- (1.) This application has been filed by the appellant under section 260A of the Income-tax Act, 1961 for admitting the appeal preferred from the order dated 23rd January, 2015 passed by the Income Tax Appellate Tribunal 'A' Bench, Kolkata in ITA No. 892/Kol/2014 for the assessment year 2007-08 on the following substantial questions of law: '2. (a) Whether on the facts and circumstances of the case the Learned Income-tax Appellate Tribunal, "A" Bench Kolkata erred in law as well as in facts in canceling the order under Section 263 of the Income-tax Act, 1961, without considering the facts, that as per material available on records the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue? (b) Whether the impugned order is bad, arbitrary, illegal, perverse and the same is nothing but a total non-application of mind of the Income Tax Appellate Tribunal, Kolkata and the same is liable to be set aside and/or quashed? (c) Whether the impugned order was made mechanically without considering the materials on record?' Heard Mr. R.N. Bandyopadhyay, learned advocate for the appellant and Mr. J.P. Khaitan, learned Senior Advocate for the respondent.
(2.) It is evident from the facts that the respondent/assessee filed its return for the assessment year 2007-08 on 28th October, 2007 declaring a total income of Rs. 3,08,72,50,100/-. The case was selected for scrutiny and notice under section 143(2) of the Act was issued and served on the assessee. The Assessing Officer by order dated 7th April, 2011 completed the assessment under section 143(3), read with section 144C(13) of the Act determining the total income at Rs. 3,35,32,97,890/-.
(3.) Thereafter, the CIT examined the assessment records and passed an order dated 7th March, 2014 under section 263 of the Act, the relevant portion of which is as under: "2. Subsequently, on examination of the assessment records, it reveals that the assessee company had claimed a deduction of Rs. 4,01,65,333/- on account of lease rental paid for motor car taken on finance lease and the same was allowed in the assessment. Further scrutiny revealed that the assessee company, as an accounting practice, treated the motor cars taken on lease as fixed assets in its books of account but claimed the lease payment as revenue expenditure for income tax purposes. It is pertinent to mention here that the assessing officer had disallowed the assessee's claim in the A.Y. 2003-04 and treated the same as capital expenditure. Since the leave rentals paid for motor cars taken on lease was also required to be treated as capital expenditure in the A.Y. 2007-08, the assessment order u/s. 143(3) r.w.s. 144C of the IT Act, 1961 is erroneous and prejudicial to the interest of revenue to the extent mentioned above. 3. A notice u/s. 263 was issued on 08-02-2014 in response to which Shri Himangsu Patel and Bikash Jain attend the office and submitted the written reply. It was argued that rental charges paid for Motor cars were the regular expenditure of the assessee ad it is to be treated in revenue expenditure for the year. 4. I have considered written submissions of the assessee. The issue raised by the assessing officer requires proper examination of the fact of the case. The assessing officer is directed to call the lease document and examine the same in the light of departments stands on the issue and adjudicate the matter afresh. The Assessing Officer is required to take up the assessment proceeding at earliest and should discussed with range heads for drafting the proper assessment order and taking correct view in the matter. The A.O. may note that assessment proceedings must be initiated in the first quarter of 2014-15 and should not be lingered on for some barring date.";