Appeal details
Counselvise Citation
[2011] 122 COUNSELVISE.COM (IT) 6177 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 10 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
04-07-2011
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
D
Next Hearing Date
04-07-2011
Assessment Year
1999-2000
Appeal Filed On
28-08-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI (BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 746/MDS/2009 ASSESSMENT YEAR : 1999-2000 THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1), CHENNAI 600 034. (APPELLANT) V. M/S FISHER SANMAR LTD., NO.9, CATHEDRAL ROAD, CHENNAI 600 086. PAN : AAACF0483F (RESPONDENT) C.O. NO. 140/MDS/2009 (IN I.T.A. NO. 746/MDS/2009) ASSESSMENT YEAR : 1999-2000 M/S FISHER SANMAR LTD., NO.9, CATHEDRAL ROAD, CHENNAI 600 086. (CROSS OBJECTOR) V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1), CHENNAI 600 034. (RESPONDENT) REVENUE BY : SHRI ANIRUDH RAI ASSESSEE BY : SHRI SARO J KUMAR PARIDA O R D E R PER BENCH : APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FI LED BY THE ASSESSEE, BOTH ARE DIRECTED AGAINST ORDER DATED 31. 12.2009 OF THE I.T.A. NO. 746/MDS/09 C.O. NO. 140/MDS/09 2 COMMISSIONER OF INCOME TAX (APPEALS)-III, CHENNAI, FOR THE IMPUGNED ASSESSMENT YEAR. 2. CROSS OBJECTION FILED BY THE ASSESSEE IS DELAYED BY 54 DAYS. WE ARE SATISFIED THAT REASONABLE CAUSE HAS BEEN SHO WN BY THE ASSESSEE FOR THE DELAY IN ITS AFFIDAVIT. NO SERIOU S OBJECTION WAS RAISED BY THE LEARNED D.R. IN THIS REGARD. HENCE, WE CONDONE THE DELAY AND ADMIT THE CROSS OBJECTION. SINCE CROSS O BJECTION RAISED BY THE ASSESSEE QUESTIONS THE JURISDICTION FOR REOP ENING THE ASSESSMENT, IT IS TAKEN UP FIRST FOR DISPOSAL. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REOPENING WAS RESORTED TO AFTER FOUR YEARS FROM THE END OF TH E RELEVANT ASSESSMENT YEAR THOUGH THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. AS PER THE LD. CO UNSEL, THE ONLY REASON STATED FOR THE REOPENING, AS APPEARING IN PA PER-BOOK PAGE NO.111, WAS AS UNDER:- IT IS SEEN THAT U/S 80IA, AS AMENDED BY FINANCE ACT, 1998 PROVIDES THAT WHERE AN AMOUNT OF PROFITS AND G AINS AN INDUSTRIAL UNDERTAKING IS CLAIMED AND ALLOWED AS DE DUCTION U/S 80IA, FOR ANY ASSESSMENT YEAR THE DEDUCTION TO THE EX TENT OF SUCH PROFITS SHALL NOT QUALIFY FOR DEDUCTION UNDER A NY OTHER PROVISION OF CHAPTER VIA (80H TO 80TT) AND IN NO CA SE EXCEED THE PROFITS AND GAINS OF SUCH ELIGIBLE BUSINESS. I T IS SEEN THAT I.T.A. NO. 746/MDS/09 C.O. NO. 140/MDS/09 3 30% OF THE PROFIT (RS. 2,55,89,532/-) IS ALLOWED AS DEDUCTION U/S 80IA AND THE SAME WAS NOT REDUCED FOR 80HHC COMPUTA TION. ALSO THE P&L A/C AS AT 31.3.99 SHOWED THAT THE ASSE SSEE RECEIVED INCOME FROM SCRAP SALES OF RS.10,19,869/- AND MISC INCOME OF RS. 19,92,708/- AS INCLUDED IN OTHER INCO ME (SCH-2) WHEREAS THE SCRAP SALES WAS NOT ADDED TO THE TTO AN D ALSO 90% OF MISC INCOME WAS NOT EXCLUDED FROM THE PROFIT TO ARRIVE AT ADJUSTABLE PROFIT. RELYING ON PAPER-BOOK 79-81, LD. COUNSEL SUBMITTED THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, ASSESSEE HAD GIVEN A BREAK-UP ON ITS CLAIM FOR DEDUCTION UNDER SECTION 8 0HHC AND 80IA OF THE ACT, WHICH WAS PERSONALLY HANDED OVER TO THE AS SESSING OFFICER ON 21.3.2002. RELYING ON THE ORIGINAL ASSESSMENT O RDER DATED 22.3.2002 PLACED AT PAPER-BOOK PAGE 81, LD. COUNSEL SUBMITTED THAT THE A.O. HAD CONSIDERED THE COMPUTATIONS OF DEDUCTI ONS UNDER SECTION 80HHC AS WELL AS 80IA OF THE ACT AND ALSO T HE TREATMENT OF SCRAP SALES AND MISCELLANEOUS INCOME. THEREFORE, A CCORDING TO HIM, REOPENING WAS DONE BASED ON A CHANGE OF OPINION AND IN VIEW OF HON'BLE APEX COURT IN THE CASE OF CIT V. KELVINATOR OF INDIA (2010) 320 ITR 561 (SC), SUCH A REOPENING WAS NOT VALID IN LAW. IN ANY CASE, ACCORDING TO HIM, ASSESSEE COULD SIMULTANEOUS LY CLAIM DEDUCTIONS UNDER SECTION 80HHC AND 80IA AND THIS VI EW HAS BEEN UPHELD BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SCM I.T.A. NO. 746/MDS/09 C.O. NO. 140/MDS/09 4 CREATIONS V. ACIT (2008) 304 ITR 319 (MAD.). THERE FORE, AS PER THE LD. COUNSEL, THE ASSESSING OFFICER HAVING TAKEN SUC H A VIEW, HE COULD NOT BE CONSIDERED TO HAVE COMMITTED ANY ERROR OR MI STAKE. 4. PER CONTRA, LEARNED D.R., SUPPORTING THE ORDER O F LD. CIT(APPEALS) REJECTING ASSESSEES PLEA THAT REASSES SMENT WAS NOT VALIDLY INITIATED, SUBMITTED THAT THERE WAS NO PROP ER CONSIDERATION OF THE CLAIM OF THE ASSESSEE IN THE ORIGINAL ASSESSMEN T WITH REGARD TO DEDUCTIONS UNDER SECTION 80HHC AND 80IA OF THE ACT. NOR WAS THERE ANY PROPER DISCLOSURE BY THE ASSESSEE. ACCORDING T O HIM, HON'BLE DELHI HIGH COURT IN THE CASE OF CONSOLIDATED PHOTO AND FINVEST LTD. V. ACIT (2006) 281 ITR 394 (DELHI) HELD THAT WHERE THERE WAS A FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS, A REOPENING COULD BE RESORTED TO. 5. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. THE REASONS FOR REOPENING ARE GIVEN AT PARA 2 ABOVE . THE FIRST REASON IS THAT THE ASSESSEE CLAIMED BOTH DEDUCTIONS UNDER SECTION 80IA AND 80HHC OF THE ACT. HON'BLE JURISDICTIONAL HIGH COURT UPHELD THIS VIEW THAT SUCH DEDUCTIONS COULD BE CLAIMED VID E ITS DECISION IN THE CASE OF SCM CREATIONS (SUPRA) AND ALSO IN LATER DECISIONS. IN SO I.T.A. NO. 746/MDS/09 C.O. NO. 140/MDS/09 5 FAR AS TREATMENT OF SCRAP SALES AND MISCELLANEOUS I NCOME, ATLEAST SCRAP SALES HAVE BEEN SPECIFICALLY MENTIONED BY THE ASSESSING OFFICER IN HIS ORIGINAL ASSESSMENT ORDER DATED 22.3 .2002 UNDER SECTION 143(3) OF THE ACT. IN ANY CASE, ASSESSEE H AD, DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, GIVEN DE TAILS OF ITS COMPUTATIONS UNDER SECTION 80HHC AND 80IA OF THE AC T. THEREFORE, THESE WERE IN ALL PROBABILITIES DULY CONSIDERED BY THE ASSESSING OFFICER WHILE COMPLETING THE ORIGNAL ASSESSMENT. T HE REASON FOR REOPENING MENTIONED ABOVE WAS REACHED WITHOUT ANY T ANGIBLE MATERIAL. PROVISO TO SECTION 147 ALSO COULD NOT BE INVOKED SINCE THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO FURNISH ALL MATERIAL FACTS RELATING TO ASSESSMENT. THUS, THE REOPENING HAS BEEN RESORTED TO BASED ON CHANGE OF OPINION. SUCH A REOPENING, I N VIEW OF THE DECISION OF HON'BLE APEX COURT IN THE CASE OF KELVI NATOR OF INDIA WAS CLEARLY BAD IN LAW. THE REOPENING NOTICE AS WELL A S THE PURSUANT REASSESSMENT ORDER, THEREFORE, ARE QUASHED. 6. IN THE RESULT, CROSS OBJECTION FILED BY THE ASSE SSEE STANDS ALLOWED. I.T.A. NO. 746/MDS/09 C.O. NO. 140/MDS/09 6 7. SINCE ASSESSEES CROSS OBJECTION HAS BEEN ALLOWE D, APPEAL OF THE REVENUE BECOMES INFRUCTUOUS. HENCE, APPEAL OF THE REVENUE IS DISMISSED AS INFRUCTUOUS. 8. TO SUMMARISE THE RESULTS, APPEAL FILED BY THE RE VENUE STANDS DISMISSED, WHEREAS, THE CROSS OBJECTION FILED BY TH E ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE FOURTH DAY OF JULY, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 4 TH JULY, 2011. KRI. COPY TO: ASSESSEE/ASSESSING OFFICER/CIT(A)-III, CH ENNAI/ CIT, CHENNAI-I, CHENNAI/D.R./GUARD FILE
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