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Income Tax Appellate Tribunal, RAJKOT BENCH,
Before: SHRI WASEEM AHMED & SHRI SIDDHARTHA NAUTIYAL
BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER आयकरअपीलसं./ITA Nos. 262 & 263/RJT/2022 (धििाधरणवरध/Assessment Years : 2007-08 & 2008-09 re s p e c t i v e l y) The ACIT, M/s. Friends Bulk Handlers Ltd. बिाम/ Gandhidham Circle, Maitri Bhavan, Plot No.18 Vs. Gandhidham-Kutch Sector-8, Gandhidham Kutch - 370201 PAN : AAACF8951G स्ायीलेखासं./जीआइआरसं./PAN/GIR No. : .. (अपीला््/Appellant) (प्य््/ Respondent) Shri K.C. Thacker, AR अपीला््ओरसे/ Appellant by : Shri V.J. Boricha, Sr.DR प्य््कीओरसे/Respondent by: 04/10/2023 सुिवाईकीतारीख/ Date of Hearing 08/ 11 /2023 घोरणाकीतारीख/Date of Pronouncement आदेश/ O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The present two appeals are directed at the instance of the Revenue against two separate orders of the ld. Commissioner of Income Tax (Appeals) [CIT(A) in short], [NFAC-Delhi], both dated 13/09/2022 passed for the Assessment Years (AYs) 2007-08 & 2008-09 respectively.
Since the issues are inter-connected, both these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. & 263/RJT/2022 ACIT vs. M/s.Friends Bulk Handlers Ltd. Asst.Years – 2007-08 & 2008-09 respectively - 2 - First, we take up the appeal in AY 2007-08.
In this case, the assessee filed the return of income declaring an income of Rs. 5,08,546/- DATED 23/10/2007 which was accepted in the assessment framed u/s 143(3) of the IT Act, 1961 (hereinafter called as “the Act”) vide order dated 10/12/2009. Thereafter, a search was conducted u/s 132 of the Act at the premises of the assessee. Accordingly, the proceedings u/s 153A of the Act were initiated and the assessment u/s 143(3) r.w.s. 153A(1)(b) of the Act vide order dated 28/03/2014, at the returned income, was framed. Subsequently, the proceedings u/s 263 of the Act were initiated to revise the assessment order framed u/s 143(3) r.w.s. 153A(1)(b) of the Act. Finally, the Ld. Pr. CIT in the order dated 29/02/2016 cancelled the assessment framed by the Assessing Officer u/s 143(3) rws 153A(1)(b) of the Act and directed to make a fresh assessment as per the provisions of law after giving reasonable opportunity of being heard to the assessee.
3.1. In consequence to the directions issued by the order of Ld. Pr. CIT u/s 263 of the Act, the Assessing Officer framed the assessment dated 30/12/2016 after making the following additions: Add: (i) Addition u/s 14A of the Act .. Rs.64,83,796/- (ii) Disallowance of foreign exchange rate difference .. Rs. 2,97,796/- 4. Aggrieved assessee carried the matter to the Ld. CIT(A) who found that the order passed by the Ld. PCIT u/s 263 of the Act has been quashed by the ITAT in & 154/Rjt/2016 dated 25/03/2022. Accordingly, the Ld. CIT(A) was of the view that once the foundation, based on which the additions made by the Assessing Officer have been quashed, there cannot be any disallowance in the consequential order. The relevant finding of the ld. CIT(A) is reproduced as under: & 263/RJT/2022 ACIT vs. M/s.Friends Bulk Handlers Ltd. Asst.Years – 2007-08 & 2008-09 respectively - 3 - “5.5. As seen from the above, it is amply clear that the revision order passed by the PCIT u/s.263 of the Act dated 29.02.2016 (supra), based on which the AO framed the impugned consequential order u/s.143(3) rws 263 of the Act dated 30.12.2016, has been quashed by the Hon’ble ITAT, Rajkot Bench. Accordingly, as a natural corollary, the impugned consequential order passed by the AO u/s.143(3) rws 263 of the Act 9supra), wherein the AO made an aggregate addition of Rs.67,81,592/- has no legs to stand. Therefore, I am of the considered option that the impugned addition made by the AO of Rs.67,81,592/- cannot be sustained in the yes of the law.” 5.6. Subject to above discussion and observations, the AO is directed to delete the impugned addition made of Rs.67,81,592/-. Thus, the grounds of appeal raised by the assessee are treated as allowed.”
5. Being aggrieved, the Revenue is in appeal before us. Both the ld. DR and the ld.AR before us vehemently supported the orders of the authorities below as applicable to them.
We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the Assessing Officer has made the addition in consequence to the direction issued by the ld. PCIT u/s 263 of the Act which have been quashed by the ITAT in & 154/Rjt/2016 vide order dated 25/03/2022. The above findings of the ld. CIT(A) have not been controverted by the ld. DR appearing on behalf of the Revenue. In view of the above, we hold that once the foundation, based on which the additions were made by the Assessing Officer have been quashed, the question of making any other addition, as discussed above, does not arise. Thus, we do not find any infirmity in the order passed by the ld. CIT(A). The same is hereby upheld. Hence, grounds of appeal raised by the Revenue are dismissed.
6.1 In the result, the appeal of the Revenue is dismissed. Now, we take up the Revenue’s appeal in for AY 2008-09
We find that the captioned appeal of the Revenue is identical to the facts of the AY 2007-8 (supra). In view of the pari-materia facts & 263/RJT/2022 ACIT vs. M/s.Friends Bulk Handlers Ltd. Asst.Years – 2007-08 & 2008-09 respectively - 4 - concerning the identical issue, our decision in Revenue for AY 2008-09.
As a result, the appeal of the Revenue in for AY 2008-09 is hereby dismissed.
In the combined result, both the appeals of the Revenue are dismissed. This Order pronounced in Open Court on 08/ 11 /2023