M/s. Tonira Pharma Ltd., Baroda V. The Income tax Officer,Ward-4(4), Baroda

ITA 1029/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1072 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Presumptive income; Depreciation; Principle of natural justice; Tangible material; Difference of opinion; Revised return; Reason to believe; Unabsorbed depreciation; Change of opinion; Reassessment proceedings
• Section: 143(3); 10B; 147; 148; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., , !' BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. ./ I.T.A. NO.1029/AHD/2012 2. ( ./ I.T.A. NO.1033/AHD/2012 ( / ASSESSMENT YEAR : 2005-06) 1. TONIRA PHARMA LTD. PLOT NO.23-24, GIDC ESTATE NANDESARI BARODA 391 340 2. ITO WARD-4(4) BARODA / VS. 1. ITO WARD-4(4) BARODA 2. TONIRA PHARMA LTD., BARODA $ ./ ./ PAN/GIR NO. : AABCT 0638 F ( $' / APPELLANTS ) .. ( ()$' / RESPONDENTS ) ASSESSEE BY : SHRI S.N. SOPARKAR, AR RE VENUE BY : SHRI SANJAY KUMAR, SR.DR *+ / DATE OF HEARING 24/06/2016 ,-.+ / DATE OF PRONOUNCEMENT 18/07/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THESE CROSS-APPEALS BY THE ASSESSEE AND THE REVEN UE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 2 - AHMEDABAD DATED 10/02/2012 PASSED FOR ASSESSMENT YE AR (AY) 2005- 06. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- 2.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF BULK DRUGS, DRUG INTERMEDIATES AND FINE CHEMICALS. IT FILED ITS ORIGINAL RETURN OF INCOME FOR AY 2005-06 ON 30.10.2005 DECLARING TOTAL INCOME OF RS.NIL AFTER CLAIMING DED UCTION OF RS.2,29,49,023/- U/S 10B OF THE ACT. ASSESSEE SUB SEQUENTLY ON 31.3.2007 FILED REVISED RETURN OF INCOME WHEREIN IT REVISED THE CLAIM OF DEDUCTION U/S 10B TO RS.2,54,98,915/- WITH TOTAL TA XABLE INCOME AT NIL. THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') VIDE OR DER DATED 24.12.2007 WHEREBY THE ASSESSEES CLAIM OF DEDUCTION OF RS.2,5 4,98,915/- U/S.10B OF THE ACT WAS DENIED. AGGRIEVED BY THE ORDER OF AS SESSING OFFICER (AO), ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A) WHO VIDE ORDER DATED 25.2.2008 (IN APPEAL NO CAB/III/235/07-08) ALLOWED THE APPEAL OF THE ASSESSEE. THEREAFTER NOTICE U/S 148 OF THE ACT WAS ISSUED ON 19.8.2009 AND IN RESPONSE TO WHICH ASSESSEE FILED THE RETURN OF INCOME ON 29.9.2009, WHEREIN ASSESSEE CLAIMED EXEMPTION OF R S.2,54,98,915/- U/S 10B OF THE ACT. