VOSSLOH COGIFER SA,NEW DELHI vs. CIT INTERNATIONAL TAXATION-3 DELHI, DELHI

This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax-3 (hereinafter referred to CIT) 1 New Delhi, dated 23.03.2022 passed under section 263 of the Income Tax Act, 1961 (the Act) for assessment year 2017-18.

In this case the ld. CIT passed order under section 263 of the Act for the reason that the assessment order was passed without making enquiries or verification on the deemed export benefit as per foreign trade policy as the assessee has considered the eligibilities/availabilities of deemed benefits which is available to its domestic suppliers/subsidiaries Vossloh Beekay Casting Limited (VBCL) and Vossloh Cogifer Turnouts India Private Limited (VCTI) as an ascertained liability of the assessee for the assessment year 2017-18.

On hearing both the sides in so far as invocation of the provisions under section 263 of the Act are concerned in holding that the assessment order passed under section 143(3) on 19.12.2019 for the assessment year 2017-18 was erroneous and prejudicial to the interest of Revenue we agree with the ld. CIT that there was no adequate enquiry or examination as to whether the claim made by the assessee in respect of deemed export benefits as an ascertained liability for the assessment year under consideration was not examined. However, we find that the ld. CIT without giving any opportunity to the assessee to explain as to whether the liability is an ascertained liability for this year or not directed the Assessing Officer to disallow the claim of deemed export compensation which, in our view, is not correct. Therefore, we set aside the order of the ld. CIT in so far as the direction given to disallow the deemed export compensation.

In the result, appeal of the assessee is partly allowed for statistical purposes.