Rushil International, Ahmedabad V. The Dy.CIT., Circle-11, Ahmedabad

ITA 1153/AHD/2006

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57134 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-01-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 08-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y C SURTI
• Assessee Lawyers: M K PATEL
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 143(3); 80HHC

Judgement Text

ITA NO.1153/AHD/2006. A.Y,.2001-02. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, A HMEDABAD (BEFORE SHRI G.C. GUPTA,VICE PRESIDENT AND SHRI B. R. BASKARAN,AM) I.T.A. NO. 11 53/AHD/2006 (ASSESSMENT YEAR: 2001- 02) RUSHIL INTERNATIONAL 1, KRINKAL APARTMENT, MAHALAXMI SOCIETY, PALDI, AHMEDABAD. (APPELLANT) VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CCIRCLE-11, NARAYAN CHAMBERS, NEAR PATANG HOTEL, AHMEDABAD . (RESPONDENT) PAN: AAEER 3393 M APPELLANT BY : MR. M.K. PATEL RESPONDENT BY : MR. Y. C. SURTI. ( )/ ORDER DATE OF HEARING : 25-1-2012 DATE OF PRONOUNCEMENT : 25-1-2012 PER: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER. THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20-3-2006 PASSED BY THE LD. CIT (A)-XVII, AHMEDABAD AND IT RE LATES TO THE ASSESSMENT YEAR 2001-02. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT (A) HAD ERRED IN CONSIDERING R EASSESSMENT PROCEEDING U/S. 147 OF THE I.T. ACT, AS VALID. 2. THAT THE LD. CIT (A) HAD ERRED IN NOT CONSIDERIN G RECEIPT OF RS. 12,082/-, DUE TO FOREIGN EXCHANGE RATE FLUCTUATION, AS PART OF EXPORT TURNOVER. ITA NO.1153/AHD/2006. A.Y,.2001-02. 2 3. THAT THE LD. CIT (A) HAD ERRED IN DEDUCTING AMO UNT OF RS.3,97,296, AS PART OF EXPORT TURNOVER. 4. THAT THE LD. CIT (A) HAD ERRED IN DEDUCTING AMO UNT FOR, OVERSEAS COMMISSION EXPENSE OF RS.2,46,500/- OUT OF EXPORT T URNOVER ELIGIBLE FOR DEDUCTION U/S. 80-HHC. 3. THE FIRST ISSUE RELATES TO THE VALIDITY OF REOPE NING THE ASSESSMENT U/S. 147 OF THE ACT. BEFORE US THE DEPARTMENT HAS FILED A COPY OF REASONS RECORDED FOR REOPENING THE ASSESSMENT, WHICH READ AS UNDER:- REASONS FOR REOPENING OF ASSESSMENT PROCEEDINGS . WHILE PASSING THE ASSESSMENT U/S. 143(3) VIDE ORDE R DATED 29-1-2004 THE FOLLOWING FACTS ARE OBSERVED:- THE ASSESSEE HAS EXPORTED GOODS AND CLAIMED DEDUCTI ON U/S.80-HHC OF THE I.T. ACT DURING THE YEAR UNDER CONSIDERATION , THE FOLLOWING POINTS ARE OBSERVED FROM THE ASSESSMENT MADE U/S.143 (3) OF TH E I. T. ACT. (I) THE AMOUNT OF RS. 12,062/- AND RS.4,82,900/- AR E RECEIVED ON ACCOUNT OF FLUCTUATION OF FOREIGN EXCHANGE RATE IS CONSIDERED FOR DEDUCTION U/S.80HHC OF THE I. T. ACT.THIS IS NOT AN INCOME DERIVED FROM EXPORT SALES. (II) THE ASSESSEE HAS PAID COMMISSION US $ 5391 (RS .2,46,500/-) TO M/S. ALQAMRA INTERNATIONAL TRADE WHICH IS CONSIDERE D IN EXPORT TURNOVER AND CLAIMED THE DEDUCTION. 