Appellant: KRBL Limited, Delhi
Respondent: DCIT Central Circle-07, New Delhi
Assessment Year: 2010-11
Filed On: June 18, 2020
Order Type: Final Tribunal Order
Date of Order: May 9, 2022
Pronounced On: May 9, 2022
In the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘C’, New Delhi, the case ITA No. 1196/DEL/2020, along with related cases ITA Nos. 1197/DEL/2020 to 1202/DEL/2020 and ITA Nos. 1338/DEL/2020 to 1344/DEL/2020, involved cross appeals filed by KRBL Limited and the Department against the orders of the Commissioner of Income Tax (Appeals)-24, New Delhi, dated March 11, 2020. The appeals were heard by a bench comprising Sh. A.D. Jain, Vice President, and Dr. B. R. R. Kumar, Accountant Member.
KRBL Limited, engaged in milling paddy and manufacturing and dealing in rice, challenged various additions and disallowances made by the DCIT Central Circle-07, New Delhi, under section 153A read with section 143(3) of the Income Tax Act, 1961, for multiple assessment years including 2010-11. The primary issues in these appeals were related to additions based on alleged discrepancies in purchases, commission payments, and income attribution from a subsidiary.
KRBL Limited contended that the Commissioner of Income Tax (Appeals) erred in confirming additions totaling INR 15,20,51,511 for the assessment year 2010-11, arguing that the additions were made without due application of mind and in violation of natural justice principles.
The appellant argued that no incriminating material was found during the search operations that warranted the additions made under section 153A. The issues were previously considered and accepted in assessment proceedings under section 143(3) and, therefore, should not have been re-evaluated.
KRBL Limited challenged the addition of INR 4,76,843 on the grounds of alleged bogus transactions, asserting that sufficient evidence was provided to prove the genuineness of the transactions, which were conducted through normal banking channels.
The appellant disputed the addition of INR 15,15,74,668, attributed to income earned by its Dubai-based wholly-owned subsidiary, KRBL DMCC, arguing that the income was earned and received outside India and duly accounted for in the subsidiary’s books. The appellant further contended that the transactions were legitimate business dealings, properly reflected in its consolidated financial results.
KRBL Limited contended that the assessment order for the subject year was time-barred under the provisions of section 153A/153B, as it was passed beyond the prescribed limitation period.
The appellant also challenged the levy of interest under section 234A, asserting that there was no delay in filing the return of income for the subject year.
The Tribunal considered similar issues in the appellant’s own case for previous assessment years and deemed it appropriate to remit the issue related to the amortization of lump sum lease premium payments for land leased from Port Trusts to the Assessing Officer for a fresh decision in accordance with the law.
The Tribunal noted that the disallowance of INR 15,000 under section 14A read with Rule 8D was affirmed without proper satisfaction and material evidence. The Tribunal referred to the High Court’s decision in the appellant’s own case, emphasizing that the income entitled to deductions under Chapter VIA should be included in the total income for the purpose of disallowance under section 14A. The matter was remitted to the Assessing Officer for a fresh decision.
The Tribunal’s order was pronounced in the open court on May 9, 2022, partially allowing the appeal for statistical purposes. The issues related to amortization of lease payments and disallowance under section 14A were remitted for fresh consideration, while other grounds were addressed based on the merits and evidence presented.
Order pronounced in the open court on 09/05/2022.
Sd/- Sd/-
(A.D. JAIN) (B.R.R. KUMAR)
VICE PRESIDENT ACCOUNTANT MEMBER
ITA 1196/DEL/2020: KRBL Limited, Delhi vs DCIT Central Circle-07, New Delhi
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