M/s Shrimal Construction Pvt. Ltd., Jabalpur V. Commissioner Of Income Tax-I, Jabalpur

ITA 102/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1052 (ITAT-JABALPUR)
• Duration Of Justice: 6 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 05-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2013
• Court: TRIBUNAL
• Department Lawyers: D R LAKHORIYA
• Keywords: Period of limitation; Reassessment proceedings
• Section: 143(3); 147; 148; 56; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 102/JAB/2013 A.Y. : 2006-07 M/S. SHRIMAL CONSTRUCTION PVT.LTD., 191, KOTWALI WARD HANUMANTAL, JABALPUR VS CIT - I JABALPUR APPELLANT RESPONDENT PAN NO. : AAGCS3760G APPELLANT BY : SHRI SUMIT NEMA, ADV. RESPONDENT BY : SHRI D.R. LA K HORIYA, DR DATE OF HEARING : 2 0 . 0 5 .201 5 DATE OF PRONOUNCEMENT : 31 . 0 7 .201 5 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-I, JABALPUR, DATED 25.03.2012 FOR THE ASS ESSMENT YEAR 2006-07. 2. THE SHORT FACTS OF THE CASE THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY HAS CARRIED OUT JOB WORK & CONTRACT WORKS EXCLUSIVELY FOR BINANI CEMENT AND H AS DISCLOSED THE TOTAL CONTRACT RECEIPTS TO THE EXTENT OF RS.7,40,91,060/- AND ASSESSMENT FOR THE A.Y. 2007-0 8 WAS COMPLETED U/S 143(3) ON 24/12/2009. THE INCOME ASSE SSED AT RS.14,58,92,670/- AS DISCUSSED IN ASSESSMENT YEAR 2 007-08 , THE ENTIRE JOB WORK RECEIPT WAS RS. 13.02 CRORES RE CEIVED FROM BINANI CEMENT LTD., WAS ASSESSED AS 'INCOME FROM OT HER SOURCES UNDER SECTION 56 AND THE INCOME WAS FINALL Y ASSESSED AT RS. 14,58,92,670/- INCLUDING THE INCOME OF RS. L ,73,22,375/- BEING UNDER STATED BY THE ASSESSEE DIS ALLOWING ALL THE EXPENSES CLAIMED AS BOGUS. AS PER ASSESSMEN T ORDER ALL -: 3: - 3 THE DIRECT EXPENSES OF RS.3.87 CRORES AND RS.8.08 CRORES PAID TO SUB CONTRACTORS WERE TREATED AS BOGUS. IT W AS FURTHER NOTICED THAT THE ASSESSEE COMPANY WAS CARRYING ON T HE JOB WORK, EARTH WORK AND THE TRANSPORTATION OF WASTE RO CKS FOR BINANI CEMENT IN A.Y.2006-07, IN A.Y. 2007-08, WHI CH WAS SIMPLY A CASE OF SIPHONING OFF THE PROFITS BY THE B INANI CEMENT TO THE ASSESSEE COMPANY. THE BINANI CEMENTS LTD., D IVERTED ITS PROFIT BY MAKING HAVALA ENTRIES AND EXPENSES WE RE CLAIMED. THE ENTIRE CONTRACT RECEIPTS OF RS. 7,40,91,060/- R ECEIVED BY THE ASSESSEE COMPANY, WERE REQUIRED TO BE ASSESSED AS INCOME FROM OTHER SOURCES U/S 56 IN THE A.Y. 2006-07 AS MA DE IN THE A.Y. 2007-08 RESULTING IN SHORT LEVY OF TAX OF RS.2 ,10,32,670/- PLUS INTEREST THEREOF. IN REPLY TO SHOW CAUSE NOTIC E, THE ASSESSEE SUBMITTED THAT SECTION 263(2) OF THE INCOM E-TAX ACT, 1961. ACCORDINGLY, THE AO HAS SENT THE PROPOSAL U/ S 263 OF THE INCOME TAX ACT, STIPULATES THAT NO ORDER SHALL BE MADE UNDER SUB SECTION (1) OF SECTION 263 AFTER EXPIRY O F TWO YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE ASSESSM ENT WAS SOUGHT TO BE REVISED WAS PASSED. THE ASSESSMENT REC