Bombay High Court
The Principal Commissioner Of Income ... vs Sterling Biotech Ltd on 29 July, 2019
Author: S.J. Kathawalla
Bench: Akil Kureshi, S.J. Kathawalla
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 495 OF 2017
The Principal Commissioner ... Appellant
Versus
Sterling Biotech Limited ... Respondent
ALONG WITH
INCOME TAX APPEAL NO. 496 OF 2017
WITH
INCOME TAX APPEAL NO. 499 OF 2017
WITH
INCOME TAX APPEAL NO. 508 OF 2017
WITH
INCOME TAX APPEAL NO. 517 OF 2017
WITH
INCOME TAX APPEAL NO. 518 OF 2017
WITH
INCOME TAX APPEAL NO. 535 OF 2017
Mr.Suresh Kumar for the Appellant.
Mr.P.J.Pardiwalla, Sr. Adv. a/w. Mr. Sankalp Sharma i/b. Mr. A.K. Jasani for the
Respondent.
CORAM : AKIL KURESHI &
S.J. KATHAWALLA, JJ.
DATE : 29TH JULY, 2019 P.C.:
1. These appeals arise out of common judgment of Income Tax Appellate Tribunal and involve the same assessee. In different appeals, different questions have ::: Uploaded on - 30/07/2019 ::: Downloaded on - 30/07/2019 22:45:12 ::: Nitin 2 / 5 22-ITXA-495-2017-A.doc been raised, however central issue is of the validity of the orders passed by the Commissioner of Income Tax in exercise of power under section 263 of the Income Tax Act, 1961 ('the Act' for short). Since the questions sought to be raised by the revenue in Income Tax Appeal No. 495 of 2017, would cover similar questions arising in other appeals, we may take note of such questions :
"1. Whether on the facts and circumstances of the case and in law, the ITAT was correct in quashing the order u/s. 263 without appreciating the fact that the Assessing Officer did not carry out the desired inquires into the various issues mentioned in order u/s. 263 of the Act and therefore order of the Assessing Officer was erroneous as stipulated in Explanation 2 to sub-section (1) to Section 263 of the I.T. Act, 1961 ?
2. Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the Assessing Officer allowed telescoping of cash transactions recorded in seized material without establishing any nexus between the generation of cash and its application and thereby not examining the provisions of section 69 of the Act in respect of the cash transactions and therefore the assessment order was erroneous and prejudicial to the interest of revenue ? 3 (i). Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the Assessing Officer allowed the deduction u/s.10B of the I.T. Act, 1961 ignoring that the assessee has not complied with the conditions laid down u/s. 10B in respect of usage of new ::: Uploaded on - 30/07/2019 ::: Downloaded on - 30/07/2019 22:45:12 ::: Nitin 3 / 5 22-ITXA-495-2017-A.doc machinery evident from the statement of Mr. Santosh Bhaktpratap the Deputy General Manager present at the premises during the course of search wherein he has confirmed that entire machinery was acquired in 2006 from Torrent being used for production ?
3(ii) Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the Assessing Officer did not investigate into the huge difference in the price of the product exported i.e. Rs.2,25,686/- per KG as compared to the price prevailing in the local market i.e. Rs.19,973/- per KG and therefore allowed the deduction u/s. 10B without any verification ?
4.Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the financial result of the Dubai branch of the assessee were accepted without carrying out any investigation into its correctness and therefore the assessment order was erroneous and prejudicial to the interest of revenue within the meaning of section 263 of the Act ?
5. Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the Assessing Officer did not carry out any investigation into the details of 151 entities found during the course of search and accepted the self serving contention of the assessee without verifying the facts behind the submission of the assessee and therefore the assessment order was erroneous and prejudicial to the interest of revenue within the meaning of section 263 of the Act ?::: Uploaded on - 30/07/2019 ::: Downloaded on - 30/07/2019 22:45:12 :::
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6. Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the Assessing Officer ought to have conducted investigation into the information seized during the course of search relating to foreign investments by the assessee in particular and the group in general and therefore the assessment order was erroneous and prejudicial to the interest of revenue within the meaning of section 263 of the Act ?
7. Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the Assessing Officer adopted wastage at 5% without any basis and without taking into account of the details already available in the seized material especially manufacturing report and therefore the assessment order was erroneous and prejudicial to the interest of revenue within the meaning of section 263 of the Act ?
8. Whether on the facts and circumstances of the case and in law, the ITAT was correct in not appreciating that the Assessing Officer simply accepted the details submitted by the assessee on the face of it without carrying out any investigation regarding the correctness of the same in respect of addition to assets and therefore the assessment order was erroneous and prejudicial to the interest of revenue within the meaning of section 263 of the Act ?
2. Question No.1 framed by the revenue is in the nature of the plenary question. Question Nos. 2 to 8 are on individual issues sought to be raised by the ::: Uploaded on - 30/07/2019 ::: Downloaded on - 30/07/2019 22:45:12 ::: Nitin 5 / 5 22-ITXA-495-2017-A.doc Commissioner in the revisional orders. We have perused the judgment of the Income Tax Appellate Tribunal with the assistance of the learned Counsel for the parties. We find that the Tribunal has specifically dealt with each head separately and come to the conclusion that the Assessing Officer in the original assessment had made full inquiries and thereafter come to the conclusion, contrary to what the Commissioner has done. The Tribunal was therefore correctly of the opinion that the revisional power under section 263 of the Act, could not have been exercised. No question of law arise. The Income Tax Appeals are dismissed.
( S.J.KATHAWALLA, J. ) ( AKIL KURESHI, J.)
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