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) RWS 147 OF THE ACT VIDE ORDER DATED ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 3 - 22.10.2010 AND THE TOTAL INCOME WAS DETERMINED AT R S.2,00,68,720/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DATED 10.2.2012 (IN APPEAL NO . CAB/III-148/10- 11) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEV ED BY THE ORDER OF CIT(A), REVENUE AND ASSESSEE ARE NOW IN APPEAL BEFO RE US. THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL (ITA NO.1029/A HD/2012) READS AS UNDER:- 1. LD. CIT (A) ERRED IN LAW AND ON THE FACTS IN CONFI RMING ACTION OF AO IN FRAMING ASSESSMENT U/S 143 (3) R.W.S. 147 OF THE ACT, WHEN ALL THE RELEVANT MATERIAL FACTS DISCLOSED IN THE ORIGINAL R ETURN OF INCOME WAS SUBJECTED TO SCRUTINY ASSESSMENT. LD.CIT(A) OUGHT T O HAVE HELD THAT AO IS NOT EMPOWERED TO REOPEN A CONCLUDED ASSESSMEN T IN ABSENCE OF ANY FRESH MATERIAL SIMPLY ON CHANGE OF OPINION. LD.CIT(A) OUGHT TO HAVE ACCEPTED CONTENTION OF THE APPELLANT BY QUA SHING REASSESSMENT ORDER. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING VIEW TAKEN BY AO WITH REGARD TO TWO PRODUCTS THAT WORK IN PROGRESS ( W1P) TRANSFERRED BY THE GENERAL UNIT TO EOU UNIT WAS ALMOST A FINAL PRODUCT AND NO MANUFACTURING OR PRODUCTION OF ARTICLE HAD TAKEN PL ACE IN EOU UNIT. LD. CIT(A) ERRED IN DIRECTING AO TO DENY DEDUCTION U/S 10B OF THE ACT BY TAKING RECOURSE TO EARLIER DECISION OF THE H ON'BLE IT AT WITHOUT DIFFERENTIATING WITH THE FACTS OF THE YEAR UNDER CONSIDERATION. THIS ACTION OF ID. CIT(A) IS UNJUST, UNLAWFUL AND A GAINST THE PRINCIPLES OF NATURAL JUSTICE THAT DESERVES TO BE Q UASHED AND DEDUCTION CLAIMED BE GRANTED ON ALL PRODUCTS TRANSF ERRED. 3. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE VIEW TAKEN BY AO THAT PROFIT MARGIN OF 10% CHARGED ON TRANSFER OF INTERMEDIATES ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 4 - BY THE GENERAL UNIT TO EOU UNIT WAS TO CLAIM EXCESS DEDUCTION U/S 10B OF THE ACT. LD. CIT (A) OUGHT TO HAVE ACCEPTED 10% PROFIT MARGI N THAT WAS PER CENTRAL EXCISE VALUATION IN ABSENCE OF ANY COMPARAB LES THAN HOLDING THAT TO BE A PRESUMPTIVE TAXATION RATE FOR LEVY OF EXCISE DUTY. 4. LD. CIT (A) FURTHER ERRED IN LAW AND ON FACTS I N RECOMPUTING THE PROFITS OF BOTH THE UNITS ON ESTIMATE BASIS BY DIST RIBUTING GP RATIO EQUALLY BETWEEN THE UNITS. LD.CIT (A) DESPITE ADMIT TING THAT MARKET VALUE OF WIP WAS NOT DETERMINABLE DIRECTED AO TO CO MPUTE DEDUCTION U/S 10B OF THE ACT ON THE BASIS OF 50% DI STRIBUTION OF PROFITS IN BOTH THE UNITS. THIS DIRECTION OF ID. CI T (A) IS PERVERSE, ERRONEOUS AND AGAINST ACCOUNTANCY PRINCIPLES THAT D ESERVES TO BE QUASHED. 5. LD.CIT (A) ERRED IN LAW AND ON FACTS IN DIREC TING AO TO GRANT ONLY 90% OF PROFITS OF BUSINESS AS DEDUCTION U/S 10 B OF THE ACT INTERPRETING PROVISO TO SECTION 10B INSERTED BY FIN ANCE ACT 2002 W.E.F. 1-4-2003 TO BE APPLICABLE TO THE YEAR UNDER CONSIDERATION. LD. CIT (A) OUGHT TO HAVE DIRECTED AO TO GRANT 100% DED UCTION IN LIGHT OF DEPARTMENTAL CIRCULAR NO. 8 OF 2002 CLARIFYING T HAT DEDUCTION @ 90% WAS ONLY FOR A.Y. 2003/04. 