Crecent Marine Ventures Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1110/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90331 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 30-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: N V BALAJI
• Section: 43B; 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , ! ' , # $% & [BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER] ./ I.T.A.NO.1110/MDS/2014 / ASSESSMENT YEAR : 2003-04 M/S CRESCENT MARINE VENTURES LTD NO.216B, ENNORE COASTAL HIGH ROAD KALADIPET, CHENNAI 600 019 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I(3) CHENNAI [PAN AAACC 2139D] ( '( / APPELLANT) ( ')'( /RESPONDENT) / APPELLANT BY : SHRI N.V.BALAJI, ADVOCATE /RESPONDENT BY : DR. B. NISCHAL, JCIT / DATE OF HEARING : 25-05-2015 ! / DATE OF PRONOUNCEMENT : 25-05-2015 * / O R D E R PER D. KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(A)(C)-II, CHENNAI, DATED 31.1.2014 FOR THE ASSESSMENT YEAR 2003-04. ITA NO.1110/14 :- 2 -: 2. THE ASSESSEE, ENGAGED IN TRADING AND PROCESSING OF MARINE PRODUCTS, FILED ITS RETURN OF INCOME FOR THE ASSESS MENT YEAR 2003-04 DECLARING A TOTAL LOSS OF ` 81,88,803/-. THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF ` 32,33,200/-. THIS ASSESSMENT WAS MADE U/S 143(3) R.W.S 147 OF THE INCOME-TAX ACT, 1961. THE ASSESSING OFFICER RECORDED THE REASONS FOR REOPENING THE ASSESSMENT. THE SAID REASONS ARE PLACED AT PAGE 1 OF THE PAPER BOOK FILED BY THE ASSESSEE. BRINGING OUR ATTENTION TO THE REASONS, THE LD. COUN SEL SUBMITTED THAT ASSESSMENT WAS REOPENED FOR TWO REASONS (I) FOR T AXING A SUM OF ` 12,82,130/- BEING THE COMMISSION RECEIPTS; AND (II) FOR INVOKING THE PROVISIONS OF SECTION 43B IN RESPECT OF AN AMOUNT O F ` 3,56,160/- BEING THE SALES TAX PAYABLE. IN THE RE-ASSESSMENT, THE A SSESSING OFFICER DID NOT MAKE ANY ADDITION WITH REGARD TO THE FIRST ISSU E. HOWEVER, THE ASSESSING OFFICER DISALLOWED A SUM OF ` 3,56,160/- WHILE MAKING THE RE-ASSESSMENT. THE ASSESSING OFFICER ALSO MADE OTH ER ADDITIONS IN THE RE-ASSESSMENT WHICH ARE NOT MENTIONED IN THE SAID R EASONS. IT WAS SUBMITTED THAT THE RE-ASSESSMENT ORDER WAS CHALLENG ED BEFORE THE CIT(A), WHO GRANTED RELIEF IN RESPECT OF THE SAID A DDITION OF ` 3,56,160/-. FURTHER, BRINGING OUR ATTENTION TO PAG E 7 OF THE PAPER BOOK, THE LD. COUNSEL SUBMITTED THAT AFTER DUE VERI FICATION AND COMPLIANCE OF THE ORDER OF THE CIT(A), A MODIFICATI ON ORDER DATED ITA NO.1110/14 :- 3 -: 12.5.2015 WAS PASSED GIVING EFFECT TO THE ORDER OF THE CIT(A). THE SAID ADDITION OF ` 3,56,160/- WAS DELETED BY THE ASSESSING OFFICER. THUS, THIS ADDITION CONSTITUTES AN UNSUSTAINABLE A DDITION MADE IN THE RE-ASSESSMENT. FURTHER, THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE SUM OF ` 3,56,160/- IS FINALLY DELETED AND THE REVENUE HAS NOT FILED ANY APPEAL BEFORE THE TRIBUNAL ON THIS AD DITION OF ` 3,56,160/-. 