Cit vs Insilco Ltd.
2007 Latest Caselaw 1410 Del

ORDER

1. The revenue is aggrieved by an order dated 7-12-2006 passed by the Income Tax Appellate Tribunal, Delhi Bench 'D' in ITA No. 3572/Delhi/ 2002 for the assessment year 1999-2000.

2. Learned Counsel for the revenue has raised two issues for our consideration. The first issue is whether the Tribunal was correct in allowing depreciation to the assessed on the increase in the cost of Plant and Machinery due to increased liability on account of foreign exchange rate fluctuation on the last date of the accounting year. Learned Counsel for the revenue submits that this issue is required to be decided against the revenue in view of the decision of this Court in CIT v. Woodward, Governor India (P) Ltd. (2007) 162 Taxman 60 (SC). Following the decision of this Court, no substantial question of law arises in respect of this issue.

3. The second issue concerns the deletion of an addition of Rs. 18,27,957made by the assessing officer to the book profits on account of provision for bad debts by invoking the provisions of Explanation (c) to Section 115JA(2) of the Income Tax Act, 1961. We find from the assessment order that the assessing officer has given absolutely no reason for making the addition, which has been made only in the computation.

4. The assessed was aggrieved by this and preferred an appeal which was disposed of by the Commissioner (Appeals) in favor of the assessed by holding that since the assessing officer did not give any reasons, the addition was not called for.

5. The revenue preferred an appeal before the Tribunal and from a reading of the order passed by the Tribunal, it appears that learned Counsel for the revenue and learned Counsel for the assessed agreed before the Tribunal that the issue is covered in favor of the assessed by a decision of the Special Bench of the Tribunal in the case of Jt. CIT v. Usha Martine Industries Ltd. (2007) 104 ITD 249 (Kol). On this basis the Tribunal affirmed the deletion of the addition.

6. Learned Counsel for the revenue has contended before us that the decision in the case of Usha Martine Industries Ltd. (supra) is not applicable to the facts of the case. We do not need to go into this contention in view of the fact that admittedly the assessing officer gave no reason for making the addition. For the lack of any reason for making the addition, the assessment order, to this extent only, be set aside. There was no prayer before the Tribunal for remanding the matter for making a fresh assessment and we cannot consider such a prayer now being made by learned Counsel. No substantial question of law arises in respect of this issue also.

7. Dismissed.