ORDS OF THE ASSESSEE WERE CALLED FOR AND EXAMINED AND IT WA S FOUND -: 4: - 4 THAT THE ASSESSMENT MADE WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE, SO PROCEEDI NGS U/S 263 OF THE INCOME TAX ACT, 1961 WERE INITIATED BY ISSUI NG A SHOW CAUSE NOTICE DATED 14.01.2011. DUE TO CHANGE OF INC UMBENT THE ASSESSEE WAS GIVEN OPPORTUNITIES TO BE HEARD VI DE THIS OFFICE LETTER/NOTICE DATED 22/01/2013 FIXING THE CA SE FOR HEARING ON 22/01/2013. THE SAID LIMITATION HAS BEEN PASSED ON 31 ST MARCH, 2011. HENCE, THE EXERCISE OF THE REVISIONAL JURISDICTION IN RESPECT OF THE ORIGINAL ORDER OF RE ASSESSMENT IS BARRED BY LIMITATION. THE ORIGINAL ASSESSMENT FOR A . Y. 2006-07 WAS RE-OPENED U/S 148 AND AN ORDER OF RE-ASSESSMENT WAS PASSED ONLY ON ONE ISSUE NAMELY, THE JOB WORK RECEI PT RELATED TO A. Y. 2006-07 CREDITED ON FIRST DAY OF NEXT ACCO UNTING YEAR I.E. A. Y. 2007-08. SINCE, IT IS PROPOSED TO EXERCI SE THE REVISIONAL JURISDICTION ON THE MATTER WHICH DID NOT FORM THE SUBJECT OF THE ORDER OF REASSESSMENT, THE PERIOD OF LIMITATION WOULD BEGIN TO RUN FROM THE ORIGINAL ORDER OF THE A SSESSMENT. THEREFORE, THE PERIOD OF EXERCISING THE JURISDICTIO N U/S 263 EXPIRED ON 31/03/2011. THE ASSESSEE HAS PLACED RELI ANCE ON CIT VS ALGENDRAN FINANCE LTD (2007) 293 ITR 001 (SC ) AND -: 5: - 5 HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASHOKA BU ILDCON LTD. VS. ACIT (2010)325 ITR 0574. THE COMMISSIONER AFTER EXAMINATION AND CONSIDERING THE REPLY BY THE ASSESS EE WAS OF THE VIEW THAT THE ASSESSMENT ORDER PASSED FOR ASSES SMENT YEAR 2006-07 WAS REOPENED U/S 148 OF THE ACT ON THE GROU ND THAT THE JOB WORK RECEIPT FROM BINANI CEMENT HAS NOT BEE N NOT PROPERLY ACCOUNTED BY THE ASSESSEE AND NOT SHOWING THE CORRECT AMOUNT ON RECEIPT FROM BINANI CEMENT. THERE FORE, THE ASSESSMENT ORDER PASSED IS PREJUDICIAL TO THE INTER ESTS OF THE REVENUE AND SET-ASIDE WITH THE DIRECTION OF THE AO TO PASS A FRESH ORDER AFTER EXAMINING THE RELEVANT FACTS OF T HE CASE KEEPING IN VIEW THE VARIOUS PROVISIONS OF THE ACT A FTER GIVING DUE OPPORTUNITY OF HEARING. 3. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT TH E ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006-07 WAS PA SSED U/S 143(3) DATED 1.1.2008, WHICH IS PLACED ON PAGES 1 TO 4 OF THE PAPER BOOK. SIMILARLY, THE REASSESSMENT ORDER A FTER ISSUE OF NOTICE U/S 147 WHICH IS ON PAGE 5 7 OF THE PAP ER BOOK IS PASSED ON 31.12.2010. THE NOTICE DATED 14.1.2013 IS AT PAGE 8 -9 OF THE PAPER BOOK. THE 263 ORDER WAS PASSED ON 2 5 TH MARCH, -: 6: - 6 2013. WE FIND THAT IN THE DECISION OF HON'BLE SUPRE ME COURT IN THE CASE OF CIT VS. ALGENDRAN FINANCE LIMITED, (2007) 293 ITR 001 ( S. C. ), HAS HELD AS UNDER :- THEREFORE, KEEPING IN VIEW THE FACTS AND CIRCUMSTA NCES OF THE INSTANT CASE AND, IN PARTICULAR, HAVING REGA RD TO THE FACT THAT THE COMMISSIONER EXERCISING ITS REVIS IONAL JURISDICTION REOPENED THE