M/s Nikkamal Jewellers, Ludhiana V. ACIT, Ludhiana

CO 17/CHANDI/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3140 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 08-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRKANTA
• Keywords: Reopening of assessment; Difference of opinion; Assessment record; Tax effect; Reason to believe; Change of opinion; Capital expenditure
• Section: 143(3); 142(1); 10B; 32; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO 1252/CHD/2016 ASSESSMENT YEAR: 2007-08 ACIT VS. NIKKAMAL JEWELLERS CIRCLE-7, LUDHIANA 455, THE MALL, LUDHIANA PAN NO. AABFN7282Q CROSS OBJECTION NO. 17/CHD/2017 (IN ITA NO. 1252/CHD/2016) ASSESSMENT YEAR: 2007-08 NIKKAMAL JEWELLERS VS. ACIT 455, THE MALL, LUDHIANA CIRCLE-7, LUDHIANA ITA NO 1253/CHD/2016 ASSESSMENT YEAR: 2008-09 ACIT VS. NIKKAMAL JEWELLERS CIRCLE-7, LUDHIANA 455, THE MALL, LUDHIANA CROSS OBJECTION NO. 18/CHD/2017 (IN ITA NO. 1253/CHD/2016) ASSESSMENT YEAR: 2008-09 NIKKAMAL JEWELLERS VS. ACIT 455, THE MALL, LUDHIANA CIRCLE-7, LUDHIANA ITA NO 1254/CHD/2016 ASSESSMENT YEAR: 2009-10 ACIT VS. NIKKAMAL JEWELLERS CIRCLE-7, LUDHIANA 455, THE MALL, LUDHIANA CROSS OBJECTION NO. 19/CHD/2017 (IN ITA NO. 1254/CHD/2016) ASSESSMENT YEAR: 2009-10 NIKKAMAL JEWELLERS VS. ACIT 455, THE MALL, LUDHIANA CIRCLE-7, LUDHIANA ITA NO 1255/CHD/2016 ASSESSMENT YEAR: 2010-11 ACIT VS. NIKKAMAL JEWELLERS CIRCLE-7, LUDHIANA 455, THE MALL, LUDHIANA 2 CROSS OBJECTION NO. 20/CHD/2017 (IN ITA NO. 1255/CHD/2016) ASSESSMENT YEAR: 2010-11 NIKKAMAL JEWELLERS VS. ACIT 455, THE MALL, LUDHIANA CIRCLE-7, LUDHIANA (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL REVENUE BY : SMT. CHANDRKANTA DATE OF HEARING : 28/06/2017 DATE OF PRONOUNCEMENT : 28/08/2017 ORDER PER BENCH ALL THESE APPEAL HAVE BEEN FILED BY THE REVENUE AGA INST THE COMMON ORDER OF LD. CIT(A)-3. LUDHIANA DT. 22/09/2016 AND CROSS OBJECTIONS IN ALL THE APPEALS FILED BY THE ASSESSEE. 2. SINCE THE GROUNDS RAISED AND ISSUES INVOLVED IN ALL THE APPEALS ARE IDENTICAL, THE SAME WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. WE SHALL BE TAKING ITA NO. 1252/CHD/2016 AS THE LEAD CASE FOR DISPOSING OF ALL THE APPEALS TOGETHER. 3. THE GROUNDS RAISED IN THIS APPEAL ARE AS UNDER: (I) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) WAS RIGHT IN DELETING THE DISALLOWANCE OF R S. 2,14.89.928/- MADE BY THE ASSESSING OFFICER U/S 10B OF THE INCOME TAX ACT, 1961. (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN HOLDING THAT THE ISSUE OF DEDUCTION U/S. 10B HAS ATTAINED FINALITY A S THE DEPARTMENT HAS NOT CONTESTED THIS ISSUE BEFORE THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN A.Y. 2011-12 WHEREAS THE FACT IS THAT THIS ISSUE WAS NOT CONTESTED ONLY DUE TO THE TAX EFFECT BEING BELOW TH E MONETARY LIMITS PRESCRIBED IN CIRCULAR NO. 21/2015 DATED 10-12-2015 . (III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF J.B. BO DA AND CO. PVT. LTD. (223 1TR 271) IS APPLICABLE TO THE CASE OF THE ASSE SSEE AS IN THE CASE OF J.B. BODA CO. PVT. LTD. THE TRANSACTIONS WERE DONE BY TH E ASSESSEE WITH THE PERMISSION OF THE RESERVE BANK OF INDIA AND ALS O, IN THE CASE OF J.B. BODA PVT. LTD., THE HON'BLE SUPREME COURT GRANTED R ELIEF TO THE ASSESSEE ON THE BASIS OFCBDT CIRCULAR NO. 731, DATE D 20.12.1995 WITH REGARDS TO DEDUCTION U/S 80 O WHEREAS IN THE CASE O F ASSESSEE, DEDUCTION IS CLAIMED U/S 10B. 3 (IV) WHETHER GOODS MANUFACTURED AND RETURNED BACK T O A PARTICULAR PARTY OUTSIDE INDIA WOULD COME UNDER THE AMBIT OF EXPORT AND THUS QUALIFY FOR DEDUCTION U/S 10B ESPECIALLY WHEN MATERIAL FOR MANU FACTURING HAS BEEN SUPPLIED BY THAT PARTY FREE OF COST AND ASSESSEE HA S BEEN PAID MAKING CHARGES. (V) WHETHER THE MAKING CHARGES/JOB WORK CHARGES REC EIVED IS CONVERTIBLE FOREIGN EXCHANGE CAN BE TERMED AS SALE PROCEEDS WIT HIN THE MEANING OF SECTION 10B. 4. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN W HICH HE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN I NITIATING THE PROCEEDINGS U/S 147 R.W.S 148 OF THE ACT. 2. THAT THE WORTHY CIT(A) HAS FAILED TO APPRECIATE THA T THE EARLIER ASSESSMENT HAD BEEN COMPLETED U/S 143(3) AND SINCE THE ASSESSM ENT AS REOPENED IS BEYOND FOUR YEARS AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AND IT IS JUST A CHANG E OF OPINION, WHICH IS NOT PERMITTED. 3. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, ON MERITS THE CIT HAS RIGHTLY ALLOWED THE DEDUCTION U/S 10B ON THE BASIS OF EARLIER ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH, CHANDIGAR H FOR ASTT. YEAR 2011-12 AND THE DEPARTMENT HAS ACCEPTED THE SAID ORDER OF THE H ONBLE ITAT AND HAS NOT FILED ANY APPEAL ON THIS GROUND BEFORE THE HONBLE PUNJAB & HARYANA HIGH COURT. 5. BRIEF FACTS OF THE CASE THE ASSESSEE WAS 100% EX PORT ORIENTED UNIT ENGAGED IN MANUFACTURING AND EXPORT OF JEWELLERY. T HE ASSESSEE WAS CLAIMING EXEMPTION UNDER SECTION 10B SINCE THE YEAR OF INCEP TION I.E. AY 2004-05: 6. POST ASSESSMENT PROCEEDINGS FOR THE AY 2011-12 T HE ASSESSING OFFICER HAS ISSUED NOTICE UNDER SECTION 148 TO THE ASSESSEE VID E LETTER DT. 25/04/2014. THE REASONS RECORDED FOR REOPENING BY THE AO WHICH ARE AS UNDER: OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX RANGE- VII, AAYAHAR BHAWAN, RISHI NAGAR, LUDHIANA. F. NO. ADDL. CIT/R-VII/142( 1 )/2014-15/ DATED 2 5.04.201 4 TO THE PRINCIPAL OFFICER M/S NIKKA MAI JEWELLERS, 455, THE MALL, LUDHIANA. DEAR SIR, SUB: ASSESSMENT PROCEEDINGS FOR A.Y. 2007-08 - REG- PLEASE REFER TO THE ABOVE. 2. A NOTICE U/S 148 OF THE I.T. ACT HAS ALSO BEEN ISSU ED ON 25.03.2014 AND SERVED ON YOU PN THE SAME DAY. YOU HAVE SUBMITTED V IDE LETTER FILED ON 09.04.2014 THAT RETURN FILED U/S 139(1) OF THE I.T. ACT MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE I.T. ACT. VIDE AFORESAID LETTER YOU HAVE ALSO 4 REQUESTED FOR THE COPY OF THE REASONS RECORDED FOR ISSUE OF NOTICE U/S 148 OF THE I.T. ACT FOR REOPENING OF ASSESSMENT PROCEEDINGS. C OPY OF THE REASONS RECORDED BY THE ACIT, CIRCLE-VII, LUDHIANA IS ENCLOSED HEREW ITH AS ANNEXURE-A. NOTICE HAS BEEN ISSUED AFTER APPROVAL BY THE CIT-III, LUDHIANA CONVEYED VIDE LETTER F. NO.CIT- III/JB/109/2013-14/4131 DATED 25.03.2014. 3. YOU ARE REQUESTED TO FURNISH FOLLOWING DETAILS AND EXPLANATIONS FOR COMPLETION OF THE REASSESSMENT IN YOUR CASE: (I) COPY OF ALL THE PURCHASE AND SALE BILLS PERTAINING TO THE NOIDA UNIT. (II) EVIDENCE OF RECEIPT OF FOREIGN EXCHANGE IN RESPECT OF EXPORTS MADE. (III) COPY OF THE REPORT OF AUDITOR IN FORM-56G UNDER RUL E 16E OF THE I.T. RULES. (IV) FROM THE REASONS RECORDED, COPY ENCLOSED HEREWITH I T CAN BE SEEN THAT YOU HAVE MADE INCORRECT CLAIM OF DEDUCTION U/S 10B OF I.T. ACT TO THE EXTENT OF RS.2,19,70,207/- PLEASE EXPLAIN WHY THE S AME SHOULD NOT BE DISALLOWED. 4. THE HEARING IS FIXED FOR 01.05.2014 AT 3.00 P.M. NOTICES U/S 143(2) & 142(1) OF THE I.T. ACT 1961 ARE ENCLOSED HEREWITH FOR NECESSARY C OMPLIANCE. (R.N. POONIA) ADDL, COMMISSIONER OF INCOME TAX, RANGE-VII, LUDHIANA. ANNEXURE A DURING COURSE OF ASSESSMENT PROCEEDINGS FOR A Y . 201 1 12 IL WAS OBSERVED THAT THE ASSESSEE HAS CLAIMED EXEMPTION OF INCOME U/S 1 0D OF THE J.T. FOR ITS UNIT AT NOIDA. THE CLAIM OF EXEMPTION WAS EXAMINED. FROM TH E BILLS OF PURCHASE AND SALE PRODUCED BY THE ASSESSEE IT WAS FOUND THAT THE ASSE SSEE IS NOT INVOLVED ANY EXPORT OF GOODS MANUFACTURED BY IT. THE ASSESSEE AC TUALLY INVOLVED IN DOING JOB WORK OF CERTAIN PARTIES OF DUBAI. THE ASSESSEE CLAI MED THAT IT HAS BEEN INVOLVED IN SUCH ACTIVITIES IN THE PREVIOUS YEAR RELEVANT TO A. Y. 2007-08 ALSO. THE ASSESSEE FURNISHED THE COPY OF THE PURCHASE AND SALE BILLS F ROM WHICH IT WAS OBSERVED THAT IT IS ACTUALLY INVOLVED IN JOB WORK ONLY. THE FACT CAN APPARENTLY BE SEEN FROM THE SO CALLED PURCHASE BILL OF M/S SIROYA JEWELLERS, DU BAI SUBMITTED BY IT WHEREIN THE FOLLOWING NOTE HAS BEEN GIVEN ON THE INVOICE: 'THIS IS TO CERTIFY THAT THE GOLD BARS SEND BY THIS INVOICE IS DELIVERED FREE OF COST TO M/S NIKKAMAL JEWELLERS, N.S.E.Z. FO R MANUFACTURING PURPOSE. AFTER MANUFACTURING THE JEWELLERY, SHOULD BE EXPORTED BACK TO US OR TO AL SALAM JEWELLERY LLC DUBAI OR TO ANY OF OUR NOMINATED BUYERS. THIS GOLD IS SENT THROUGH MR. SAN JEEV KUMAR JAIN HOLDER OF INDIAN PASSPORT NO. Z1347665.' THE NOTE CLEARLY SHOWS THAT THE ASSESSEE HAS ONLY T O CARRY OUT CERTAIN JOB AS ASSIGNED AND SEND BACK THE MATERIAL TO SAME PART Y OR ANY PERSON NOMINATED. THE ASSESSEE HAS NO LIBERTY TO DISPOSE OF THE ITEMS AS IT WANTS BECAUSE THE