IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER and SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER (Assessment Year: 2017-18)

DCIT, Circle 7 (1), vs. FMI Automotive Components Private Limited, Delhi. Plot No.1, Subplot 4, 5, 8 and 9 MSIL, Supplier Park, Phase 3A, IMT Manesar, Gurgaon – 1222 050 (Haryana).

(PAN :AABCF1682P)

(APPELLANT) (RESPONDENT)

ASSESSEE BY :Shri S.K. Agarwal, CA REVENUE BY :Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing : 24.06.2025 Date of Order : 22.09.2025

O R D E R

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

1. The Revenue has filed appeal against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 30.05.2024 for the Assessment Year 2017-18 raising following grounds of appeal :-

“1. Whether on the facts and circumstances of the case and in law, the Ld NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs.5,90,59,019/- on account of disallowance of foreign exchange loss on account of plant and machinery.

2. Whether on the facts and circumstances of the case and in law, the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting Rs.49,930/- u/s 41 of the Income Tax Act, 196l on account of disallowance of static balance of capital creditors.

3. Whether on the facts and circumstances of the case and in law, the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs.11,35,806/- being disallowance of capital expenditure debited to the profit & loss account and not disallowed in the computation of income?

4. Whether on the facts and circumstances of the case and in law, the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs.40,26,506/- being disallowance of 10% of the total unexplained expenditure incurred in relation to service fee and job work?

5. Whether on the facts and circumstances of the case and in law, the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs.2.94,40,000/- being disallowance of 10% of the total disproportionately increased unexplained expenditure as compared to the previous year?

6. Whether on the facts and circumstances of the case and in law, the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs.4,04,485/- being amount received on account of insurance claim which was considered as revenue receipt.”

2. With regard to ground no.1, relevant facts are, the assessee company E-filed its return of income on 30.11.2017 declaring total income at Rs.23,76,33,990. The return was processed under section 143(1) of Income Tax Act, 1961 (for short ‘the Act’). The case of the assessee was selected for complete scrutiny through CASS with the reasons “Opening Written Down Value of fixed assets as per ITR of current year is greater than closing Written Down Value of fixed assets as per ITR of preceding year; Large “any other amount allowable as deduction” claimed in schedule BP of return; Reduction in profit because of application of Income Computation & Disclosure Standards; Custom Duty paid as shown in the ITR is less than the Duty Paid as per Export Import Data” which were communicated to the assessee. Accordingly, notices u/s 143(2) and 142(1) of the Act alongwith questionnaire were issued and served on the assessee. In response, the assessee filed the replies/documents, as sought for on the ITBA portal from time to time.

3. The assessee company is a subsidiary of M/s Futaba Industrial Co. Ltd. and

was incorporated on 1^st November, 2007 as a joint venture between M/s Futaba Industrial Co. Ltd. and Maruti Suzuki India Ltd. The company was set up with the primary objective to carry on the business of manufacturing, selli

Click Here to Read the rest of this document