ORDER OF ASSESSMENT ONLY IN RELATION TO LEASE EQUALIZATION FUND WHICH, WAS NOT E SUBJECT OF THE REASSESSMENT PROCEEDINGS, THE PERIOD OF LIMITATION FOR UNDER SUB-SECTION (2) OF SECTION 263 WOULD BEGIN TO RUN THE DATE OF THE ORDER OF ORIGINAL ASSE SSMENT AND NOT FROM THE OF REASSESSMENT. THE REVISIONAL JURISDICTION, HAVING, THUS, BEEN INVOKED BY THE COMMISSIONER BEYOND THE PERIOD OF LIMITATION, IT WA S WHOLLY WITHOUT JURISDICTION, RENDERING THE ENTIRE PROCEEDING A NULLITY. 4. SIMILARLY, IN THE CASE OF ASHOK BULDCON LIMITED VS. ACIT, (2010) 325 ITR 0574 IN WHICH IT WAS HELD AS U NDER :- -: 7: - 7 WHERE AN ASSESSMENT HAS BEEN REOPENED UNDER SECTION 147 IN RELATION TO A PARTICULAR GROUND OR I N RELATION TO CERTAIN SPECIFIED GROUNDS AND SUBSEQUEN T TO THE PASSING OF THE ORDER OF REASSESSMENT, THE JURISDICTION UNDER SECTION 263 IS SOUGHT TO BE EXERCISED WITH REFERENCE TO ISSUES WHICH DID NOT FO RM THE SUBJECT OF THE REOPENING OF THE ASSESSMENT OR T HE ORDER OF REASSESSMENT, THE PERIOD OF LIMITATION PROVIDED FOR IN SUB-SECTION (2) OF SECTION 263 WOUL D COMMENCE FROM THE DATE OF THE ORDER OF ASSESSMENT AND NOT FROM THE DATE ON WHICH THE ORDER REOPENING THE REASSESSMENT HAS BEEN PASSED' 5. NOW FOLLOWING THE DECISION OF HON'BLE SUPREME COURT AND HON'BLE BOMBAY HIGH COURT, WE FIND THAT SUB SEC TION (2) OF SECTION 263 STIPULATES THAT NO ORDER SHALL BE MA DE UNDER SUB SECTION (1) AFTER EXPIRY OF TWO YEARS FROM THE END OF FINANCIAL YEAR. THE ORDER WAS TO BE REVISED WAS PA SSED. THAT THE PERIOD OF TWO YEARS FROM THE END OF THE FINANCI AL YEAR IN WHICH THE ORDER DATED 8.8.2008 WAS PASSED HAS EXPIR ED ON -: 8: - 8 8.8.2010. THE REVISIONAL JURISDICTION IN RESPECT OF ORIGINAL ASSESSMENT ORDER WAS BARRED BY LIMITATION. THE ORIG INAL ASSESSMENT ORDER WAS REOPENED U/S 147 ON ONE GROUND THAT THE JOB WORK RECEIPT WAS NOT ACCOUNTED IN ONE YEAR AND THE RECEIPT WAS ACCOUNTED IN THE SUBSEQUENT YEAR. WHERE AN ASSESSMENT IS REOPENED U/S 147 IN RELATION TO A JOB WORK RECEIPT AND IT IS REOPENED ON SPECIFIED GROUND AND SUBSEQUENT TO PASSING THE ORDER OF REASSESSMENT, THE JURISDICT ION U/S 263 HAS TO BE EXERCISED WITH REFERENCE TO THE ISSUE WHI CH DID NOT FORM SUBJECT MATTER OF REOPENING OF THE ASSESSMENT ORDER. PERIOD OF LIMITATION OF SUB SECTION (2) OF SECTION 263 WAS COMMENCED FROM THE DATE OF ORIGINAL ASSESSMENT ORDE R. WE FIND THAT IN THIS ASSESSMENT ORDER, THE ISSUE RELAT ES TO JOB WORK RECEIPT. THEREFORE, WE ARE OF THE VIEW THAT NO TICE U/S 263 IS BARRED BY LIMITATION. THEREFORE, FOLLOWING THE A BOVE DECISIONS, WE ARE OF THE VIEW THAT THE LD. CITS OR DER IS BARRED BY LIMITATION. -: 9: - 9 6. IN THE RESULT, WE ALLOW THE APPEAL OF THE ASSESSEE. THIS ORDER IS PRONOUNCED IN ACCORDANCE WITH RULE 34(4) OF I.T.A.T. RULES, BY PUTTING THE COPY OF THE SAME ON NOTICE BOARD ON 31 ST JULY, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 31 ST JULY, 2015. CPU* 1331