6. LD. CIT (A) ERRED IN LAW AND ON FACTS IN D IRECTING AO TO EXCLUDE NET PROFIT ATTRIBUTABLE TO SALE OF 2 PRODUC TS NAMELY BENZARORIE PURE AND DI ACID FROM BOOK PROFITS FOR C OMPUTING ALLOWABLE DEDUCTION U/S 10B OF THE ACT THAT OUGHT T O HAVE BEEN WITH REFERENCE TO PROFITS AND GAINS OF BUSINESS AS COMPU TED UNDER THE PROVISIONS OF INCOME TAX ACT. THIS DIRECTION TO AO BY LD.CIT(A) DESERVES TO BE MODIFIED. 7. LEVY OF INTEREST U/S.234B & 234C OF THE ACT IS N OT JUSTIFIED. ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 5 - 8. INITIATION OF PENALTY U/S.271(1)(C) OF THE ACT I S NOT JUSTIFIED. 2.2. ON THE OTHER HAND, THE GROUNDS RAISED BY TH E REVENUE IN ITS APPEAL (ITA NO.1033/AHD/2012 ) READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED C1T(A) HAS ERRED IN DELETING THE DISALLOWANCE U/S 1 0B OVERLOOKING THE NEW FACTS BROUGHT IN BY THE AO REGARDING EXPENSES I NCURRED JOINTLY AND APPORTIONED BETWEEN THE GENERAL UNIT AND E.O.U. UNI T, THUS THE DEDUCTION U/S 10B IS NOT ALLOWABLE TO THE ASSESSEE AS THE ASSESSEE DOES NOT FULFILL THE CONDITION OF SECTION 10B OF THE ACT . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE AO NOT TO SET OFF THE LOSS AND DEPRECIATION INCLUDING UNABSORBED DEPRECIATION OF T HE NON-ELIGIBLE UNITS AGAINST THE PROFITS OF THE ELIGIBLE UNITS, WH ILE DETERMINING DEDUCTION U/S 10B OF THE ACT EVEN THOUGH SECTION 10 B DOES NOT PROVIDE SO. 3. WE FIRST TAKE UP ASSESSEES APPEAL IN ITA NO .1029/AHD/2012. 3.1. BEFORE US, AT THE OUTSET THE LD AR SUBMITTED T HAT ASSESSEE IS CHALLENGING THE REOPENING OF THE ASSESSMENT AND THE OTHER ADDITIONS MADE IN THE REASSESSMENT PROCEEDINGS. HE SUBMITTED THAT IF THE ISSUE OF REOPENING OF ASSESSMENT IS DECIDED IN FAVOUR OF THE ASSESSEE THEN THE OTHER GROUNDS RAISED ON THE MERITS OF THE ADDITION WILL NOT REQUIRE ANY ADJUDICATION AS THEY WOULD BE RENDERED ACADEMIC. HE THEREFORE SUBMITTED THAT HE WOULD FIRST ARGUE ON THE VALIDITY OF REOPEN ING OF ASSESSMENT. ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 6 - 3.2. LD.AR SUBMITTED THAT IN THE ORIGINAL AS WELL AS THE REVISED RETURN OF INCOME, ASSESSEE HAD CLAIMED EXEMPTION U/S 10B OF THE ACT. IN THE SCRUTINY ASSESSMENT THAT WAS FRAMED ON 24.3.2007 TH E ASSESSEE WAS DENIED THE CLAIM OF DEDUCTION BUT HOWEVER IN THE AP PEAL BEFORE CIT(A) THE CLAIM OF DEDUCTION U/S.10B OF THE ACT WAS ALLOW ED. FROM THE REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT (TH E COPY OF WHICH IS PLACED ON PAGE-1 OF THE PAPER BOOK) HE POINTED OUT THAT ACCORDING TO THE AO, IN VIEW OF THE CARRIED FORWARD LOSSES, THE CLAI M OF EXEMPTION U/S 10B OF THE ACT WAS WRONGLY COMPUTED. THE LD.AR TH EREFORE SUBMITTED THAT WHEN THE CLAIM OF EXEMPTION U/S 10B HAS ITSELF BEEN DENIED BY THE AO, THE REASON THAT ASSESSEE HAS CLAIMED WRONG DEDU CTION U/S 10B AND THEREBY THERE HAS BEEN ESCAPEMENT OF INCOME, THEREF ORE CANNOT BE THE