DCIT, Panchkula V. M/s Haryana Power Generation Corporation Ltd., Panchkula

ITA 1084/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6923 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 22-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARISH NAYYAR
• Keywords: Assessment record; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1084/CHD/2016 ASSESSMENT YEAR: 2008-09 THE DY. CIT VS. M/S HARYANA POWER GENERATION PANCHKULA CIRCLE CORPORATION LTD. SHAKTI BHAWAN PANCHKULA SECTOR-6, PANCHKULA PAN NO. AABCH4536J (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. HARISH NAYYAR REVENUE BY : SMT. CHANDERKANTA DATE OF HEARING : 03/08/2017 DATE OF PRONOUNCEMENT : 28/08/2017 ORDER PER DR. B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD.CIT(A)-PANCHKULA DT. 01/09/2016. 2. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED TO ALLOWED THE APPEAL OF THE ASSESSEE BY STATING THAT THE REOP ENING OF ASSESSMENT U/S 147 BY ISSUE OF NOTICE U/S 148 IS IN VIOLATION OF THE PROVISION OF SECTION 147 OF THE ACT AND THE PROCEEDING INITIATED FOR REOPENING OF THE ASSESSMENT IS FOUND TO BE INVALID THE SAME IS NOT ACCEPTABLE BECAUSE THE REOPENING THE CASE BY ISSUING NOTICE U/ S 148 IS CORRECT AS PER LAW AND VALID AS PER REASONS GIVEN ABOVE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED TO ALLOWED THE APPEAL OF THE ASSESSEE TO DELETE THE ADDITION O F RS. 1116.31 LACS WHICH IS NOT CORRECT BECAUSE THE ASSESSEE HAS FOLLOWED THE MERCANTILE SY STEM AND IN MERCANTILE SYSTEM THE PRIOR PERIOD EXPENSES IS NOT ALLOWED. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THAT OF THE A.O. BE RESTORED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME ON 30/09/2008 FOR THE AY 2008-09. AN ASSESSMENT U/S 1 43(3) WAS COMPLETED ON 30/11/2010. THE AO HAS RECORDED IN THE ASSESSMENT ORDER THAT ON SUBSEQUENT REVIEW OF THE ASSESSMENT RECORD HE NOTICED THAT THE PURCHASES WOR TH RS. 1116.31 LACS WERE RELATED TO EARLIER YEARS. THE AO ALSO NOTED THAT NO SEPARAT E DISCLOSURE FOR THE PRIOR PERIOD ITEMS 2 FOR PURCHASES WERE FILED OR CALLED BY THE AO DURING THE ORIGINAL ASSESSMENT PROCEEDING. THE AO WAS OF THE OPINION THAT IN VIEW OF THE FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY, TRULY THE FACTS, THE ASSESSEE HAS C LAIMED WRONG/EXCESS EXPENDITURE AND THEREFORE, THE PROCEEDING U/S 147 WERE INITIATED AN D AFTER RECORDING REASONS. NOTICE U/S 148 ISSUED ON 23/02/2013 ON THE REASON AS RECORDED UNDER PARA 2 OF THE ASSESSMENT ORDER. IN RESPONSE, THE ASSESSEE FILED RETURN OF IN COME DECLARING NIL INCOME AS PER EARLIER FILED RETURN. SUBSEQUENTLY, THE AO PROCEEDED WITH T HE REASSESSMENT PROCEEDINGS AND COMPLETED THE ASSESSMENT U/S 143(3) R.W.S 147 AFTER MAKING DISALLOWANCE OF PRIOR PERIOD EXPENSES OF RS. 1116.31 LACS. 4. THE MATTER WENT BEFORE CIT(A) WHEREIN THE NOTICE ISSUED UNDER SECTION 147 WAS TREATED INVALID AND ALSO HELD THAT THE PRIOR PERIOD EXPENSES ARE NOT TO BE DISALLOWED. 5. REVENUE FILED APPEAL BEFORE US. 6. DURING THE APPELLATE PROCEEDING IT WAS BROUGHT T O OUR NOTICE THAT THE AMOUNT OF RS. 1116.31 LACS WHICH IN THE SUBJECT MATTER OF THI S APPEAL STANDS ADDED TO THE COMPUTATION OF TOTAL INCOME. THE TOTAL INCOME ADDED WAS RS. 120254291/- WHICH CONSISTS OF RS. 1116.31 LACS ON ACCOUNT OF PRIOR PE RIOD EXPENSES AND SCHEDULE 26 DISALLOWANCES OF RS. 86,23,291/-. 7. SINCE THE AMOUNT HAS ALREADY BEEN ADDED BACK TO THE TOTAL INCOME THE APPEAL OF THE REVENUE DOESNT SURVIVE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. SD/- SD/- (SANJAY GARG) (DR.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