9911796707
TMI Blog2018 (9) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, 1961 (Act, for short), challenge the order dated 5th June, 2017 of the Income Tax Appellate Tribunal (Tribunal, for short) in ITA No. 2427/Del/2011 filed by the assessee and ITA No. 2340/Del/2011 filed by the Revenue for the Assessment Year 2007-08. 2. The Tribunal by the impugned order has remanded four issues, namely, disallowance of operating expenses of Rs. 8,72,60,100/-; disallowance under Section 40A(2)(b) of Rs. 10,61,30,515/-; disallowance on account of unverified fixed assets of Rs. 2,45,00,000/-; and disallowance of depreciation of Rs. 36,75,000/-, to the board of the Assessing Officer for fresh adjudication. 3. Learned counsel for the appellant-assessee submits that they are not disputing and challenging the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been granted by the Commissioner of Income Tax (Appeals) in the circumstances of these cases?" 5. Earlier the Division Bench while issuing notice in the appeals vide order dated 25th August, 2017 had directed that the proceedings before the Assessing Officer pursuant to the order of remand shall remain stayed. 6. To correctly reflect on the issue raised, with the consent of the parties we have modified the substantial question of law as framed and the same would read as under:- "Whether the Tribunal was correct in remanding the issue of disallowance of purchases made from related parties, disallowance of unverified fixed assets, and depreciation on bottles and crates to the Assessing Officer for a fresh adjudication." 7. The Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated and non-aerated products, to observe that the manufacturing cost per case was Rs. 38.70, whereas the cost of purchase from related parties for resale/trading was Rs. 137.44 per case, i.e., 355% more than the manufacturing cost. He noticed that these purchases to the tune of Rs. 18,37,31,000/- were from step-up holding and fellow subsidiaries. Thus the transaction was not at arm's length. Accordingly, he held that the appellant-assessee had reduced his liability by resorting to purchases from related parties at highly inflated prices. The purchase price was computed at Rs. 58.05 per case and addition of Rs. 10,61,30,515/- was made. 9. The Commissioner of Income Tax (Appeals) had deleted the addition observing that the calculations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made. Sample copies of invoices were filed. 13. In support, learned counsel for the appellant-assessee has also drawn our attention to the assessment order to contradict the assertion that vouchers and bills were not produced before the assessing officer as the assessment order records that, the assessee vide reply dated 21st December, 2009 had furnished copies of vouchers for purchase of visicoolers on sample basis. The suppliers were Voltas Limited and Western Air Conditioning and Refrigeration Private Limited. Details of the retail shop and dealership had been provided. 14. We find and observe that the Tribunal has not specifically considered and dealt with the contention and pleas raised by the appellant/assessee while remanding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of claim of depreciation on bottles and tetra packs, which were disallowed by the Assessing Officer. 16. In view of the aforesaid discussion, the question of law is partly answered in favour of the appellant-assessee and partly answered in favour of the respondent-Revenue. We uphold the order of remand passed by the Tribunal in respect of disallowance of unverified purchases from related parties. We, however, set aside the order of the Tribunal remanding the matter to the Assessing Officer on the question of unverified fixed assets and depreciation. The said issue/question would be examined afresh and in case and only if the Tribunal finds that the said question cannot be answered on the basis of papers and documents filed before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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