M/S. ORIENT CERAMIC AND INDUSTRIES LTD.,NEW DELHI vs. ADDL. CIT, NEW DELHI

Assessee by : Sh. Manoj Kumar, CA Revenue by: None Date of Hearing 23/06/2016 Date of pronouncement 28/06/2016 O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(A)- XVI, New Delhi dated 24/12/2013 for the Assessment Year 2009-10. The assessee has raised the following grounds of appeal:- 2. “1. That the impugned order passed by the Ld. CIT (A) u/s 250 of the Indian Income Tax Act is without appreciating the true and correct facts of the case of the appellant company namely M/s Orient Ceramic and Industries Limited now known as M/s Orient Bell Limited.

2. That the impugned order has been passed without affording an opportunity to be heard to the assessee and against the principle of audi aultrum pardon and hence pardoned by law.

3. That the CIT(A) has grossly erred in upholding the disallowance made by the ld A.O with respect to write off of claim of Duty Draw Back although the same has become irrevocable during the year under consideration and has further grossly erred in drawing as adverse inference of the order of the Assistant Commissioner (DBK) which was passed in January 2010 rejecting the claim of the appellant for duty drawback, was applicable only for Ass. Yr. 2010-11.

4. That Ld. CIT (A)-XVI, New Delhi has grossly erred in confirming the disallowance made by the Assessing Officer to disallow expenses incurred on writing-off," Duty Draw Back", amounting to Rs. 32,28,924/-.

5. That Ld. CIT (A)-XVI, New Delhi has grossly erred in not appreciating the fact that Duty Draw Back, amount was already included in the taxable income of the appellant company during the Financial Year 2002- 2003 and appellant had already paid the applicable taxes thereon, (erroneously mentioned as Financial Year 2001-2002) which has Page 2 of 4 now been written-off, being the same is not legally enforceable from the Custom Department by the Appellant Company.

6. That Ld. CIT (A)-XVI, New Delhi has gross erred in not appreciating the fact that Custom Department had never accepted the claim of the appellant company of Duty Draw Back amounting to Rs. 32,28,924/- and the amount had become irrecoverable during the year under consideration.

7. That Ld. CIT (A)-XVI, New Delhi has grossly erred in ignoring the submissions made by the appellant company that the amount of Duty Draw Back has been written off from the books of account as the same could not be enforced legally from the Custom Department.

8. That Ld. CIT (A)-XVI, New Delhi has grossly erred in ignoring the submissions made by the appellant company that the amount of Duty Drawback has been written off from the books of account on the advice of legal department, Statutory Auditors of the appellant company, and the Affidavit filed by the appellant company during course of proceedings.

9. That Ld. CIT (A)-XVI, New Delhi has grossly erred in not appreciating the fact that an affidavit was also submitted in this respect that the appellant company is not pursuing this claim from the Custom Department as the same is not legally enforceable and has been written off from the books of accounts.

10. That Ld. CIT (A)-XVI, New Delhi has grossly erred in not appreciating the fact that the appellant company does not hold any right to contest the claim of the duty draw back as the same has been written off only for the reason that the same is not legally enforceable from the customer department. “

, however, the brief facts are as under:- The appellant is a company engaged in manufacturing glazed tiles and filed its return of income on 30th September 2009 showing income of Rs. 107719777/-. During the course of assessment proceedings the ld Assessing Officer has disallowed duty draw back written off and made an addition of Rs. 3228924/-. The main reason for disallowance was that claim for rejection of duty drawback was passed by the authority in January 2010 relevant to AY 2010-11 and therefore assessee cannot be permitted to write it off in AY 2009-10. The appeal was preferred before the ld CIT(A), who in turn confirmed the disallowance of write off therefore the assessee is in appeal before us.

4. Before us though assessee has raised several grounds, however, we take ground No. 4 of the appeal which is the crux of the appeal.

5. Before us the ld AR submitted that duty drawback is income derived from the export business and same were accounted for as income in AY