Agricom Foods Private Limited Vs PCIT (ITAT Mumbai)
ITAT Mumbai held that revisionary proceedings under section 263 of the Income Tax Act justified as relief granted by AO without inquiring into the claim of the same. Accordingly, order passed by AO erroneous and prejudicial to the interest of revenue.
Facts- The assessee herein is a part of Allana Group, which is engaged in the business of export of food products and agro commodities including frozen meat processed/frozen food, edible products, agro products etc.
PCIT examined the assessment records and noticed that the assessee had acquired a meat processing unit located at Unnao, U.P. from a partnership firm, named, M/s J.S. International for a lump-sum consideration of Rs. 100 crores. He noticed that the value of building and machinery, lease hold land. Plant & machinery and other assets acquired from the above said firm was shown at Rs.69.77 crores in the sale agreement. The balance amount of Rs.30.23 crores was shown as the value of Intangible assets. The assessee claimed depreciation on the intangible assets amount of Rs.30.23 crores.
PCIT took the view that the assessment orders passed for AY 2018-19 and 2019-20 are erroneous and prejudicial to the interests of revenue, since the AO had omitted to disallow the depreciation claimed on the intangible asset, as per the view taken by him in AY 2017-18. Accordingly, he initiated revision proceedings u/s 263 of the Act for both the years under consideration.
