2022 (9) TMI 1241 - AT - Income Tax

Tribunal allows appeals, directs fresh adjudication for assessment years 2012-15

The Tribunal allowed the appeals for the assessment years 2012-13, 2013-14, and 2014-15 for statistical purposes. It directed the CIT(A) to admit ... Capital gain computation - assessee company had acquired the business of two companies on slump sale basis without assigning any values to individual assets or liabilities - AO has taken the value of assets of the two companies that were taken over by the assessee at the WDV of the assets as on 31.03.2007 on the ground that the copy of the audited financial statements of M/s. Ferico Laboratories Pvt.Ltd. was not submitted and the assessee has not filed any valuation report - HELD THAT:- The appeal for the AY 2008-09 is still pending before the ld.CIT(A) for adjudication. The outcome of the appeal for the AY 2008-09 in our opinion will have a bearing on the out come of this appeal. Since the appeal for AY 2008-09 is still pending before the ld.CIT(A) and the ld.CIT(A) has passed a very cryptic order, therefore, considering the totality of the facts of the case and in interest of justice, we deem it proper to restore the issue to the file of the ld.CIT(A) with a direction to admit the additional evidences, which has got a bearing on the outcome of this appeal and decide the issue as per fact and law, after giving due opportunity of being heard to the assessee. While doing so, he shall also keep in mind how the valuation report dated 02.07.2007 was prepared when the separate business Transfer Agreements are dated 16.05.2007 and therefore, whether such valuation report is a colourable device/sham instrument and self serving document. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. Issues Involved1. Delay in filing appeals.2. Legality and jurisdiction of the assessment order.3. Addition of disallowed depreciation.4. Admission of additional evidence under Rule 46A.5. Adequacy of opportunity and right to personal hearing.6. Initiation of penalty proceedings under Section 271(1)(c).Detailed Analysis1. Delay in Filing AppealsThe assessee filed appeals with a delay of 84 days due to the COVID-19 pandemic. The Tribunal considered the condonation application and affidavit, and after hearing the Departmental Representative (DR), condoned the delay and admitted the appeals for adjudication.2. Legality and Jurisdiction of the Assessment OrderThe assessee contended that the assessment order dated 28.03.2015, passed under Section 143(3) of the Income Tax Act, 1961, and upheld by the National Faceless Appeal Centre (NFAC), was illegal, bad in law, and without jurisdiction. The Tribunal did not specifically address this issue in isolation but focused on the substantive matters of the case.3. Addition of Disallowed DepreciationThe AO disallowed depreciation of Rs. 1,66,42,682/- for AY 2012-13, Rs. 1,08,40,719/- for AY 2013-14, and Rs. 94,12,236/- for AY 2014-15, based on the valuation of assets acquired from two companies on a slump sale basis. The AO followed the order for AY 2008-09, where the value of assets was taken as per the Written Down Value (WDV) as on 31.03.2007. The assessee reworked the depreciation but the AO disallowed the excess claimed. The Tribunal noted that the appeal for AY 2008-09 was still pending and would have a bearing on the current appeals. Therefore, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication.4. Admission of Additional Evidence Under Rule 46AThe assessee filed additional evidence before the CIT(A), which was rejected on the grounds that it did not fall within the permissible categories under Rule 46A(1). The Tribunal found merit in the assessee's argument that the additional evidence was crucial and should have been admitted. The Tribunal directed the CIT(A) to admit the additional evidence and decide the issue afresh.5. Adequacy of Opportunity and Right to Personal HearingThe assessee argued that adequate and sufficient opportunity was not provided, and the right to a personal hearing was denied. The Tribunal agreed that the CIT(A) had passed a very cryptic order without giving detailed reasons. The Tribunal directed the CIT(A) to provide a detailed speaking order after giving due opportunity of being heard to the assessee.6. Initiation of Penalty Proceedings Under Section 271(1)(c)The assessee contended that the AO/NFAC initiated penalty proceedings under Section 271(1)(c) mechanically and without recording adequate satisfaction or reasons. The Tribunal did not specifically address this issue in isolation but focused on the substantive matters of the case.ConclusionThe Tribunal restored all issues to the file of the CIT(A) for fresh adjudication, directing the CIT(A) to admit the additional evidence and provide a detailed speaking order. The appeals for AY 2012-13, 2013-14, and 2014-15 were allowed for statistical purposes.