M/s. Dredging International Ltd., New Delhi V. DCIT, New Delhi

CO 22/DEL/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0537 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 29-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARWINDER KAUR
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Change of opinion; Revenue expenditure
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO. - 6119/DEL/2012 (ASSESSMENT YEAR - 200 4 - 05 ) DCIT, CIRCLE - 10(1), NEW DELHI . (APPELLANT) VS DREDGING INTERNATIONAL LTD., C - 790, NEW FRIENDS COLONY, NEW DELHI. PAN - AA AFC4490J (RESPONDENT) CO - 22/DEL/2013 (IN I.T.A .NO. - 6119/DEL/2012) (ASSESSMENT YEAR - 200 4 - 05 ) DREDGING INTERNATIONAL LTD., C - 790, NEW FRIENDS COLONY, NEW DELHI PAN - AA AFC4490J (APPELLANT) VS DCIT, CIRCLE - 10(1), NEW DELHI . (RESPONDENT) APPELLANT BY S MT. PARWINDER KAUR, SR. DR RESPONDENT BY SH.K.M.GUPTA, ADV. ORDER PER DIVA SINGH, JM BY THE PRESENT APPEAL FILED BY THE REVENUE THE CORRECTNESS OF THE ORDER DATED 12.09.2012 OF CIT(A) - XIII, NEW DELHI PERTAINING TO 200 4 - 05 ASSESSMENT YEAR IS ASSAILED ON THE FOLLOWING GROUNDS: - 1. WHETHER THE CIT(A) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS.35,99,990/ - ON ACCOUNT OF UNREALIZED FOREIGN EXCHANGE FLUCTUATION LOSS TREATING THE SAME A S REVENUE EXPENDITURE? 2. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. THE ASSESSEE BEFORE US BY WAY OF THE CROSS - OBJECTION FILED, AGITATES THAT THE JURISDICTIONAL ISSUE RAISED BEFORE T HE CIT(A) HAS NOT BEEN AD JUDICATED UPON BY HIM. THE SPECIFIC GROUNDS POINT ING TO PAGE 2 OF THE IMPUGNED ORDER, IT WAS SUBMITTED HAD BEEN REPRODUCED BY HIM , HOWEVER HE HAS DECIDE THE DATE OF HEARING 0 1 .0 4 .2015 DATE OF PRONOUNCEMENT 24 .0 4 .2015 2 I.T.A .NO. - 6119 /DEL/201 2 & CO. - 22/DEL/2013 APPEAL ON MERIT S AND DISMISSED THE JURISDICTION GROUNDS AS INFRUCTUOUS . ACCORDINGLY IT WAS HIS PRAYER THAT THE IMPUGNED ORDER SUFFERS ON ACCOUNT OF THIS FACT. THE DEPARTMENT REPRESENTED BY SMT. PARWINDER KAUR, SR. DR SUBMITTED THAT SHE WOULD HAVE NO OBJECTION IF THE FILE IS RESTORED TO THE CIT(A) FOR DECIDING THE SAME, HOW EVER IN THAT EVENTUALITY, IT WAS HER SUBMISSION THE APPEAL SHOULD BE RESTORED IN ENTIRETY AS THEN IT WOULD ADDRESS THE DEPARTMENTAL GRIEVANCE ALSO. THE LD. AR HAD NO OBJECTION IF THE ISSUES ARE RESTORED IN ENTIRETY AS IT WOULD ADDRESS THE GRIEVANCE OF BOTH THE PARTIES. HIS LIMITED PRAYER WAS THAT THE CIT(A) SHOULD FIRST ADDRESS THE JURISDICTIONAL ISSUE. 3 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE FOLLOWING EXTRACT OF THE CIT(A) S ORDER, IT IS SEEN THAT THE AO S JURISDICTION WAS QUESTIONED BY THE ASSESSEE ON THE FOLLOWING SPECIFIC GROUNDS: - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD AO HAS ERRED IN ASSUMING JURISDICTION U/S 148 OF THE ACT SINCE THE NOTICE ISSUED U/S 148 OF THE A CT IS NOT VALID AS IT WAS ISSUED BEYOND A PERIOD OF FOUR YEARS. 2.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD AO HAS ERRED IN ASSUMING JURISDICTION U/S 148 OF THE ACT AS THE REASONS RECORDED OR SUPPLIED TO THE APPELLANT WER E UNDATED AND WERE PROVIDED BEYOND THE STATUTORY PERIOD OF SIX YEARS AS HELD BY THE JURISDICTIONAL HIGH COURT OF NEW DELHI IN THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. VS CIT [308 ITR 38 DEL] 2.2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD AO HAS ERRED IN MAKING FISHING AND ROVING ENQUIRIES AND ASSUMING JURISDICTION U/S 148 OF THE ACT WITHOUT EVEN HAVING ANY TANGIBLE MATERIAL ON RECORD AT THE TIME OF REOPENING THE ASSESSMENT AND RECORDING REASONS TO BELIEF 2. 3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD AO HAS ERRED IN REOPENING THE ASSESSMENT U/S 147 OF THE ACT ON THE BASIS OF MERE CHANGE OF OPINION. THE LD AO IS SEEKING TO APPLY HIS MIND ON THE SAME SET OF FACTS WHICH WERE ALREADY THERE AT TH E TIME WHEN THE ORIGINAL ASSESSMENT WAS MADE. FROM THE PERUSAL OF REASONS RECORDED, IT IS EVIDENT THAT NO NEW FACT OR MATERIAL HAS BEEN BROUGHT ON RECORD FOR THE FORMATION OF REASON TO BELIEF THAT THE INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT. IN THE INSTANT CASE THERE IS NO MATERIAL, WHICH HAS NEXUS WITH THE FORMING OF THE REQUISITE BELIEF 2.4. THAT THE LD AO HAS ON THE FACT AN IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, IN ASSUMING THAT THE FOREIGN EXCHANGE FLUCTUATION LOSS OF RS.35,99,990/ - IS CAPITAL IN NATURE WHEREAS 3 I.T.A .NO. - 6119 /DEL/201 2 & CO. - 22/DEL/2013 IN THE REASONS, THE LD AO RECORDED THAT THE FOREIGN EXCHANGE LOSS IS A NOTIONAL LOSS. 4. IT IS FURTHER SEEN THAT THE SPECIFIC GROUND WAS NOT ADJUDICATED BY THE CIT(A) HOLDING AS UNDER: - THE GROUNDS OF APPEAL 3, 4, 5 AND 6 ON ME RITS ARE ALLOWED IN FAVOUR OF THE APPELLANT, THEREFORE, THE TECHNICAL GROUNDS RAISED BY THE APPELLANT VIDE GROUND NO. - 2 TO 2.4 WITH REFERENCE TO REOPENING OF ASSESSMENT HAVE BECOME INFRUCTUOUS AND SAME ARE NOT ADJUDICATED. 5. ON A CONSIDERATION OF THE AR GUMENTS OF THE PARTIES BEFORE THE BENCH AND THE LEGAL POSITION, WE FIND THAT THE CIT(A) ERRED IN DECIDING THE ISSUE ON MERITS WITHOUT ADDRESSING THE JURISDICTIONAL ISSUE WHICH THE ASSESSEE ADMITTEDLY HAD NOT GIVEN UP. ACCORDINGLY IN VIEW OF THE ABOVE AND IN THE LIGHT OF THE PLEADINGS OF THE PARTIES BEFORE THE BENCH, WE SET ASIDE THE IMPUGNED ORDER WITH THE DIRECTION THAT THE LD. CIT(A) SHALL FIRST DECIDE THE JURISDICTIONAL ISSUE AGITATED BY THE ASSESSEE AND THEREAFTER PROCEED TO DECIDE THE OTHER GROUNDS, I F SO WARRANTED. THE SAID ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAY OF THE HEARING ITSELF. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE AND CO OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 4 T H OF APRIL 2015. S D / - S D / - (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 4 /0 4 /2015 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI