By TIOL News Service

KOLKATA, JUNE 06, 2018: THE ISSUE BEFORE THE COURT IS - Whether the writ court interference is warranted, when the Tribunal has adjudicated the case based on similar allowance granted to the assessee in the previous FYs. AND THE ANSWER IS NO.

Facts of the case:

The assessee, a jeweller, had filed its returns for the relevant AY. The AO allowed the assessee's claim for deduction on account of loss of 72 kgs of gold worth Rs.10.87 crore. However, the CIT initiated Section 263 proceedings and directed the AO for fresh assessment regarding the loss of gold and also issued specific directions to make additions of Rs. 11,66,78,994/- being excess manufacturing costs and Rs. 4,74,803/- being excess depreciation. On appeal, the Tribunal reversed the CIT's order and held that the loss of gold to the similar extent had been allowed in the previous FYs to the assessee and also that a similar percentage of loss as claimed, was prevailing in the industry as a whole. Hence, the Tribunal rendered an opinion on the facts that the original assessment order was correctly made.

High Court held that,

++ no real question of law arises in the present case. It is evident that the CIT required the assessment to be reopened and even directed the AO to proceed in a particular manner. Some of the directions issued by the CIT indicated that the fresh assessment to be undertaken by the AO was a facile exercise as the quantum of addition in several cases were dictated to the AO by the CIT in his order dated October 21, 2014;

++ since the matters of fact that were referred to in the CIT's order have been appropriately dealt with the Appellate Tribunal its order does not warrant any interference, particularly as no substantial question of law arises in the circumstances.

(See 2018-TIOL-1069-HC-KOL-IT)