EIH Limited, Kolkata V. DCIT, Circle-8(1), Kolkata, Kolkata

CO 62/KOL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3584 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 04-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MD USMAN
• Assessee Lawyers: A K GUPTA
• Keywords: Reopening of assessment; Depreciation; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] I.T.A NO. 1707/KOL/20 16 ASSESSMENT YEAR : 2006-0 7 D.C.I.T., CIRCLE-8(1) -VS.- M/S EIH LTD. KOLKATA KOLKATA [PAN : AAACE 6898 B] (APPELLANT) (RESPONDENT) C.O.NO.62/KOL/2016 (A/O I.T.A NO. 1707/KO L/2016 ) ASSESSMENT YEAR : 2006-0 7 M/S EIH LTD. -VS- D.C.I.T., CIRCLE-8(1) KOLKATA KOLKATA [PAN : AAACE 6898 B] (CROSS OBJECTOR) (RESPONDENT) FOR THE DEPARTMENT : MD. USMAN, CIT(DR) FOR THE ASSESSEE : SHRI A.K.GUPTA, FCA DATE OF HEARING : 17.01.2018. DATE OF PRONOUNCEMENT : 02.02.2018. ORDER PER N.V.VASUDEVAN, JM I.T.A.NO.1707/KOL/2016 IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 27.06.2016 OF C.I.T.(A)-16, KOLKATA RELATING TO A. Y.2006-07. C.O.NO.62/KOL/2016 IS A CROSS OBJECTION FILED BY THE ASSESSEE AGAINST TH E VERY SAME ORDER OF CIT(A). 2. FIRST WE SHALL TAKE UP FOR CONSIDERATION THE GRO UNDS RAISED BY THE ASSESSEE IN THE CROSS OBJECTION WITH REGARD TO THE VALIDITY OF INIT IATION OF RE-ASSESSMENT PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 (ACT). THESE GROUND S READ AS FOLLOWS :- 1. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEA LS) IN SHORT (CIT(A) ) ERRED IN DISMISSING THE GROUND REGARDING VALIDITY OF REOP ENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT WITHOUT ANY DISCUSSION AND/O R GIVING ANY REASONS WHATSOEVER. 2. FOR THAT THE CIT(A) SHOULD HAVE HELD THAT THE AP PELLANT HAD DISCLOSED AND FILED ALL MATERIALS RELEVANT FOR THE ASSESSMENT AND THERE WAS NO OMISSION OR FAILURE ON 2 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 2 ITS PART IN THIS BEHALF AND NONE POINTED OUT IN THE REASONS RECORDED FOR REOPENING AND AS SUCH THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT BEYOND THE PERIOD OF 4 YEARS WAS NOT VALID AND WAS LIABLE TO BE CANCELLED. 3. FOR THAT THE CIT(A) SHOULD HAVE HELD THAT THE NO TICE UNDER SECTION 148 WAS ISSUED ON A MERE CHANGE OF OPINION AS ALL THE MATER IALS AND FACTS WERE AVAILABLE WITH THE A.O. WHILE FRAMING THE ASSESSMENT UNDER SE CTION 143(3) OF THE ACT. 4. FOR THAT THE CIT(A) SHOULD HAVE DISMISSED THE RE -OPENING OF THE ASSESSMENT IN AS MUCH AS THE OBJECTIONS FILED BY THE APPELLANT AG AINST THE REASONS RECORDED FOR RE-OPENING OF A ASSESSMENT WAS NOT DISPOSED OF BY T HE A.O. AND THE REASSESSMENT ORDER WAS PASSED WITHOUT DISPOSING OF THE OBJECTION S FILED BY THE APPELLANT. 3. THE FACTS WITH REGARD TO THE INITIATION OF RE-A SSESSMENT PROCEEDINGS ARE AS FOLLOWS :- THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF RUNNING HOTELS. FOR A.Y.2006-07 AN ORDER OF ASSESSMENT U/S 143(3) OF TH E INCOME TAX ACT, 1961 (ACT) WAS PASSED BY THE AO IN THE CASE OF THE ASSESSEE ON 26. 