AO amounting to Rs.1,47,95,439/- towards preoperative expenses.

The brief facts of the case are that the assessee is a private limited company engaged in the business of manufacturing copper and other cables, filed its return of income for the assessment year 2012-13 electronically on 29.09.2012 admitting total income of Rs.2,06,26,906/-. Initially the return was processed U/s.143(1) of the Act and subsequently the case was selected for scrutiny under and notice U/s.143(2) of the Act was issued on

Revenue’s Appeal: At the outset, the Ld.AR submitted before us that the above mentioned appeal is not maintainable due to the latest Circular No.3/2018 dated 11.07.2018 issued by the CBDT with respect to monetary limit. Hence, it was pleaded that the appeal of the Revenue may be dismissed. The Ld. DR could not controvert to the submission of the Ld.AR.

5.1. After hearing both sides we find merit in the submission of the Ld.AR. The CBDT has directed the Revenue not to file appeal before the Tribunal where the tax effect does not exceed Rs.20 lakhs. In the above mentioned appeal of the assessee the tax effect is less than Rs.20 lakhs. Therefore, we hereby dismiss the appeal filed by the Revenue as not maintainable. It is ordered accordingly

Assessee’s Appeal: During the course of scrutiny assessment proceedings it was observed by the Ld.AO that the assessee had written off

4 & 1887/Chny /2017 Rs.1,47,95,439/- as revenue expenditure, however on verification it was found that the expenditure pertains to preliminary and preoperative expenses. Therefore the Ld.AO disallowed the same as allowable expenditure and added back to the income of the assessee. On appeal the Ld.CIT(A) confirmed the order of Ld.AO because the assessee had not furnished the complete break-up of the expenditure with supporting documents claimed as deduction for Rs.1,47,95,439/-.

6.1 At the outset the Ld.AR pleaded that the matter may be remitted back to the file of Ld.AO, so that the assessee can furnish the requisite details and arrive at the appropriate conclusion. The Ld.DR strongly objected to the submission of the Ld.AR.

6.2 After hearing both sides, we do not find any merits in the arguments advanced by the Ld.AR. The assessee and its Ld.AR have grossly failed to furnish the details sought by the Revenue at the time of assessment proceedings as well as first appellate proceedings. This lethargic attitude of the assessee is not appreciable. However in the interest of justice, we hereby remit the matter back to the file of Ld.AO, thereby offering the assessee with one more opportunity to furnish the requisite materials to justify its 5 & 1887/Chny /2017 stand before the Revenue. We also caution the assessee to co- operate promptly before the Revenue in their proceedings failing which the Ld.Revenue Authorities are at liberty to pass appropriate orders in accordance with merit and law based on the materials on record.

In the result the appeal filed by the Revenue is dismissed and the appeal of the assessee is allowed for statistical purposes as indicated herein above.

Order pronounced on the 13th August, 2018 at Chennai.

SIECHEM TECHNOLOGIES P. LTD.,CHENNAI vs. DCIT CORPORATE CIRCLE 6(2), CHENNAI

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