TaxTMI 
TaxTMI 
2022 (12) TMI 1129
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....ainst the order dated 28.03.2022 passed by the Income Tax Appellate Tribunal "B" Bench Kolkata in ITA No. 1501/Kol/2021 for the assessment year 2016-2017. 2. The revenue has raised the following substantial questions of law for consideration:- (i) Whether the Learned Tribunal is justified in setting aside the order under Section 263 of the said Act passed on the ground that the Assessing Officer had already conducted enquiry on the issues on which the order under Section 263 of the Income Tax Act, 1961 was passed, when the order of Assessing Officer is erroneous and bases on non application of mind as well as against the provisions of law and when no such embargo has been put in the language of the section that when the Assessin....
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....to such notices and the queries which were raised the assessee submitted documents and on certain discrepancies which were found the assessing officer issued show cause notice dated 23.12.2018 for which reply was submitted by the assessee on 26.12.2018 after which the assessment was completed by order dated 30.12.2018 under Section 143(3) of the Act. The Principal Commissioner of Income Tax, Calcutta (PCIT) issued the show cause notice dated 15.03.2021 under Section 263 of the Act. Pointing out two issues:- (i) That in the Schedule 19 of TAR, the assessee debited an amount of Rs. 21,95,56,764/- to the profit and loss account however the amount admissible under Section 35 of the Act is only Rs. 20,61,11,598/- and in the computation ....
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.... excess sum has been added back to the total income the assessment was completed under Section 143(3) of the Act. Further it was pointed out that in the notice dated 08.10.2018 issued under Section 142(1) of the Act specific details were called for on the said issue which was furnished by the assessee by the letters dated 20.11.2018 and 03.12.2018. It was further stated that the assessing officer examined the details of scientific research expenditure as claimed as deduction vis-a-vis the amount debited to profit and loss account including depreciation debited in books in relation to scientific research assets. Thereafter, another show cause notice was issued on 23.12.2018 requiring the assessee to explain as to why the excess deduction cla....
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....t came to the conclusion that the assessing officer has passed the assessment order without making enquiries or verification and therefore clause (a) of explanation (2) to Section 263 (1) of the Act is attracted and accordingly held the assessment order to be erroneous in so far as it is prejudicial to the interest of revenue. After referring to a few decisions the PCIT by order dated 27.03.2021 set aside the assessment order and directed the assessing officer to pass a fresh assessment order after considering the two issues which were pointed out. Aggrieved by such order, the assessee preferred appeal before the tribunal which has been allowed by the impugned order. 9. Firstly, we need to point out that the both the issues on which the ....
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....epreciation on SR Assets 94,90,862 C. SR Asset written off 39,81,203 D. Loss on sale of SR Assets 4295 E. Profit on sale of SR Assets (-) 31,194 F. TOTAL 21,95,56,764 G. Amount allowable u/s 35 [Sch 19 of TAR] 20,61,11,598 H. Difference [B+C+D+E] 1,34,45,166 *SR= Scientific Research *FS=Financial Statements Items B,C,D & E were debited under the respective Heads viz., Depreciation, Assets Written off, Profit/Loss on Sale of Assets. 11. The assessee also furnished the relevant extracts of the financial statement for the financial year 2015-2016 highlighting all the relevant details. Further the location wise break up of those items of expenses as reflected in th....
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...."LINKED IN" towards advertisement expenses in June 2014 were admitted as liability and crystallized for payment in the year under consideration owing to the fact that the "LINKED IN" being non-resident had furnished the necessary documents in the such as TRC under Section 90(4) of the Act read with Rule 21 AB of the Rules and no PE certificate etc. only in the assessment year under consideration. Further the tribunal noted it is not the case where these expenses were charged as deduction in the preceding year more importantly, the tribunal noted that there is no revenue implication and no prejudice is caused to the revenue since the tax rate applicable to the assessee during the assessment year 2015-2016 to which invoices relates and the ta....