2023 (10) TMI 269 - AT - Income Tax

Revenue's Appeals Dismissed: CIT(A) Decision Upheld, Post-NCLT Order Additions Deleted

The ACIT, Central Circle-1 (2), Ahmedabad Versus M/s. Pradip Overseas Ltd

The ACIT, Central Circle-1 (2), Ahmedabad Versus M/s. Pradip Overseas Ltd - TMI Issues:The judgment involves appeals filed by the Revenue against the order of the ld. Commissioner of Income Tax, CIT(A)-11, Ahmedabad, in proceedings u/s. 250 r.w.s. 144 r.w.s. 147 for the assessment years 2012-13 & 2013-14.ITA No. 543/Ahd/2022 A.Y. 2012-13:The grounds of appeal included the CIT(A) erred in deleting additions post order of NCLT, failed to appreciate Hon'ble Supreme Court order, and erred in deleting additions related to circular trading and inflated purchases. The AO's order was challenged.ITA No. 544/Ahd/2022 A.Y. 2013-14:Similar issues were raised as in ITA No. 543, with additional challenges regarding additions made on Income from House Property, u/s 68 of the Act, and u/s 69C of the Act. The CIT(A) was criticized for not upholding the AO's order.ITA No. 545/Ahd/2022 A.Y. 2013-14:Issues were akin to the previous appeals, with additional concerns about the deletion of an addition made u/s 68 of the Act as unexplained income. The CIT(A) was faulted for not supporting the AO's decision.The assessee contended that the Income Tax Settlement Commission's final order settled the matter, making the assessment conclusive and barring the AO from reopening it. The AO's additions were based on circular inflated purchases, contested by the assessee.The CIT(A) partially allowed the assessee's appeal, prompting the Revenue to challenge the decision. The Department argued that the additions should not have been deleted post NCLT order, citing relevant legal precedents.The authorized representative emphasized that NCLT's order approving the resolution plan extinguished all dues, including those not part of the plan. Legal cases were cited to support this argument, asserting that the CIT(A) rightly deleted the additions.After hearing both parties, it was concluded that the NCLT's order extinguishing dues and the Settlement Commission's finality on assessments prevented the AO from reopening the matter. The CIT(A)'s decision to delete the additions was upheld, leading to the dismissal of all three appeals filed by the Revenue.In conclusion, all three appeals filed by the Revenue were dismissed based on the binding nature of the NCLT and Settlement Commission orders, preventing the AO from revisiting the assessments.