3. NARRATING THE ABOVE FACTS AND DEVELOPMENT, THE LD. COUNSEL SUBMITTED THAT THE PRESENT RE-ASSESSMENT IS NULL AN D VOID AS THE ASSESSING OFFICER FAILED TO MAKE ANY SUSTAINABLE AD DITION IN THE RE- ASSESSMENT AS PER REASONS FOR WHICH, THE ASSESSMENT WAS REOPENED. THE ADDITION MADE U/S 43B REMAINED UNSUSTAINABLE A ND, THEREFORE, THE OTHER ADDITIONS MADE BY THE ASSESSING OFFICER I N THE RE-ASSESSMENT ARE NOT VALID. TO SUPPORT THE SAME, THE LD. COUNSE L BROUGHT OUR ATTENTION TO THE JUDGMENT OF HON'BLE BOMBAY HIGH CO URT IN THE CASE OF CIT VS JET AIRWAYS (INDIA) LTD [2011] 331 ITR 236 A ND HON'BLE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD VS CIT [2011] 336 ITR 136, FOR THE PROPOSITION THAT ASSESSMENT SHOULD BE VALIDLY REOPENED FOR BRINING CONCEALED INCOME TO TAX. WHEN THE REASONS ON WHICH RE-ASSESSMENT PROCEEDINGS WERE INITIATED, WER E NOT FOUND PRIMA FACIE VALID, THE ASSUMPTION OF JURISDICTION U/S 14 8 R.W.S 147 BECOMES ITA NO.1110/14 :- 4 -: INVALID AND CONSEQUENTLY, THE RE-ASSESSMENT ORDER P ASSED IN PURSUANCE THERETO ALSO BECOMES INVALID. IN THE PRE SENT CASE, AS THE ASSESSING OFFICER FAILED TO MAKE ANY VALID ADDITION S BASED ON THE REASONS RECORDED, THE OTHER ADDITIONS, MAY BE SUST AINABLE ONES, MADE BY THE ASSESSING OFFICER ARE UNSUSTAINABLE AS THE R EOPENING IS NOT VALID. FOR THIS PROPOSITION, THE LD. COUNSEL ALSO BROUGHT OUR ATTENTION TO THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF ITO VS SHRI A.T. KRISHNAKUMAR IN I.T.A.NO. 2021/MDS/2011 DATED 31.5. 2012, WHERE RELIEF WAS GRANTED FOR THE ASSESSEE UNDERLINING ON THE JUDGMENT IN THE CASE OF JET AIRWAYS (INDIA) LTD. (SUPRA). 4. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE F OR THE REVENUE AND PERUSING THE JUDGMENT IN THE CASE OF JE T AIRWAYS (INDIA) LTD (SUPRA) AND DECISION OF CO-ORDINATE BENCH IN TH E CASE OF SHRI A.T. KRISHNAKUMAR (SUPRA), WE FIND THAT THE RATIO OF THE SAID DECISIONS ARE APPLICABLE TO THE FACTS OF THE PRESENT CASE. ACCOR DINGLY, GROUND NOS. 2 TO 5 RAISED BY THE ASSESSEE ARE ALLOWED. THE OTHE R GROUNDS, BEING GENERAL IN NATURE AND RELATED TO THE MERITS OF THE ADDITIONS, ARE NOT ADJUDICATED IN THIS ORDER CONSIDERING OUR DECISION ON THE LEGAL ISSUE RELATING TO VALIDITY OF THE RE-ASSESSMENT. ACCORDI NGLY, GROUND NOS. 2 TO 5 ARE ALLOWED. HOWEVER, GROUND NOS. 1 AND 6 TO 12 ARE DISMISSED AS BEING ACADEMIC. ITA NO.1110/14 :- 5 -: 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25 TH OF MAY, 2015, AT CHENNAI. SD/- SD/- ( ! ' ) (CHALLA NAGENDRA PRASAD) # / JUDICIAL MEMBER ( . ) (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 25 TH MAY, 2015 RD %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF