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of <h1>Tribunal Partially Allows Assessee's Appeal, Remits Issues for Fresh Adjudication</h1> <h3>Knauf India Pvt. Ltd., (Earlier known as USG Boral Building Products (India) Pvt. Ltd.) Versus ITO, Ward-27 (2), New Delhi.</h3> Knauf India Pvt. Ltd., (Earlier known as USG Boral Building Products (India) Pvt. Ltd.) Versus ITO, Ward-27 (2), New Delhi. - TMI Issues Involved:1. Ad-hoc disallowance of various expenses.2. Disallowance of reversal of Cenvat credit.3. Disallowance of foreign exchange fluctuation loss.Summary:1. Ad-hoc Disallowance of Various Expenses:The assessee challenged the ad-hoc disallowance of 10% of total expenses amounting to INR 92,56,638 made by the AO, which was upheld by the CIT(A). The Tribunal noted that the impugned addition was made due to the assessee's failure to furnish supporting evidences. The assessee submitted additional evidences, which were admitted by the Tribunal. The Tribunal restored the issue to the AO for fresh adjudication, directing the AO to verify the correctness of the claim and decide the issue afresh after giving adequate opportunity of hearing to the assessee. Thus, Grounds Nos. 2 to 2.3 were allowed for statistical purposes.2. Disallowance of Reversal of Cenvat Credit:The CIT(A) had directed the AO to verify the nature of the Cenvat credit reversal amounting to INR 12,64,648, which was claimed to be actual Cenvat credit reversal and not penal in nature. The Tribunal found that the CIT(A) exceeded his jurisdiction by setting aside the issue for fresh adjudication, which is not within his powers under Section 251 of the Act. The Tribunal remitted the issue to the AO for verification of the correctness of the claim and directed that if found correct, the addition should be deleted. Grounds Nos. 3 to 3.1 were allowed for statistical purposes.3. Disallowance of Foreign Exchange Fluctuation Loss:The CIT(A) had set aside the issue of foreign exchange fluctuation loss amounting to INR 31,39,751 for fresh adjudication by the AO. The Tribunal held that the CIT(A) exceeded his jurisdiction by setting aside the issue. The Tribunal directed the AO to delete the addition, as the issue is covered by the judgment of the Hon'ble Supreme Court in the case of CIT vs. Woodward Governor India Private Limited (312 ITR 254) (2009). Grounds Nos. 4 to 4.1 were allowed for statistical purposes.Conclusion:The appeal of the assessee was partly allowed for statistical purposes. The Tribunal restored the issues related to ad-hoc disallowance and reversal of Cenvat credit to the AO for fresh adjudication and directed the AO to delete the addition related to foreign exchange fluctuation loss. The order was pronounced on 14th July, 2023.
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