B.R. Baskaran ORDER
B.R. Baskaran, Member (A)
1. The assessee has filed this appeal challenging the revision order dated 27-03-2019 passed by Ld Pr. CIT, New Delhi u/s. 263 of the Act for the assessment year 2012-13. The contention of the assessee is that the initiation of revision proceeding is without authority of law and jurisdiction.
2. The facts relating to the case are stated in brief. The assessment in the hands of the assessee was completed by the assessing officer, being Assistant Commissioner of Income tax, Circle-5(1)(1), Bangalore on 30-01-2017 for assessment year 2012-13. The company was amalgamated with M/s. NXP India (P) Ltd, New Delhi. Hence the Ld Pr. CIT-06, New Delhi called for assessment record and took the view that the assessment order is erroneous and prejudicial to the interests of revenue. Accordingly he initiated revision proceedings u/s. 263 of the Act.
3. The facts, which led the Ld Pr. CIT to form such a view are stated in brief. The assessee had taken certain assets on lease for a specified number of years. In the books of account, the assessee has capitalised those assets. Accordingly, it has debited its profit and loss account with depreciation on those leased assets and also interest expenses. However, in the computation of total income for the purposes of income tax, the assessee has claimed deduction of a sum of Rs. 1,09,85,585/- relating to repayment of principal component of lease rental payments. It was submitted by the assessee it has not claimed depreciation for income tax purposes.
4. The Ld Pr. CIT was of the view that the assessee has taken contradictory stand. The assessee has stated that it has taken all risks and rewards of ownership of the leased assets and therefore classified them as financial lease in the books as per AS-19. The Ld Pr. CIT noticed that, as per AS-19, in the case of Finance lease, the principal payment for acquisition of asset on lease is recognised as capital in nature and hence depreciation & financial charge is charged to the Profit and Loss account in the place of lease rent payment. The Ld Pr. CIT took the view that the assessing officer has not properly examined this issue and accordingly took the view that the assessment order is erroneous and prejudicial to the interests of revenue. Accordingly, he initiated revision proceedings u/s. 263 of the Act. In the show cause notice, the Ld Pr. CIT asked to show cause as to why an order under section 263 of the Act should not be passed in order to add back the principal amount of Rs. 1,09,85,585/- by disallowing the same as capital expenditure as per the provision of sec. 37, after allowing depreciation thereon.
5. Before Ld Pr. CIT, New Delhi, the assessee furnished a letter dated 21.3.2019, wherein the assessee primarily contended that the Ld Pr. CIT, New Delhi does not have jurisdiction over the assessee, since the registered office of the assessee company is in Bangalore and hence it falls under the jurisdiction of Ld Pr. CIT-5, Bangalore.
6. Ld Pr. CIT, New Delhi noticed that the assessee's name was earlier "Freescale Semiconductor India P Ltd with the same PAN number and later its name was changed and merged with M/s. NXP India Ltd. The assessee has a written a letter dated September 27, 2018 (the said letter has been extracted by Ld Pr. CIT at page 4 of his order), wherein it has claimed that its Principal Place of business lies in Delhi only, even though the registered office has been shifted to Bangalore. Accordingly, the Ld Pr. CIT observed that the assessee has preferred not to reply to his notice, even after taking a stand before Income tax authorities on the jurisdiction. Accordingly, the Ld Pr. CIT took the view that the assessee company does not want to say anything ........