2. THUS, THE ASSESSEE HAD BEEN ALLOWED EXCESS DEDUC TION U/S.80HHC TO THE EXTENT OF RS.7,41,468/-, WHICH HAS RESULTED IN UNDER ASSESSMENT TO THE SAME EXTENT AND SAME IS REQUIRED TO BE TAXED. THERE FORE, IT IS THE ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT. THEREFORE, ASSESSMENT IS REQUIRED TO BE REOPENED. ISSUE NOTICE U/S. 148. SD/- NOTICE U/S.148 IS ISSUED AND SERVED ON (A. K. PATEL) BY SPEED POST ON 24-01-2005. ITA NO.1153/AHD/2006. A.Y,.2001-02. 3 4. DURING THE COURSE OF HEARING, THE LD. AR POINTED OUT THAT THE AO HAD CONSIDERED BOTH THE POINTS MENTIONED ABOVE, IN THE ORIGINAL ASSESSMENT PROCEEDINGS. ACCORDINGLY HE SUBMITTED THAT THE REO PENING IN THE INSTANT CASE IS NOT IN ACCORDANCE WITH LAW, SINCE IT HAS BEEN MADE DUE TO CHANGE IN THE OPINION OF THE AO. IN SUPPORT OF HIS SUBMISSIONS, HE INVITED OUR ATTENTION TO PARAGRAPH 5 & 6 OF THE ORIGINAL ASSESSMENT ORDER DATED 29-1-2004 AND A LSO TO THE REPLY DATED 17-1- 2003 FILED BEFORE THE AO. 5. THE FIRST REASON MENTIONED BY THE AO IN THE REAS ONS FOR RE-OPENING RELATES TO THE REALIZATION OF EXPORT PROCEEDS AND THE REASON R ELATES TO THE PAYMENT OF COMMISSION, BOTH WITH REFERENCE TO THE DEDUCTION U/ S 80HHC OF THE ACT. ON A CAREFUL PERUSAL OF BOTH THE DOCUMENTS REFERRED BY L D A.R, WE NOTICE THAT THE AO HAS EXAMINED THE BANK CERTIFICATES IN ORDER TO ASCE RTAIN THE VERACITY OF REALIZATION OF EXPORT SALES AND IN FACT, MADE A DISALLOWANCE OF RS.5,74,046/- WHILE COMPUTING THE DEDUCTION U/S. 80HHC OF THE ACT. IN THE LETTER DATED 17-1-2003, THE ASSESSEE HAS SUBMITTED ITS EXPLANATIONS WITH REGARD TO THE P AYMENT OF COMMISSION EXPENSES. HENCE, BOTH THE ISSUES HAVE BEEN CONSIDERED BY THE AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS. THUS, THE ABOVE FACT PROVES THE CONTE NTION OF THE ASSESSEE THAT THE AO HAS REOPENED THE IMPUGNED ASSESSMENT ON MERE CHA NGE OF OPINION. IT IS WELL SETTLED PROPOSITION OF LAW THAT THE COMPLETED ASSES SMENT CANNOT BE REOPENED ON MERE CHANGE OF OPINION. THE LD A.R RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR INDIA LTD., 320 ITR 561 (SC) IN THIS REGARD. 6. IN VIEW OF THE FOREGOING DISCUSSIONS, WE HOLD TH AT REOPENING OF THE ASSESSMENT IN THE INSTANT CASE DOES NOT HAVE SANCTI ON OF THE LAW AND ACCORDINGLY, WE QUASH THE IMPUGNED ASSESSMENT PROCEEDINGS. ITA NO.1153/AHD/2006. A.Y,.2001-02. 4 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 25 - 01- 2012. SD/- SD/- (G. C. GUPTA) (B.R. BASKARAN) VICE PRESIDENT A CCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-XVII, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 25 - 01 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 25 /01 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..