12.2008. THE AO ISSUED A NOTICE U/S 148 OF THE ACT DATED 01.03.2013 FOR MAKING ASSESSME NT U/S 147 OF THE ACT VIZ. REASSESSMENT PROCEEDINGS TO BRING TO TAX INCOME THA T HAS ESCAPED ASSESSMENT. THE REASONS RECORDED BY THE AO BEFORE ISSUING NOTICE U/ S 148 OF THE ACT ARE AS FOLLOWS :- SCRUTINY OF ASSESSMENT RECORDS REVEALED THAT THE ASSESSEE DEBITED A SUM OF RS. 3,52,05,258 TOWARDS LOSS ON EXCHANGE (NET) IN THE P ROFIT AND. LOSS ACCOUNT. IT IS FURTHER STATED IN CLAUSE 10 OF NOTES TO THE ACCOUNT S THAT THE LOSS ON EXCHANGE INCLUDED LOSS AMOUNTING TO RS. 2,67,46,608 ON ACCOU NT OF CURRENCY SWAP TRANSACTION. IT IS NOTICED FROM THE SUBMISSION OF THE AS SESSEE THAT THE ASSESSEE HAD ENTERED INTO INTEREST RATE (COUPON) SWAP TRANSACTION WITH D IFFERENT BANKS TO TAKE ON INTEREST RATE RISKS FOR ITS RUPEE LOAN FROM SBI. UBI. CITI B ANK, AND UTI BANK AND INTEREST RATE SWAP TRANSACTION WITH VARIOUS BANKS NAMELY BAR CLAYS, STANDARD' CHARTERED BANK AND CITY BANK TO MANAGE ITS FIXED INTEREST RAT E RISK AGAINST FLOATING INTEREST UNDER RESPECTIVE UNDERLYING CONTRACT. AS PER CBDT CIRCULAR FOREX DERIVATIVE TRANS ACTION ENTERED INTO THROUGH NSE, BSE AFTER 25.1.2006 WOULD NOT BE TREATED AS SPECULA TIVE TRANSACTION. AS THE ABOVE TRANSACTIONS INCLUDED TRANSACTION ENTERED INTO WITH VARIOUS FOREIGN BANKS, THE SAME DOES NOT APPEAR-TO HAVE FALLEN UNDER THE PURVIEW OF THE TRANSACTION TO BE TREATED AS 3 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 3 BUSINESS TRANSACTION. THEREFORE LOSS ON ACCOUNT OF CURRENCY SWAP TRANSACTION AMOUNTING TO RS. 2,67,46.608 IS REQUIRED TO BE ADDE D BACK AS LOSS NOT PERTAINING TO BUSINESS AND OMISSION TO DO SO RESULTED IN UNDER AS SESSMENT OF INCOME BY RS.2,67,46,608/-. THEREFORE, I HAVE REASON TO BELIEVE THAT AS SESSEE HAS ESCAPED ASSESSMENT OF INCOME OF RS.2,67,46,608/-. HENCE NOTICE UNDER SECT ION 148 IS ISSUED. 4. EVEN BEFORE THE AO THE ASSESSEE CHALLENGED THE V ALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT. IN THI S REGARD THE ASSESSEE SUBMITTED THAT AS PER FIRST PROVISO TO SECTION 147 OF THE ACT WHIC H PROVIDES THAT WHERE AN ASSESSMENT HAS BEEN MADE UNDER SUB-SECTION (3) OF SECTION 143 OF THE INCOME-TAX ACT, 1961, FOR THE RELEVANT ASSESSMENT YEAR NO ACTION CAN BE TAKEN AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS , INTER ALIA, THERE HAS BEEN A FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. THIS IS A CONDITION PRECEDENT. THE RELEVANT PROVIS O READS AS FOLLOWS : PROVIDED THAT WHERE AS ASSESSMENT UNDER SUB-SECTIO N (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT Y EAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON TH E PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTIC E ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR IT WAS POINTED OUT THAT FOR THE YEAR UNDER REFERENC E, THE ASSESSMENT WAS UNDERTAKEN UNDER SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT. TH E SAID ASSESSMENT WAS COMPLETED ON 26.12.2008. IT WAS POINTED OUT THAT CLAUSE 10 OF NO TES REFERRED TO IN THE RECORDED REASON WERE READILY AVAILABLE WITH THE ASSESSING OFFICER W HILE FRAMING ORDER UNDER SECTION 143(3) OF THE ACT AND THERE WAS ABSOLUTELY NO FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. 4 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 4 IT WAS SUBMITTED THAT NO NEW MATERIAL OR INFORMATIO N HAS COME ON RECORD AND THUS, ON THE FACTS OF THE PRESENT CASE, IT CAN BE SAID THAT IT IS MERELY A FRESH APPLICATION OF MIND AND CHANGE OF OPINION TO THE SAME SET OF FACTS WHIC H WERE AVAILABLE ON RECORD WHILE THE ASSESSMENT WAS MADE. IN FACT THE ISSUANCE OF THE RE ASSESSMENT NOTICE WAS ONLY TO START FISHING AND ROVING ENQUIRY, NOT ALLOWED UNDER THE L AW. THE NOTICE U/S 148 HAS BEEN SERVED ON THE ASSESSEE ON 05.03.2013 WHICH IS BEYOND THE TIME LIMIT OF FOUR YEARS FOR THE CAPTIONED ASSESSME NT YEAR. INITIATION OF REASSESSMENT ON THE BASIS OF SAME SET OF FACTS IS NOTHING BUT A C HANGE OF OPINION WHICH IS NOT ALLOWED IN THE LAW. HENCE THE REASSESSMENT INITIATED U/S 14 7 IS BAD IN LAW. 5. THE AO DID NOT DEAL WITH THE AFORESAID OBJECTION S RAISED BY THE ASSESSEE. HE PROCEEDED TO FRAME AN ORDER OF ASSESSMENT U/S 147 R .W.S. 143(3) OF THE ACT MAKING AN ADDITION OF RS.2,67,46,608/- WHICH IS A LOSS ON ACC OUNT OF SWAP TRANSACTIONS BY TREATING THE SAME AS NOTIONAL LOSS NOT ALLOWABLE AS A DEDUCT ION. APART FROM THE ABOVE THE AO ALSO DISALLOWED DEPRECIATION ON AIRCRAFT AND PRINCI PAL COMPONENTS OF THE LEASE RENT ON VEHICLES. BOTH THE AFORESAID ITEMS OF DISALLOWANCE WERE CLAIMED AS DEDUCTION BY THE ASSESSEE IN COMPUTATION OF TOTAL INCOME. 6. AGGRIEVED BY THE AFORESAID ORDER OF THE A O THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). IN GROUND NO.1 RAISED BEFORE CIT(A) THE ASS ESSEE SPECIFICALLY CHALLENGED THE VALIDITY OF INITIATION OF RE-ASSESSMENT PROCEEDINGS . THE SUBMISSIONS MADE BEFORE THE AO WAS REITERATED BEFORE CIT(A). 7. THE CIT(A) WITHOUT CONSIDERING ANY OF ITS SUBMIS SIONS DISMISSED THE RELEVANT GROUNDS OF APPEAL OF THE ASSESSEE BY OBSERVING AS F OLLOWS :- I HAVE GONE THROUGH THE SUBMISSION AND THE CASE L AWS SUPPLIED BY THE A.R. I DO NOT FIND MERIT IN IT AND HENCE, REOPENING U/S 148 O F THE I T ACT IS SUSTAINED AND GROUND NO.1 IS DISMISSED. 8. AGGRIEVED BY THE AFORESAID PART OF THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED CROSS OBJECTION BEFORE THE TRIBUNAL RAISING GROUNDS WHICH ARE ALREADY SET OUT IN PARAGRAPH 2 OF THIS ORDER. 5 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 5 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE AO AND CIT(A) AND FURTHER PLACED RELIANCE ON TH E FOLLOWING JUDICIAL PRONOUNCEMENTS : I) RANGAL BAGARIA HUF VS ACIT [2016] 70 TAXMANN. COM 3 41 (CAL) II) CIT VS SONITPUR SOLVEX LTD [2013] 352 ITR 305 (GAUH ATI) III) INDIA STEAMSHIP CO.LTD. VS JCIT 275 ITR 155 (CAL) IV) SABHARWAL PROPERTIES INDUSTRIES P.LTD VS ITO 382 IT R 547 (DEL) 10. IN THE DECISIONS CITED AT SL. NOS.(II) TO (IV) THE COURTS HAVE TAKEN A VIEW THAT WHEN AN ASSESSMENT IS REOPENED BY ISSUE OF A NOTICE U/S 148 OF THE ACT IN THE CASE OF AN ASSESSE WHOSE ASSESSMENT HAS ALREADY COMPLETED U/S 143(3) OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR AND IF NOTICE IS ISSUED BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR THEN THE REASONS RECOR DED SHOULD EXPLAIN AS TO HOW THE ESCAPEMENT OF INCOME IS ON ACCOUNT OF THE FAILURE O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY OF MATERIAL FACTS NECESSARY FOR ASSESSMENT OF THE INCOME OF THAT YEAR. THE LD.DR RELIED ON THE ORDER OF THE CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS FA R AS THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS ARE CONCERNED, IT IS NOTIC ED THAT THE CASE OF THE ASSESSE IS THAT THERE WAS NO FRESH TANGIBLE MATERIAL IN THE POSSESS ION OF AO AT THE TIME OF RECORDING OF REASONS FOR INITIATING PROCEEDINGS U/S.147 OF THE A CT. A PERUSAL OF THE REASONS RECORDED BY THE AO IN THIS CASE REVEALS THAT AT THE TIME OF RECORDING OF THESE REASONS THE AO HAD EXAMINED ORIGINAL ASSESSMENT RECORDS ONL Y AND NO FRESH MATERIAL HAD COME IN THE POSSESSION OF THE AO. IN RESPONSE TO OUR SPE CIFIC QUERY ALSO, LD DR COULD NOT POINT OUT ANY FRESH MATERIAL AVAILABLE WITH THE AO AT THE TIME OF REOPENING OF THE CASE OF THE ASSESSEE. THUS, ASSERTION OF THE ASSESSEE TH AT THERE WAS NO FRESH MATERIAL WITH AO FOR REOPENING OF THIS CASE, REMAINED UNCONTROVERTED . 6 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 6 12. IN THE LIGHT OF THE ABOVE FACTS WITH REGARD TO RECORDING OF REASONS, LET US EXAMINE SETTLED POSITION OF LAW ON THIS ISSUE. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR INDIA LTD. 320 ITR 561 (SC), HAS HELD TH AT FOR REOPENING OF THE ASSESSMENT, THE AO SHOULD HAVE IN ITS POSSESSION TANGIBLE MATE RIAL. THE TERM TANGIBLE MATERIAL HAS BEEN UNDERSTOOD AND EXPLAINED BY VARIOUS COURTS SUBSEQUENTLY. THERE HAS BEEN UNANIMITY OF THE COURTS ON THIS ISSUE THAT IN ABSEN CE OF FRESH MATERIAL INDICATING ESCAPED INCOME, THE AO CANNOT ASSUME JURISDICTION TO REOPEN ALREADY CONCLUDED ASSESSMENT. THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS TUPPERWARE INDIA PVT. LTD., IN ITS ORDER DT 10-8-15 (ITA NO 415/2015 ) HAS TAKEN T HE VIEW THAT THAT EVEN IN THE CASE OF ORIGINAL ASSESSMENT ORDER HAVING BEEN PASSED U/S 14 3(1), IT IS MANDATORY FOR THE AO TO HAVE IN ITS POSSESSION, FRESH TANGIBLE MATERIAL BEF ORE REOPENING OF THE CASE. IN THE CASE OF CIT VS. ORIENT CRAFT LTD. 354 ITR 536, IT WAS HE LD BY HONBLE DELHI HIGH COURT THAT REASONS FOR REASSESSMENT DISCLOSED THAT AO REACHED BELIEF THAT THERE WAS ESCAPEMENT OF INCOME 'ON GOING THROUGH THE RETURN OF INCOME' FILE D BY ASSESSEE AFTER HE ACCEPTED RETURN U/S. 143(1) WITHOUT SCRUTINY, AND NOTHING MO RE. IN THESE FACTS, IT WAS HELD BY THE HONBLE HIGH COURT THAT IT WAS NOTHING BUT REVIEW O F EARLIER PROCEEDINGS AND ABUSE OF POWER BY AO. IT WAS FURTHER HELD THAT SINCE THERE W AS NO WHISPER IN REASONS RECORDED, OF ANY TANGIBLE MATERIAL WHICH CAME TO POSSESSION OF A O SUBSEQUENT TO ISSUE OF INTIMATION, THEREFORE, IT WAS AN ARBITRARY EXERCISE OF POWER CONFERRED U/S 147. THUS, REOPENING WAS HELD TO BE INVALID ON THIS GROUND ITS ELF. 13. THE NEXT ARGUMENT OF THE LD. COUNSEL FOR THE AS SESSEE WAS THAT THE REASONS RECORDED BY THE AO DOES NOT SPELL OUT THAT THE ESCA PEMENT OF INCOME WAS DUE TO ANY FAILURE ON THE PART OF THE ASSESSEE TO TRULY AND FU LLY DISCLOSE MATERIAL FACTS AND THEREFORE THE REOPENING OF ASSESSMENT IS BARRED BY TIME UNDER THE PROVISO TO SEC. 147 OF THE ACT. ON THIS ASPECT THE REASONS RECORDED BY THE AO BEFOR E ISSUING NOTICE U/S.148 OF THE ACT ARE SET OUT IN THE EARLIER PART OF THIS ORDER AND T HE CONTENTION OF THE ASSESSEE IN THIS REGARD IS CORRECT. UNDER THE PROVISO TO SEC.147 OF THE ACT, WHERE AN ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE ACT, AND THEREAFTE R THE AO SEEKS TO TAKE AN ACTION U/S 7 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 7 147 OF THE ACT FOR RE-ASSESSMENT OF INCOME ESCAPING ASSESSMENT AFTER THE PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THAN SUCH PROCEEDINGS CAN BE INITIATED ONLY WHERE INCOME CHARGEABLE TO TAX HAS E SCAPED ASSESSMENT FOR THAT ASSESSMENT BY REASONS OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THA T YEAR. ADMITTEDLY THE ASSESSMENT IN THE PRESENT CASE WAS SOUGHT TO BE RE-OPENED, AFTER EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND AN ORDER OF ASSESSMENT U/S 143(3) HAS ALREADY BEEN PASSED. THE PROCEEDINGS U/S 147 OF THE ACT ARE THEREFORE B ARRED BY TIME. IN THIS REGARD, WE ALSO NOTICE THAT EVEN IN THE REASONS RECORDED THERE IS NO REFERENCE TO THE FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE THE MATERI AL FACTS. 14. WE ARE ALSO OF THE VIEW THAT ADMITTEDLY, THE PR OVISO TO SEC.147 OF THE ACT REFERRED TO IN THE EARLIER PART OF THIS ORDER IS AP PLICABLE IN THE PRESENT CASE SINCE ASSESSMENT FOR AY 2006-07 HAD BEEN COMPLETED BY THE AO ORIGINALLY U/S.143(3) OF THE ACT AND THE REASSESSMENT PROCEEDINGS WERE SOUGHT TO BE INITIATED ON 01.03.2013 BEYOND A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT AS SESSMENT YEAR. THE AO FOR INITIATING THE RE-OPENING OF THE ASSESSMENT PROCEEDINGS BEYOND THE PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR HAS TO ESTABLISH TH AT THERE WAS ESCAPEMENT OF INCOME CHARGEABLE TO TAX BECAUSE OF THE FAILURE OF THE ASS ESSEE TO DISCLOSE FULLY AND TRULY THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. NEITH ER IN THE REASONS RECORDED FOR RE- OPENING THE ASSESSMENT NOR IN THE ORDER OF RE-ASSES SMENT U/S147 OF THE ACT. THE AO HAS NOT BROUGHT OUT FACTS TO SHOW ANY OMISSION ON T HE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY THE MATERIAL FACTS WHEN THE ORIGINA L ASSESSMENT WAS COMPLETED. WE ARE OF THE VIEW THAT THE RE-OPENING OF THE COMPLETED AS SESSMENT U/S 143(3) OF THE ACT BEYOND THE PERIOD OF 4 YEARS CANNOT BE JUSTIFIED. W E HOLD THAT THE RE-OPENING OF THE ASSESSMENT IS BEYOND THE TIME CONTEMPLATED BY THE P ROVISO TO SEC.147 OF THE ACT AND THEREFORE, INITIATION OF RE-ASSESSMENT PROCEEDINGS IS HELD TO BE BAD. THE DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO IN PARAGRAPH 9 AND 10 SUPPORT THE CONCLUSIONS THAT REASSESSMENT PROCEEDINGS ARE NOT V ALID IN LAW. 8 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 8 15. FOR THE REASONS GIVEN ABOVE, WE ALLOW THE GROUN DS RAISED IN THE CROSS OBJECTION AND HOLD THAT THE REASSESSMENT PROCEEDINGS ARE NOT VALIDLY INITIATED . THEREFORE ORDER OF THE REASSESSMENT IS LIABLE TO BE ANNULLED. SINCE TH E RE-ASSESSMENT ORDER HAS BEEN ANNULLED, THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL DOES NOT REQUIRE ANY ADJUDICATION. 16. IN THE RESULT THE CROSS OBJECTION IS ALLOWED AN D THE APPEAL BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 02.02.2018. SD/- SD/- [WASEEM AHMED] [ N.V.VASU DEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.02.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1. M/S. EIH LTD., 4, MANGOE LANE, KOLKATA-700001. 2. D.C.I.T., CIRCLE-8 (1), KOLKATA. 3. CIT(A)-16, KOLKATA 4. C.I.T.-3, KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PR IVATE SECRETARY HEAD OF OFFICE/ D.D.O., ITAT, KOLKATA BENCHE S 9 ITA NO.1707/KOL/2016 & C.O.NO.62/KOL/2016 M/S EIH LTD. A.YR.2006-07 9