FIRM IS NOT ITS OWNER. THE ASSESSEE HAD NOT PRODUCED THE BI LLS DURING ASSESSMENT PROCEEDINGS FOR A.Y. 2007-08. NEW FACTS I.E. DURING THE COURSE OF ASSESSMENT PERTAINING FOR A.Y. 2011-12, THAT IT HAS BEEN PROVE D THAT THERE IS NO PURCHASE OF GOLD & THE ASSESSEE HAS DONE ONLY JOB WORK. FOREIGN EXCHANGE REALISATION IS ONLY IN RESPECT OF VALUE OF JOB WORK. THERE IS A FAILURE ON THE PART OF THE N ASSESSEE TO DISCLOSE THIS MATERIAL FACT FULLY AND TRULY WHICH W AS NECESSARY FOR ASSESSMENT. EVEN THE TAX AUDITOR IN THE REPORT REQUIRED TO BE SUBMIT TED UNDER SUB-SECTION 5 OF SECTION 10B OF THE I.T. ACT HAS SUBMITTED AN INCORR ECT REPORT IN FORM 56G UNDER RULE 16E OF THE I.T. RULES. IN THE REPORT SO SUBMITTED T HE AUDITOR HAS CERTIFIED INCORRECT FIGURE OF FOREIGN EXCHANGE REALISED IN INDIA IN RES PECT OF EXPORT TURNOVER. THE AFORESAID FACTS PERTAINING TO A.Y.2007-08 HAVE COME OR* RECORD DURING ASSESSMENT PROCEEDINGS FOR A.Y. 2011-12. THESE FACT S WERE NOT AVAILABLE WITH THE ASSESSING OFFICER DURING THE COURSE OF PROCEEDINGS FOR A.Y.2007-08. IT HAS NOT EXPORTED ANY ITEM MANUFACTURED BY IT IN 100% EXPORT ORIENTED UNIT ESTABLISHED IN NOIDA. SUCH FACTS WERE NOT AVAI LABLE WITH THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS FOR A.Y. 2007-08. NEW FACTS HAVE COME TO LIGHT 5 ONLY IN THE PROCEEDINGS FOR A.Y. 2011-12 THAT THE A SSESSEE IS NOT AT ALL INVOLVED IN EXPORT OF ANY GOODS BUT IT IS ONLY INVOLVED IN JOB WORK. FINDINGS ON THIS ISSUE HAS BEEN GIVEN BY THE A.O. I.E. JCIT, RANGE VII, LUDHIA NA IN ORDER PASSED U/S 143(3) OF THE I.T. ACT FOR A.Y. 2011-12 AS UNDER:-' (I) FIRST OF ALL THIS IS TO BE POINTED OUT THAT THE EXE MPTION U/S 10B OF THE I.T. ACT IS AVAILABLE ONLY TO THE UNITS WHICH ARE INVOLV ED IN 100% EXPORT OF GOODS MANUFACTURED BY IT IN EXPORT PROCESSING ZONE. FOR M ANUFACTURING AND EXPORT THE ASSESSEE HAS TO BE THE OWNER OF GOODS. DICTIONARY M EANING OF PURCHASE IS AS UNDER: ' TO ACQUIRE BY THE PAYMENT OF THE MONEY OR ITS EQU IVALENT.' FURTHER SALE OF GOODS HAS BEEN DEFINED IN SECTION 4 OF THE SALE OF GOODS ACT, 1930 AS UNDER: 'SALE AND AGREEMENT TO SELL:- 1) A CONTRACT OF SALE OF GOODS IS A CONTRACT WHEREBY T HE SELLER TRANSFERS OR AGREES TO TRANSFER THE PROPERTY IN GOODS TO THE BUYER FOR A P RICE. THERE MAY BE A CONTRACT OF SALE BETWEEN ONE PART - OWNER AND ANOTHER. 2) A CONTACT OF SALE MAY BE ABSOLUTE OR CONDITIONAL. 3) WHERE UNDER A CONTACT OF SALE THE PROPERTY IN THE G OODS ID TRANSFERRED FROM THE SELLER TO THE BUYER, THE CONTRACT IS CALLED A SALE, HUT \UHERE THE TRANSFER OF THE PROPERTY IN THE GOODS IS TO TAKE PLACE AT A FUTURE TIME OR SUBJECT TO SOME CONDITION THEREAFTER TO BE FULFILLED., THE CONTRACT IS CALLED AN AGREEMENT TO SELL. 4) AN AGREEMENT TO SELL BECOMES A SALE WHEN THE TIME E LAPSES OR THE CONDITIONS ARE FULFILLED SUBJECT TO WHICH THE PROPERTY IN TFIE GOODS IS TO BE TRANSFERRED.' GOODS HAVE BEEN DEFINED BY SECTION 2 (7) OF THE SAL E OF GOODS ACT, 1930 AS UNDER:- 'GOODS MEANS EVERY KIND OF MOVABLE PROPERTY OTHER T HAN THE ACTIONABLE CLAIMS AND MONEY; AND INCLUDES STOCK AND SHARES, GROWING C ROPS, GRASS, AND THINGS ATTACHED TO OR FORMING PART OF THE LAND WHICH ARE A GREED TO BE SEVERED BEFORE SALE OR UNDER THE CONTRACT OF SALE.' PRICE HAS BEEN DEFINED BY SECTION 2 (10) OF THE SAL E OF GOODS ACT,1930AS UNDER:- 'PRICE MEANS THE MONEY CONSIDERATION FOR A SALE OF GOODS.' PROPERTY HAS BEEN DEFINED BY SECTION 2 (11) OF THE SALE OF GOODS ACT, 1930 AS BELOW:- 'PROPERTY MEANS THE GENERAL PROPERTY IN GOODS AND N OT MERELY A SPECIAL PROPERTY.' AS PER SECTION 32 OF THE SALE OF GOODS ACT, 1930 PA YMENT AND DELIVERY ARE CONCURRING CONDITIONS. THE DEFINITION HAS BEEN GIVE N AS UNDER: - ' UNLESS OTHERWISE AGREED, DELIVERY OF THE GOODS AN D PAYMENT OF THE PRICE ARE CONCURRENT CONDITIONS, THAT IS TO SAY, THE SELLER S HALL BE READY AND WILLING TO GIVE POSSESSION OF THE GOODS TO THE BUYER IN EXCHANGE FO R THE PRICE, AND THE BUYER SHALL BE READY AND WILLING TO PAY THE PRICE IN EXCH ANGE FOR POSSESSION OF GOODS.' FROM THE DEFINITIONS REPRODUCED ABOVE IT IS APPAREN T THAT THE TITLE OF GOODS NEVER PASSED TO THE ASSESSEE. THE ASSESSEE NE VER HAD THE DOMINION OVER THE GOLD BARS CLAIMED TO HAVE BEEN PURCHASED BY IT. THE,-OWNERSHIP ALWAYS REMAINED WITH THE SENDER. THE ASSESSEE IS INVOLVED IN EXPORT OF JEWELLERY THEN IT HAS TO BE THE OWNER OF GOLD FROM WHICH THE JEWELLER Y IS MANUFACTURED. IN THE INSTANT CASE THE GOLD OR OLD JEWELLERY WAS RECEIVED BY THE ASSESSEE FOR MAKING OR REMAKING. IT IS CLEARLY MENTIONED IN THE SO CALLED PURCHASE OR SALE BILLS THAT THE GOLD OR OLD GOLD JEWELLERY HAS BEEN RECEIVED FREE O F COST BY THE ASSESSEE. THE GOLD OR OLD GOLD JEWELLERY HAS TO BE RETURNED BY TH E ASSESSEE SPECIFICALLY MENTIONING AS TO I) WHAT WAS THE QUANTITY RECEIVED IN ADVANCE FREE O F COST, II) WHAT THE WASTAGE / MANUFACTURING LOSS IS AND 6 III) WHAT IS THE QUANTITY OF JEWELLERY MANUFACTURE D. THE ASSESSEE HAD NEVER BECOME THE OWNER OF THE GOLD OR OLD GOLD JEWELLERY RECEIVED BY IT. THE ASSESSEE NEVER HAD ANY AUTHORIT Y TO USE THE GOLD FOR ANY OTHER PURPOSE LIKE TRADING ETC. BUT COULD ONLY USE FOR TH E PURPOSE OF MAKING JEWELLERY. FURTHER THE ASSESSEE NEVER HAD ANY LIBERTY TO SELL THE JEWELLERY MANUFACTURED OUT OF THE GOLD RECEIVED TO ANYBODY OTHER THAN THE PERS ON MENTION IN THE SO CALLED PURCHASE BILL I.E. M/S SIROYA JEWELLERS OR TO AL SA LAM JEWELLERY LLC DUBAI OR TO ANY OF OUR NOMINATED BUYERS OF M/S SIROYA JEWELLERS WHO PROVIDED THE GOLD. WHEN NO GOLD WAS PURCHASED, THE ASSESSEE HAD NO GOL D OF HIS OWN FOR MANUFACTURING JEWELLERY AND ITS SUBSEQUENT EXPORT. (COPIES OF ALL THE PURCHASE BILLS ARE MADE PART OF THIS ORDER AS ANN.-A, PAGE N O. 27 TO 43. COPIES OF ALL THE'SALE BILLS ARE MADE PART OF THIS ORDER AS ANN. B, PAGE N O.44 TO 60. (II) IT IS IMPORTANT TO NOTE FROM THE SALE BILLS / BILL OF LANDING SUBMITTED BY THE ASSESSEE THAT ONLY THE AMOUNT OF MAKING CHARGES WAS RECEIVABLE BY IT. IF THE ASSESSEE HAD PURCHASED THE GOLD THEN IT WAS ENTITLE D TO RECEIVE THE VALUE OF ENTIRE GOLD JEWELLERY. IN THE INSTANT CASE THE ASSE SSEE HAS NOT SHOWN THE ENTIRE VALUE OF JEWELLERY AS RECEIVABLE BUT ONLY THE MAKIN G CHARGES HAVE BEEN SHOWN AS RECEIVABLE. (III) THE FACT THAT THE ASSESSEE HAD TO MENTION THE WEIGHT LOSS DURING MANUFACTURING OF JEWELLERY CLEARLY ESTABLISHES THAT IT HAD NOT BECOME THE OWNER OF THE GOLD RECEIVED BUT THE ENTIRE QUANTITY WAS TO BE RETURNED. THAT IS WHY MANUFACTURING LOSSES HAS TO BE MENTIONED IN THE SAL E BILL. (IV) THE ASSESSEE'S SUBMISSION THAT IT IS INVOLVED IN CONVERSION OF IMPORTED GOLD AS WELL AS STANDARD GOLD PURCHASED FROM LOCAL MARKET I N JEWELLERY IS FACTUALLY INCORRECT AS DISCUSSED ABOVE. THE ASSESSEE HAS NEVE R PURCHASED OR IMPORTED ANY GOLD AS DISCUSSED AT SUB PARA I TO III ABOVE. FACTU ALLY THE ASSESSEE HAS RECEIVED EITHER OLD JEWELLERY OR STANDARD GOLD FOR SPECIFIED JOB WORK. THE GOLD OR JEWELLERY SO RECEIVED HAS BEEN RETURNED AFTER NECESSARY JOB W ORK AS CAN APPARENTLY BE SEEN FROM THE SALE BILLS WHEREIN THE MAKING CHARGES ARE CLEARLY MENTIONED AND WHICH IS THE AMOUNT RECEIVED FROM THE PARTY AT DUBA I. (V) THE ASSESSEE HAS REFERRED TO CIRCULAR 14 OF 2013 DATED 01.07.2013. REFERRING THE CIRCULAR ASSESSE HAS SUBMITTED THAT IT WAS NOT REQU IRED TO BRING THE ENTIRE SALE PROCEEDS OF EXPORT TURNOVER IN INDIA. IT HAS BEEN S UBMITTED THAT CREDIT FOR PAYMENTS IN FOREIGN CURRENCY IS TO BE ALLOWED. THE RELIANCE ON CIRCULAR IS OF NO HELP AS THE ASSESSEE IS NOT AT ALL INVOLVED IN EXPORT OF ANY AR TICLE MANUFACTURED BY IT AS IT WAS NEVER BE OWNER OF THE JEWELLERY MANUFACTURED. MOREO VER, NO PAYMENT IN FOREIGN CURRENCY HAS BEEN MADE. (VI) THE ASSESSEE HAS ALSO SUBMITTED THAT THE TERM 'MANU FACTURED' HAS TO BE UNDERSTOOD IN WIDER PERSPECTIVE. IT HAS BEEN SUBMIT TED THAT IF AN OPERATION OR PROCESS THAT RENDERS A COMMODITY OR ARTICLE FIT FOR USE WHICH IS NOT OTHERWISE FIT SHOULD BE CONSIDERED AS MANUFACTURING. SECTION 10B PROVIDES BENEFITS ONLY WITH REGARD TO PROFITS DERIVED FROM EXPORT OF ARTICLE OR THING MANUFACTURED. THE ASSESSEE MAY HAVE MANUFACTURED THE JEWELLERY ITEMS BUT THE SAME WAS ONLY FOR JOB WORK AND NOT FOR PURPOSE OF EXPORT. STILL THE F ACT REMAINS THAT THE ASSESSEE HAS TO MANUFACTURE ANY ARTICLE OF WHICH IT WAS THE OWNE R. WHEN THE ASSESSEE MANUFACTURES ANYTHING OF WHICH SOMEBODY ELSE IS THE OWNER IT IS CALLED JOB WORK. IT IS PERTINENT TO MENTION THAT EXEMPTION U/S 10B O F THE I.T. ACT IS AVAILABLE ONLY TO THE EXPORTERS AND NOT TO THE ASSESSEE WHO ARE INVOL VED IN JOB WORK. (VII) THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF HONOURABLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. LOVLESH JAIN 204 TAXMAN 134 (DEL) (2012). THE FACTS OF THE CASE RELIED UPON BY THE ASSESSEE ARE E NTIRELY DIFFERENT. IN THE CASE RELIED UPON THE ASSESSEE HAD POSSESSION OF THE GOLD AND HAD A RIGHT, DOMINANCE AND DOMINION OVER IT. IN THE SAID CASE THE ASSESSEE HAS IMPORTED GOLD AND IT HAD BECOME THE OWNER. HE WAS IN A POSITION TO DISPOSE O FF IN ANY WAY THE WAY HE LIKED. IN THE INSTANT CASE, THE ASSESSEE HAD NEVER BECOME THE OWNER OF THE GOLD RECEIVED BY IT BUT THE OTHER PARTY WHOSE GOLD WAS R ECEIVED ALWAYS REMAINED THE OWNER. THE ASSESSEE HAD TO RETURN THE GOLD AFTER JO B WORK. (VIII) THE ASSESSEE HAS FURTHER SUBMITTED THAT ON S IMILAR FACTS DEDUCTION HAS BEEN ALLOWED TO IT IN EARLIER YEAR BY THE AO IN ORDER U/ S 143(3) OF THE I.T. ACT. THE COPIES 7 OF THE ORDER FOR A.Y. 2007-08, 2008-09 AND 2009-10 HAVE BEEN SUBMITTED. THE ASSESSEE'S ARGUMENT IS NOT ACCEPTABLE BECAUSE THE P RINCIPLE OF RES JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS. IT IS WELL SETTLED THAT A FINDING ON ANY MATTER IN RELATION TO A PARTICULAR YEAR OF ASSESSME NT DOES NOT OPERATE AS RES JUDICATA ON A SIMILAR QUESTION IN THE SUBSEQUENT AS SESSMENT YEAR. IN JOINT FAMILY OF UDAYAN CHINU BHAI V. CIT [1967] 63 ITR 416 , WHEREIN THE SUPREME COURT OBSERVED: 'IT IS TRUE THAT AN ASSESSMENT YEAR UNDER THE INCOM E-TAX ACT IS A SELF-CONTAINED ASSESSMENT PERIOD AND A DECISION IN THE ASSESSMENT YEAR DOES NOT ORDINARILY OPERATE AS RES JUDICATA IN RESPECT OF THE MATTER DECIDED IN ANY SUBSEQUENT YEAR, FOR THE ASSE SSING OFFICER IS NOT A COURT AND HE IS NOT PRECLUDED FROM ARRIVING A T A CONCLUSION INCONSISTENT, WITH HIS CONCLUSION IN ANOTHER YEAR. IT IS OPEN TO THE INCOME-TAX OFFICER, THEREFORE, TO DEPART FROM HIS D ECISION IN SUBSEQUENT YEARS, SINCE THE ASSESSMENT IS FINAL AND CONCLUSIVE BETWEEN THE PARTIES ONLY IN RELATION TO THE ASSESSM ENT FOR THE PARTICULAR YEAR FOR WHICH IT IS MADE. A DECISION RE ACHED IN ONE YEAR WOULD BE A COGENT FACTOR IN THE DETERMINATION OF A SIMILAR QUESTION IN A FOLLOWING YEAR, BUT ORDINARILY THERE IS NO BAR AGAINST THE INVESTIGATION BY THE INCOME-TAX OFFICER OF THE SAME FACTS ON WHICH A DECISION IN RESPECT OF AN EARLIER, YEAR WAS ARRIVED AT.' THE PUNJAB AND HARYANA HIGH COURT IN CASE OF DASHIN ESH TRANSPORT COMPANY PVT. LTD. VS CIT, PALIALA 125 ITR 681 SAID: 'A PERUSAL OF THE JUDGMENT, ANNEX. 'F, WOULD SHOW T HAT IN THE EARLIER CASE, THE TRIBUNAL DID NOT EXPRESS ANY OPIN ION ON THE QUESTION CLS TO WHETHER THE EXPENDITURE INCURRED BY THE ASSESSEE - COMPANY WA& THE CAPITAL EXPENDITURE OR BUSINESS EXP ENDITURE AND INSTEAD DISALLOWED THE DEDUCTION ON THE GROUND THAT THE SAME WAS BARRED BY THE PROVISIONS OF S. 40(A)(II) O F THE ACT. ON A REFERENCE UNDER S. 256(1) OF THE ACT, THE DIVISION BENCH OF THIS COURT (DASHMESH TRANSPORT CO. LTD. V. 93 ITR 275) R EVERSED THAT FINDING OF THE TRIBUNAL AND THERE ARO OCCASION TO E XPRESS ANY VIEW ON THE QUESTION OF THE NATURE EXPENDITURE. AS NO OP INION HAS BEEN EXPRESSED IN THE JUDGMENT AS TO WHETHER THE ALLEGED EXPENDITURE WAS THE CAPITAL EXPENDITURE OR A BUSINESS EXPENSE, THE JUDGMENT CANNOT, BY ANY STRETCH OF REASONING, OPERATE AS RES JUDICATA. OTHERWISE ALSO, IT IS WELL SETTLED THAT A FINDING O N ANY MATTER IN RELATION TO A PARTICULAR YEAR OF ASSESSMENT DOES NO T OPERATE AS RES JUDICATA ON A SIMILAR QUESTION IN THE SUBSEQUENT AS SESSMENT YEAR.' (IX) IT IS IMPORTANT TO NOTE THAT DEDUCTION U/S 10B WAS NOT AVAILABLE TO THE ASSESSEE FROM A.Y. 2012-13. THE ASSESSEE HAS CLOSED ITS NOIDA UNIT ALTHOUGH IT WAS EARNING VERY HANDSOME PROFIT I.E. MORE THAN 20 TO 2 5% NET PROFIT FROM A.Y. 2007-08 ONWARDS PARTICULARLY TO THE EXTENT OF 25% IN 2011-1 2. THE PERCENTAGE NET PROFIT OF EARLIER YEAR IS AS UNDER:- SR. NO. A.Y TURNOVER PROFIT DEDUCTION CLAIMED U/S 10B(IN RS.) 1 2007-08 1,01,38,17,723/- 2,19,70,207/- 2,19,70,20 7/- 2 2008-09 1,03,44,26,295/- 2,96,94,126/- 2,96,94,12 6/- 3 2009-10 1,19,14,16,709/- 2,85,72,199/ 2,85,31,092 /- 4 2010-11 34,61,259/- CLOSER OF A UNIT WHICH WAS EARNING SO HANDSOMELY CA NNOT BE EXPLAINED BY NORMAL BUSINESS PRUDENCE. THE ONLY POSSIBLE REASON FOR CLOSER OF THE UNIT COULD BE THAT NO ACTUAL BUSINESS WAS CARRIED OUT FROM THAT P LACE AND THE DEDUCTION U/S 10B WAS NOT AVAILABLE TO THE ASSESSEE FROM A.Y. 201 2-13. 8 3.6 FROM THE FACTS DISCUSSED ABOVE IT COMES CLEAR T HAT THE ASSESSEE IS NOT INVOLVED IN EXPORT OF ARTICLE OR THING. THE ACTIVIT Y CARRIED OUT BY THE ASSESSEE IS NOT COVERED BY PROVISIONS OF SECTION 10B OF THE I.T. AC T, HENCE THE CLAIM OF EXEMPTION U/S 10B OF THE I.T. ACT IS NOT ALLOWABLE TO IT. THE CLAIM OF EXEMPTION U/S 10B OF THE I.T ACT TO THE EXTENT OF RS.48,18,153 /- IS DISALLO WED.' 2. I HAVE GONE THROUGH THE RECORDS AND PURCHASE & S ALE BILLS SUBMITTED DURING ASSESSMENT PROCEEDINGS FOR A.Y. 2011-12. FROM PERUS AL OF THE BILLS IT HAS BEEN FOUND THAT THE ASSESSEE IS ACTUALLY INVOLVED IN JOB WORK DURING PREVIOUS YEAR RELEVANT TO A.Y. 2007-08 ALSO. THE ASSESSEE HAS SHO WN IN ITS ACCOUNTS THE PURCHASE OF GOLD WHEREAS AS PER BILL EVEN IN A.Y. 2007-08 TH ERE IS NO COST TO PURCHASE OF GOLD. THE ASSESSEE HAS NEVER BECOME THE OWNER OF GO LD BUT IT WAS MERELY RECEIVED FOR CERTAIN JOB WORK AND TO BE RETURN TO T HE SENDER I.E. M/S SIROYA JEWELLERS OR TO AL SALAAM JEWELLERY LCC, DUBAI OR T O ANY OF THE PERSON NOMINATED. IT IS ALSO NOTED THAT -AS PER EXPLANATIO N 1 TO SECTION 147 OF THE I.T. ACT PRODUCTION BEFORE THE A.O. OF ACCOUNT BOOKS OR OTHE R EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEE N DISCOVERED BY THE A.O. WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN TH E MEANING OF THE FOREGOING PROVISO. EVEN THE TAX AUDITOR HAS GIVEN CERTIFICATE WHICH IS NOT CORRECT BECAUSE EXPORT TURNOVER HAS WRONGLY BEEN REPORTED. THUS THE RE IS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE MATERIAL FACTS FULLY A ND TRULY WHICH WERE NECESSARY FOR ASSESSMENT. THE ASSESSEE ACTUALLY CLAIMED EXEMPTION U/S 10B OF THE I.T. ACT TO THE EXTENT OF RS. 2,19,70,207/- IN A.Y. 2007-08. THE CL AIM MADE BY THE ASSESSEE IS NOT ALLOWABLE IN VIEW OF THE FACTS EMERGING DURING ASSE SSMENT PROCEEDINGS FOR A.Y. 2011-12 WHICH WERE NOT MADE AVAILABLE TO THE A.O. D URING PROCEEDINGS FOR A.Y. 2007-08. IN THE CASE M/S I. P. PATEL AND CO. VS DEP UTY COMMISSIONER OF INCOME- TAX, 346 ITR 207 THE HON'BLE GUJARAT HIGH COURT HAS UPHELD THE ISSUE OF NOTICE U/S 148 OF THE I.T. ACT BEYOND FOUR YEARS WHEN THERE WA S PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE ASSESSMENT COULD BE REOPE NED. HENCE I HAVE REASONS TO BELIEVE THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT BY WAY OF EXCESSIVE RELIEF ALLOWED TO IT BECAUSE OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ITS INCOME FULLY A ND TRULY. (DR.RAHUL SOHU) ASST. COMMISSIONER OF INCOME TAX CIRCLE VII, LUDHIANA 7. DURING THE RE-ASSESSMENT PROCEEDINGS THE ASSESSI NG OFFICER HAS DISALLOWED THE CLAIM OF 10B OF THE ASSESSEE. AGGRIEVED THE ASS ESSEE FILED APPEAL BEFORE THE LD. CIT(A) CONTESTING THE DISALLOWANCE OF CLAIM UND ER SECTION 10B WHICH HAS BEEN REGULARLY ALLOWED TO THE ASSESSEE FROM THE YEA R OF INCEPTION AND ALSO ON THE GROUNDS THAT THE NOTICE UNDER SECTION 148 WAS I NVALID AS NO NEW FACTS HAVE EMERGED IN REOPENING OF THE CASE UNDER SECTION 147 ON THE SAME FACTS AMOUNTS TO CHANGE OF OPINION. 8. LD. CIT(A) HAS UPHELD THE REOPENING OF THE ASSES SMENT UNDER SECTION 147 AND DELETED THE DISALLOWANCE OF THE CLAIM UNDER SEC TION 10B ON EXAMINATION OF THE ISSUE. 9 9. AGGRIEVED, THE REVENUE FILED THE PRESENT APPEAL BEFORE US CONTESTING THE DELETION OF DISALLOWANCE UNDER SECTION 10B, WHEREAS ASSESSEE FILED CROSS APPEAL AGAINST THE REOPENING OF THE ASSESSMENT PER SE. 10. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE P ARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. 11. THE MOOT POINT OF THE REOPENING OF THE CASE IS THAT, THE ASSESSEE IS NOT INVOLVED IN THE BUSINESS OF EXPORT AND IMPORT OF AR TICLE OR THINGS BUT WAS MERELY DOING A JOB WORK TO THE PERSON FOR SENDING THE GOLD TO THE ASSESSEE FROM DUBAI WHICH THE ASSESSEE IS EXPORTING BACK AFTER DOING JO B WORK. 12. BEFORE US THE ASSESSEE HAS SUBMITTED A COPY OF THE LETTER ISSUED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-VII, L UDHIANA DT. 16/10/2008 PERTAINING TO ASSESSMENT PROCEEDING FOR AY 2007-08 WHEREIN THE COMPREHENSIVE NOTE ON BUSINESS ACTIVITY, MANUFACTURING PROCESS, T YPES OF ARTICLES PRODUCED, BRAND NAME OF GOODS SOLD, COMPLETE ADDRESS OF OFFIC E AND BUSINESS PREMISES AND RAW MATERIAL USED HAVE BEEN ENQUIRED INTO. THE NOTICE ALSO CALLED FOR MONTH WISE DETAILS FOR PURCHASE WHICH USED, CONSUMP TION AND PRODUCTION. 13. THE LD. DR RELIED ON THE ORDER OF THE LD. CIT(A ) ON THE GROUND OF JUSTIFICATION UNDER SECTION 147 THE ORDER OF THE LD . CIT(A) READS AS UNDER: 9 FOR ACQUIRING JURISDICTION U/S 147 OF THE ACT, TH E A.O. IS REQUIRED TO HAVE IN HIS POSSESSION CERTAIN MATERIAL OR INFORMATION ON THE B ASIS OF WHICH HE COULD PRIMA- FACIE HAVE REASON TO BELIEVE THAT INCOME ESCAPED AS SESSMENT. THE AO HAS RELIED UPON THE JUDGEMENT OF THE HON'BLE APEX COURT IN THE CASE OF ACIT VS. RAJESH JAVERI STOCK BROKERS P. LTD 291 ITR 500 234, OBSERV ED AS UNDER:- 'AT THE INITATION STAGE, WHAT IS REQUIRED IS' REASO N TO BELIEVE ', BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. AT THE ST AGE OF ISSUE OF NOTICE,THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIA L ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUSIT BELIEF. WHETHER THE MATERIALS COULD CONCLUSIVELY PROVE THE ESCAPEMENT IS NOT,THE CONCERN AT THAT STAGE ' 3.10 AFTER INITIATION OF PROCEEDINGS, THE A.O. COUL D CONCLUDE ON THE BASIS OF OTHER INFORMATION AND EXPLANATION OF THE APPELLANT THAT N O INCOME HAD ESCAPED ASSESSMENT, YET FOR ACQUIRING THE JURISDICTION, THE A.O. COULD STILL HAVE VALID BASIS ON THE BASIS OF INFORMATION AVAILABLE AT THE TIME O F INITIATING ACTION U/S 147/148 OF THE ACT TO HAVE PRIMA-FACIE REASON TO BELIEVE THAT SUCH INCOME ESCAPED ASSESSMENT. THE INFORMATION GATHERED BY THE A.O. IN SUBSEQUENT YEARS, AS MENTIONED ABOVE, COULD VERY WELL MAKE HIM PRIMA-FAC IE HAVE SUCH REASON TO BELIEVE THAT INCOME ESCAPED ASSESSMENT. FURTHER, AS THE AO HAS INITIATED THE 10 PROCEEDINGS ON THE BASIS OF ABOVE MENTIONED SPECIFI C INFORMATION IT COULD NOT BE SAID THAT THE ACTION OF THE AO. WAS ON THE BASIS OF CERTAIN SURMISES OR CONJECTURES ONLY. IT COULD ALSO NOT BE SAID THAT TH E MATERIAL IN POSSESSION OF THE A.O. COULD JUST MAKE HIM HAVE REASON TO SUSPECT AND NOT REASON TO BELIEVE THAT INCOME ESCAPED ASSESSMENT. MOREOVER, ADEQUACY OF SA TISFACTION OF AO IS NOT JUSTICE-ABLE AS WAS HELD BY HON'BLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF GURERA GAS CYLINDERS PVT. LTD. VS. CIT (258 ITR 170 ) AND IN CASE OF SWARAJ ENGINE LTD. VS. ACIT (260 ITR 202) FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT IN CASH OF PHOOL CHAND BAJRANG LAI VS. ITO (203 ITR 45 6). THE RATIO OF THE DECISIONS RELIED UPON BY THE LD. COUNSEL WOULD, THEREFORE, NO T HELP THE CASE OF THE APPELLANT. 3.11 THE NOTICE U/S 148 HAD NOT BEEN ISSUED ON THE CONJECTURES AND SURMISES BUT ON SOUND FOOTINGS AND ON THE BASIS OF INFORMATION C OLLECTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2011-12. IT IS INCO RRECT TO SAY THAT NO NEW FACTS HAD COME INTO EXISTENCE. ACTUALLY, IT HAD COME TO T HE NOTICE OF THE DEPARTMENT FOR THE FIRST TIME THAT THE ASSESSEE WAS NOT INVOLV ED IN EXPORT OF ANY ARTICLE OR THING BUT IT WAS ACTUALLY INVOLVED IN THE JOB WORK OF A P ARTY FORM DUBAI. THIS ISSUE HAD BEEN ELABORATELY DISCUSSED IN THE ASSESSMENT ORDER FOR A.Y. 2011-12. THE ASSESSEE HAD NEVER PURCHASED ANY GOLD, THEREFORE THERE COULD N'T BE ANY EXPORT FOR THE PURPOSE OF EXEMPTION U/S 10B OF THE IT. ACT,. HENCE , IT IS INCORRECT TO SAY THAT NO NEW FACT HAD COME INTO EXISTENCE. THE ASSESSEE'S OB JECTION THAT THE REOPENING HAD BEEN DONE MERELY AS A RESULT OF CHANGE OF OPINI ON BY THE ASSESSING OFFICE IS ALSO NOT CORRECT. THE OBJECTIONS RAISED BY THE ASSE SSEE ARE THEREFORE NOT ACCEPTABLE. THE APPELLANT HAS FURTHER SUBMITTED THAT LIABILITY OF DEDUCTION IN ASSESSMENT FRAMED U/S 143(3) FOR THREE YEARS I.E. 2007-08 TO 2 009-10 BY DIFFERENT AOS AND THUS NOW TAKING AN OPPOSITE VIEW WITHOUT CHANGE OF FACT IS MERELY CHANGE OF OPINION. IT IS SEEN THAT THE SUBMISSIONS MADE BY THE ASSESSE E ARE NOT FACTUALLY CORRECT BECAUSE NEW FACTS HAD COME TO LIGHT DURING ASSESSME NT PROCEEDINGS FOR A.Y. 2011-12 WHICH WERE NEVER BEFORE THE AOS IN EARLIER YEARS. SUCH FACTS WERE NEVER BEFORE ANY OF THE AOS IN EARLIER YEARS. ACCORDINGLY , IT IS HELD THAT THE OBJECTIONS RAISED BY THE ASSESSEE FOR REOPENING U/S 148 ARE NO T CORRECT.FURTHER, IT IS SEEN FROM THE REASON RECORDED BY THE AO THAT THE AO APPLIED H IS MIND TO THIS INFORMATION BY VERIFYING THE ASSESSMENT RECORD . 3.12 KEEPING IN VIEW THE AFORESAID FACTS, THE AO WA S FULLY JUSTIFIED IN INITIATING THE PROCEEDINGS U/S 147 R.W.S 148 OF THE I.T. ACT. THIS GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 14. THE LD. AR HAS SUBMITTED THAT THE CASE HAS BEEN CONTINUOUSLY EXAMINED UNDER SECTION 143(3) FOR THE YEAR IN QUESTION AND N O NEW FACTS HAVE BEEN CAME IN TO FORCE. THE FUNDAMENTAL ISSUES ARE BEING LOOKE D INTO EXAMINING THE VALIDITY OF THE REOPENING. 1. FULL AND TRUE DISCLOSURE. 2. NOTICE AFTER EXPIRY OF FOUR YEARS. 3. ABSENCE OR PRESENCE OF NEW MATERIAL . HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MA HAVIR SPINNING MILLS LTD. VS. CIT 270 ITR 290 (P&H) OPINED THAT NO ALLEGATION THAT TH E ESCAPEMENT OF INCOME HAD OCCURRED BY REASON OF FAILURE ON THE PART OF TH E ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT. ABSENCE OF THIS FINDING 11 MAKES THE ACTION OF THE AO WHOLLY WITHOUT JURISDICT ION. IN THE INSTANT CASE THERE HAS BEEN NO CHANGE IN THE BUSINESS ACTIVITY OF THE ASSESSEE RIGHT FROM THE INCEPTION OF THE COMPANY AND THE DEDUCTION UNDER SE CTION 10B HAS BEEN CONTINUOUSLY CLAIMED EXAMINED AND ALLOWED BY THE DE PARTMENT. SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF DULI CHAND SINGHANIA VS. ASSISTANT COMMISSIONER OF INCOME TAX 269 ITR 0192 BY THE JURISDICTIONAL HI GH COURT. EVEN IN THE INSTANT CASE THERE WAS NO FAILURE ON THE PART OF THE ASSESS EE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. ALL THE BU SINESS PROCESSES HAVE BEEN STANDS EXAMINED BY THE REVENUE IN THE PREVIOUS ASSE SSMENT YEARS. IN THE CASE OF APEEJAY EDUCATION SOCIETY VS. ASSISTANT COMMISSI ONER OF INCOME TAX [2016] 47 ITR (TRIB) 0033 (ASR) IT WAS HELD THAT AO MUST H AVE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THAT SUCH ESCAPEMENT OCCURRED BY REASONS OF FAILURE ON PART OF THE ASSES SEE. HONBLE SUPREME COURT IN THE CASE OF IOCL VS. ITO & ORS. [1986] 158 ITR 0956 HELD THAT NO CASE UNDER SECTION 148 IS MADE OUT THAT THE FACTS THAT WERE KN OWN ALL ALONG TO THE REVENUE WHILE MAKING THE ORIGINAL ASSESSMENT. IN THE CASE O F CARLTON OVERSEAS (P) LTD. VS. INCOME TAX OFFICER & ORS. [2009] 318 ITR 0295 HONB LE DELHI HIGH COURT HELD THAT IN THE ABSENCE OF NEW MATERIAL REASSESSMENT PROCEED ING THEREFORE NOT VALID AND CHANGE OF OPINION AND BEING NO NEW OR FRESH MAT ERIAL BEFORE THE AO CANNOT FORM THE BASIS FOR REOPENING OF THE ASSESSME NT. 15. THE ABOVE CASE LAWS ARE SQUARELY APPLICABLE TO THE INSTANT CASE 16. THE LD. CIT(A) AND THE AO / LD. DR HAVE RELIED UPON THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS(P)LTD. [2007] 291 ITR 500 WHERE IT HAS HELD THAT THERE HAS TO BE REASON TO BELIEVE AND THE QUESTION IS WHE THER THERE WAS A RELEVANT MATERIAL ON WHICH THE REASONABLE PERSON COULD FORME D A REQUISITE BELIEVE. IN THE INSTANT CASE AFTER GOING THROUGH THE REASONS RE CORDED BY THE AO IT CANNOT BE SAID THAT THERE HAS BEEN ANY NO NEW MATERIAL THA T NECESSITATE NEITHER 12 REOPENING NOR ANY NEW FACT SHOULD HAVE BEEN BROUGHT TO THE NOTICE. THE AO HAS ARRIVED AT HIS SATISFACTION FROM THE MATERIAL A VAILABLE ON RECORD NAMELY THE EXPORT OF GOLD TO DUBAI AND THE JOB WORK DONE BY TH E ASSESSEE TO TWO CONCERNED PERSONS PRESENT AT DUBAI. 17. THE SIMILAR FACTS ON RECORD HAVE BEEN EXAMINED AND ACCEPTED BY THE DEPARTMENT EARLIER. IN THE SATISFACTION RECORDED BY THE AO AT BEST IT SAID TO BE A CHANGE OF OPINION. HENCE THE NOTICE ISSUED UNDER SE CTION 147 DOES NOT SURVIVE IN THE EYES OF LAW. 18. SINCE THE NOTICE ISSUED UNDER SECTION 147 IS TR EATED AS INVALID AND SINCE THE VARY REOPENING OF THE ASSESSMENT IS HELD BAD IN LAW, THE CONSEQUENTIAL ADDITIONS ARE ORDERED TO BE DELETED. SINCE THE ASSE SSEE SUCCEEDS ON LEGAL ISSUE, HENCE THERE IS NO NEED TO DELIBERATE ON MERI TS AT THIS STAGE. 19. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED AND CROSS OBJECTION BY THE ASSESSEE ARE ALLOWED. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28/08/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR