1 ITA NO. 4447/Del/2019
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `I(2) + SMC' NEW DELHI
BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER,
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA No. 4447/DEL/2019 ( A.Y 2014-15)
Flaktgroup India Pvt. Ltd. Vs ACIT
A-1, FF, FIEE Complex, Near C Lal Circle-9(1)
Chowk, Okhla Industrial Area, C. R. Building, I.P. Estate
New Delhi New Delhi
AACCF020ID
(APPELLANT) (RESPONDENT)
Appellant by None
Respondent by Sh. Pradeep Singh Gautam,
Sr. DR
Date of Hearing 04.03.2020
Date of Pronouncement 19.03.2020
ORDER
PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order dated 15/03/2019
passed by CIT(A)- 34 for Assessment Year 2014-15.
2. The grounds of appeal are as under:-
" 1. That on the facts and circumstances of the case, the order
dated as 02.11.2016 passed by the Asst. Commissioner of Income-tax, Circle-
9(1),New Delhi [hereinafter referred to as "the Ld. A.O."] under section 143(3)
of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] and as upheld
by the Ld. Commissioner of Income-tax (Appeals) -34, New Delhi [hereinafter
referred to as "the CIT(A)"] is bad at law and void ab initio.
2. That on the facts and in circumstances of the case, the Ld. CIT(A) erred in
2 ITA NO. 4447/Del/2019
upholding the disallowance to the tune of Rs. 55,69,690/ out of contractual
services expenses being contingent in nature and disallowed under the
provision of section 40(a)(ia) of the Act.
3. That on the facts and in circumstances of the case, the Ld. CIT(A) erred in
upholding the disallowance of restructuring expenses of Rs. 1,07,75,000/
under section 37 of the Act.
4.1. That on the facts and in circumstances of the case, the Ld. CIT(A)
erred in upholding the disallowance of provision of warranty cost of Rs.
26,65,716 being contingent in nature.
4.2 That on the facts and in circumstances of the case, the Ld.CIT(A)
erred in upholding the disallowance of provision of warranty cost of Rs.
26,65,716/- being contingent in nature.
5.1 All the above mentioned grounds are independent and without
prejudice to other; and
5.2. That the appellant carves the right to add, alter, amend and delete
the ground(s) of appeal during hearing.
3. The assessee company is engaged in the business of manufacturing and
sale of Air treatment equipment and particularly air handling units. The
company is also engaged in the business of system solution being operated
form Kolkata office. Return declaring total loss of Rs.1,64,64,017/- was filed
on 28/11/2014. The Assessing Officer completed the assessment u/s 143(3)
vide order dated 2/11/2016 after making addition on account of contractual
service expenses at Rs. 55,69,690/-, restricting expenses Rs. 1,07,75,000/-
and disallowance of provision on account of liquidated damages and warranty
cost at Rs.41,78,951/-.
4. Being aggrieved by the assessment order, the assessee filed appeal before
the CIT(A). The CIT(A) dismissed the appeal of the assessee.
3 ITA NO. 4447/Del/2019
5. None appeared on behalf of the assessee and there is no adjournment
application on behalf of the assessee. The notice has been served to the
assessee. Therefore, we are taking up the submissions of the assessee before
the CIT(A) as well as before the Assessing Officer.
6. The Ld. DR relied upon the assessment order and the order of the CIT(A).
7. We have heard the Ld. DR and perused the material available on record.
From the order of the Assessing Officer as well as the CIT(A) it is pertinent to
note that the Assessing Officer as well as the CIT(A) has not taken the
cognizance of any evidence produced by the assessee before the revenue
authorities. There is no reason given by the CIT(A) as to why the addition has
to be sustained. Therefore, it will be appropriate to remand back all the issues
contested by the assessee to the file of the CIT(A) for fresh adjudication.
Needless to say, the assessee be given opportunity of hearing by following
principles of natural justice.
8. In result, the appeal of the assessee is partly allowed for statistical
purpose.
Order pronounced in the Open Court on 19th March, 2020.
Sd/- Sd/-
(PRASHANT MAHARISHI) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 19/03/2020
R. Naheed
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
4 ITA NO. 4447/Del/2019
ASSISTANT REGISTRAR
ITAT NEW DELHI
Date of dictation 03.03.2020
Date on which the typed draft is placed before the 06.03.2020
dictating Member
Date on which the typed draft is placed before the
Other Member
Date on which the approved draft comes to the Sr.
PS/PS
Date on which the fair order is placed before the
Dictating Member for pronouncement
Date on which the fair order comes back to the Sr. 19.03.2020
PS/PS
Date on which the final order is uploaded on the 19.03.2020
website of ITAT
Date on which the file goes to the Bench Clerk 19.03.2020
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
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