VALID REASON FOR REOPENING THE ASSESSMENT AND IN SU CH A SITUATION THE REOPENING WAS ITSELF INVALID AND BAD IN LAW AS THE REASON FOR REOPENING DOES NOT HAVE ANY LIVE NEXUS WITH THE MATERIAL ON R ECORD. LD.AR FURTHER SUBMITTED THAT ON SIMILAR FACTS AND IN ASSESSEES O WN CASE FOR AY 2004- 05, THE ASSESSEES CLAIM FOR EXEMPTION U/S 10B WAS ALLOWED BY THE TRIBUNAL VIDE ORDER DATED 14.10.2015 AND IN SUPPORT OF WHICH HE PLACED ON RECORD THE COPY OF THE AFORESAID ORDER OF TRIBUN AL. HIS SECOND ARGUMENT WAS THAT AGAINST THE ORDER PASSED BY THE AO, ASSESSEE HAD CARRIED THE MATTER BEFORE CIT(A) WHO HAD DECIDED TH E ISSUE. HE THEREFORE SUBMITTED THAT IN RESPECT OF THE ITEM FOR WHICH THE ASSESSMENT IS ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 7 - SOUGHT TO BE REOPENED HAD MERGED WITH THE ORDER OF CIT(A) AND THEREFORE HAD NO INDEPENDENT EXISTENCE AND IN SUCH A SITUATIO N THE AO CANNOT PROCEED FOR REOPENING THE ASSESSMENT OF SUCH ISSUES . HE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS NIRM A LTD. (2014) 47 TAXMANN.COM 415 (GUJ.) AND ALSO PLACED ON RECORD TH E COPY OF THE AFORESAID DECISION. HE THEREFORE SUBMITTED THAT THE REASSESSMENT ORDER BE QUASHED. LD DR ON THE OTHER HAND SUPPORTED THE ORDE R OF AO AND CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RES PECT TO REOPENING OF ASSESSMENT. 4.1. IT IS A SETTLED POSITION OF LAW THE REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT IS A NECESSARY PRECONDITION FOR THE AO TO ASSUME JURISDICTION AND SUCH REASONS TO BELIEVE THAT INCOM E OF AN ASSESSEE HAS ESCAPED ASSESSMENT MUST BE ON THE BASIS OF TANGIBLE MATERIAL OR INFORMATION AND THAT THE REASON TO BELIEVE MUST BE BASED ON TANGIBLE MATERIAL AND COGENT FACTS AND THE POWERS UNDER SECT ION 147 OF THE ACT CANNOT BE EXERCISED MERELY ON SUSPICION OR ON AN AP PREHENSION THAT THE INCOME OF AN ASSESSEE HAS ESCAPED ASSESSMENT. A BON A FIDE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IS A NEC ESSARY PRE-CONDITION THAT CLOTHES THE AO WITH THE POWER TO REOPEN THE AS SESSMENT, WHICH HAS ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 8 - OTHERWISE ATTAINED FINALITY. THE REASONS TO BELIEVE MUST HAVE A DIRECT NEXUS AND A LIVE LINK WITH THE FORMATION OF AN O PINION BY THE AO THAT TAXABLE INCOME OF AN ASSESSEE HAS ESCAPED ASSESSMEN T. WHEN THE FACT OF THE PRESENT CASE ARE SEEN IN THE LIGHT OF THE AFORE SAID, IT IS SEEN THAT IT IS AN UNDISPUTED FACT THAT ASSESSEE HAD CLAIMED EXEMPT ION U/S 10B OF THE ACT BUT THE SAME WAS DENIED BY THE AO IN THE ASSESS MENT ORDER FRAMED UNDER SECTION 143(3) OF THE ACT. THEREAFTER THE RE ASSESSMENT WAS OPENED BY ISSUING NOTICE U/S 148. THE COPY OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT DATED 11.8.2009 WHICH IS PLACED AT P AGE-1 OF THE PAPER BOOK REVEALS THAT THE