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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI SANDEEP GOSAIN, JM
O R D E R Per Shamim Yahya, A. M.: This Appeal by the Revenue and cross objection by the assessee arises out of the Order of the Commissioner of Income Tax (Appeals), Mumbai (‘CIT(A)’ for short) dated 23.02.2015 and pertains to the assessment year (A.Y.) 2004-05.
2 & CO. No. 24/M/2017 Bayer Croopsciences Ltd. 2. The grounds raised in Revenue’s appeal read as under:
1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that the assessment completed u/s. 147 is bad in law.
On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that the assessment completed u/s. 147 is bad in law without taking into consideration that if a single valid reason is available for re- opening the assessment u/s. 147, the assessment is valid.
The grounds raised in the assessee’s cross objection read as under:
CO No.1: Addition of dividend income 1.1. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeal) ('CIT(A)') erred in not adjudicating ground number 2 of the appeal before him which pertained to addition of Rs.18,55,543 in respect of dividend income.
1.2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in not appreciating the fact that the said dividend income is exempt under Section 10(34) of the Income-tax Act, 1961 ('Act').
CO No. 2: Addition of Book Profit on sale of Unit Scheme 64: 2.1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in not adjudicating ground number 3 of the appeal before him which pertained to addition of Rs. 6,22,000 in respect of book profit on sale of Unit Scheme 64.
CO No. 3: Addition of Reversed Provision for Pension: 3.1. On the facts and in the circumstances of the case and in law, die Learned CIT(A) erred in not adjudicating ground number 4 of the appeal before him which pertained to addition of Rs. 54,03,480 in respect of reversal of provision for pension. 3.2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred not appreciating the fact that the related provision has already been disallowed by the Assessee in the earlier years.
CO No. 4: Disallowance of Restructuring Cost: 4.1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in not adjudicating ground number 5 of the appeal before
3 & CO. No. 24/M/2017 Bayer Croopsciences Ltd. him which pertained to disallowance of addition of Rs.80,97,600 in respect of restructuring cost for amalgamation. 4.2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred not appreciating the fact that a rectification application under section 154 of the Act was pending before the AO with respect to the restructuring cost for amalgamation.
CO No.5: Levy of Interest: 5. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in upholding the action of the A.O. in levying interest under Section 234B, 234D and Section 220 of the Act.
The issue raised in the Revenue’s appeal and the issue raised in cross objection read as under:
In this case the assessment was reopened as assessment framed u/s. 143 r/w s.
147 of the Act. In the above assessment order, the Assessing Officer added the following:
Computation of Total Income: Total income as per order dated 30.03.2011 u/s. 154 100,15,30,306 Add: Dividend income (Para 4.2) 18,55,543 Profit on sale of US 64 (Para 5.2) 6,22,000 Pension Provision (Para 5.3) 54,03,480 Professional fees in excess of 35DD (Para 6.2) 80,97,600 1,59,78,623 Total Income 101,75,08,929
Against the above order, the assessee appealed before the ld. CIT(A) challenging both the validity of the reopening and the merits of the addition. The ld. CIT(A) in his appellate order quashed the reopening holding the same to be bad and not valid. The ld. CIT(A) declined to go into the merits of the grounds raised before him and did not adjudicate the same. challenging the order of ld. CIT(A) holding the reopening as invalid. The assessee has filed cross objection challenging that the ld. CIT(A) has erred in not adjudicating the grounds on merits raised before him.
7. Upon careful consideration, we note that the ld. CIT(A) has only adjudicated the issue of reopening and has not adjudicated the issue on merits.
Against this, the assessee has filed cross objection that the ld. CIT(A) should have adjudicated the grounds on merits duly raised before him. We find that the grounds raised on merits were duly raised before the ld. CIT(A), but he has not adjudicated the same. Higher courts have held that lower authorities should adjudicate on all the aspects appealed before them and complete their order for proper appreciation of the issues at the higher appellate level. Hence, we are of the opinion that the ld. CIT(A) needs to adjudicate on the merits of the issues raised before him in order to make his appellate order complete. Accordingly, we remit the issue on merits raised in the cross objection by the assessee which were also before the file of ld. CIT(A) to the file of ld. CIT(A). The ld. CIT(A) is directed to consider the issue on merits and pass a speaking order on the same. Needless to add, the assessee should be granted adequate opportunity of being heard. We make it clear that we have not considered the issue on the validity of reopening in any manner whatsoever. Both the 5 & CO. No. 24/M/2017 Bayer Croopsciences Ltd. party is free to raise the necessary issues as desired after the order of the ld. CIT(A) is complete in terms of our remitting as above.
In the result, the appeal filed by the Revenue and the cross objection filed by the assessee stands allowed for statistical purposes. Order pronounced in the open court on 07.11.2017
Sd/- Sd/- (Sandeep Gosain) (Shamim Yahya) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 07.11.2017 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,