REASON FOR REOPENING WAS WRON G CLAIM OF EXEMPTION U/S 10B OF THE ACT. THUS IT CAN BE SEEN THAT ON ON E HAND THE AO HAS DENIED THE CLAIM OF EXEMPTION U/S 10B OF THE ACT A ND ON THE OTHER HAND THE REASONS RECORDED FOR REOPENING INDICATES THE WR ONGLY ALLOWING OF THE CLAIM OF DEDUCTION U/S.10B OF THE ACT WHICH BEING CONTRARY TO EACH OTHER AND IN SUCH A SITUATION WE HAVE NO HESITATION IN ST ATING THAT REASON TO BELIEVE BY THE AO THAT THE ASSESSEES INCOME HAD ES CAPED ASSESSMENT IS ON ERRONEOUS FACTUAL BASIS. FURTHER IT IS ALSO A FA CT THAT AGAINST THE ORDER OF AO, ASSESSEE HAD CARRIED THE MATTER BEFORE CIT(A ), WHO HAD CONSIDERED THE ISSUE AND IN SUCH A SITUATION IT CAN BE SAID THAT THE ASSESSMENT ORDER IN RESPECT OF WHICH ASSESSMENT WAS REOPENED HAD MERGED WITH THE ORDER OF CIT(A) AND THE ASSESSMENT ORDER OF AO HAD NO INDEPENDENT EXISTENCE AND IN SUCH A SITUATION THE A SSESSMENT ORDER COULD NOT BE REOPENED IN RESPECT OF THOSE ITEMS AND FOR T HIS PROPOSITION WE RELY ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 9 - ON THE DECISION RENDERED BY HONBLE GUJARAT HIGH CO URT IN THE CASE OF UNITED PHOSPHOROUS LTD VS ADDL.CIT (SPECIAL CIVIL A PPLICATION NO 3352 OF 2001 ORDER DATED 8.3.2011 WHEREIN THE HONB LE HIGH COURT HAS OBSERVED AS UNDER:- 14. APART FROM THE AFORESAID POSITION, A PERUSAL O F THE STATEMENT SHOWING ALLOCATION OF INCOME AND EXPENSES TO ELIGIB LE UNITS AND NON- ELIGIBLE UNITS FOR DEDUCTION UNDER SECTION 801 AND 80IA OF THE ACT (ANNEXURE 'F' TO THE REJOINDER AFFIDAVIT) CLEARLY S HOWS THAT THE OTHER INCOME TO THE TUNE OF RS.100,336,210/- HAD NOT BEEN TAKEN INTO CONSIDERATION WHILE COMPUTING DEDUCTION UNDER SECTI ON 801 AND 80IA OF THE ACT. THUS, THE REASONS RECORDED PROCEED ON AN E RRONEOUS FACTUAL PREMISE THAT THE OTHER INCOME HAD BEEN INCLUDED WHI LE ALLOWING DEDUCTION UNDER SECTION 801 OF THE ACT. THE THIRD G ROUND FOR REOPENING VIZ., THAT DEDUCTION UNDER SECTION 80IA OF THE ACT IS NOT ALLOWABLE ON 'INCOME FROM OTHER SOURCES' ALSO PROCEEDS ON A FACT UALLY ERRONEOUS BASIS AS AFORESAID. AS REGARDS THE SECOND GROUND FO R REOPENING VIZ., EXCISE DUTY REFUND, DUTY DRAWBACK AND CASH ASSISTAN CE RECEIVABLE HAVE BEEN CHARGED TO TAX VIDE SECTION 28(II)(C) AND WERE REQUIRED TO BE EXCLUDED WHILE WORKING OUT DEDUCTION UNDER SECTION 80/80IA , THE SAID ISSUE HAD BEEN DULY CONSIDERED AT THE TIME OF FRAMI NG THE ORIGINAL ASSESSMENT AND WAS ALSO SUBJECT MATTER OF APPEAL BE FORE THE COMMISSIONER (APPEALS). 15. IN THE LIGHT OF THE AFORESAID DISCUSSION IT IS APPARENT THAT THE ASSESSMENT ORDER IN RESPECT OF THE ITEMS FOR WHICH ASSESSMENT IS SOUGHT TO BE REOPENED HAS MERGED WITH THE ORDER OF COMMISS IONER (APPEALS) AND AS SUCH HAS NO INDEPENDENT EXISTENCE AND THEREF ORE THE ASSESSMENT COULD NOT BE REOPENED IN RESPECT OF THE SAID ITEMS, MOREOVER, THE REOPENING OF ASSESSMENT APART FROM BEING BASED ON A FACTUALLY ERRONEOUS PREMISE, IS ALSO BASED UPON A MERE CHANGE OF OPINION ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 10 - WITHOUT THERE BEING ANY TANGIBLE MATERIAL TO COME T O THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. HENC E IN VIEW OF THE LAW LAID DOWN BY THE SUPREME COURT IN THE CASE OF C OMMISSIONER OF INCOME-TAX V. KELVINATOR OF INDIA LTD., [2010] 320 ITR 561 (SC) THE CONDITION PRECEDENT FOR REOPENING OF ASSESSMENT HAS NOT BEEN FULFILLED AND AS SUCH, THE ASSUMPTION OF JURISDICTION UNDER S ECTION 147 OF THE ACT IS NOT VALID. THE IMPUGNED NOTICE ISSUED UNDER SECT ION 148 OF THE ACT, THEREFORE, CANNOT BE SUSTAINED. 4.2. WE FURTHER FIND THAT ON THE ISSUE OF CLAIM O F EXEMPTION U/S 10B OF THE ACT IN ASSESSEES OWN CASE FOR AY 2004-05, THE CLAIM OF EXEMPTION WAS ALLOWED IN ASSESSEES FAVOUR BY THE CO-ORDINATE BENCH OF THE TRIBUNAL. THERE IS NOTHING ON RECORD TO SHOW THA T AGAINST THE ORDER OF THE COORDINATE BENCH, THE MATTER WAS CARRIED BY REV ENUE BEFORE THE HONBLE HIGH COURT AND HONBLE HIGH COURT HAS DECID ED THE ISSUE IN REVENUES FAVOUR WHICH WOULD THEREFORE MEAN THAT TH E ISSUE HAS ATTAINED FINALITY. IN SUCH A SITUATION AND CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT IN THE FACTS OF THE PRESENT CASE, NO NOTICE U/S 148 COULD BE ISSUED AND CONSEQUENTLY THE ORDER PAS SED U/S 143(3) RWS 147 OF THE ACT WAS WITHOUT JURISDICTION AND THEREFO RE UNSUSTAINABLE AND THEREFORE SET ASIDE. THUS THIS GROUND OF ASSESSEE I S ALLOWED. SINCE THE ORDER PASSED U/S.143(3) R.W.S 147 HAS BEEN SET ASI DE, IN OUR VIEW THE OTHER GROUNDS RAISED BY THE ASSESSEE HAVE BEEN REND ERED ACADEMIC AND THEREFORE REQUIRES NO ADJUDICATION AND THEREFORE DI SMISSED AND FOR SAME REASONS THE GROUNDS RAISED BY THE REVENUE ARE ALSO DISMISSED. ITA NO. 1029/AHD/2012 (BY ASSESSEE ) 1033/AHD/2012 (BY REVENUE) TONIRA PHARMA LTD. VS. ITO ASST.YEAR 2005-06 (CROSS-APPEALS) - 11 - 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF REVENUE IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18 /07/2016 SD/- SD/- .. () () ( R.P. TOLANI ) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 18/ 07 /2016 2..,.../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ()$' / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-III, BARODA 5. 789(45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 9;<* / GUARD FILE. / BY ORDER, )7( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. (WORD PROCESSED BY HONBLE AM IN HIS COMPUTER) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 8/7/16 & 15.7.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.18.7.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.7.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER