The ITO, Ward-4(3), Baroda V. Sunrise Industrial Equipments Pvt.Ltd., Baroda

ITA 1272/AHD/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0747 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-08-2016
• Assessment Year: 1998-1999
• Appeal Filed On: 12-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Retrospective amendment; Reason to believe; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI R.P. TOLANI, JM, & SHRI AMARJIT SING H, AM. ITA NO. 1272/AHD/2012 ASST. YEAR: 1998-99 ITO, WARD-4(3), BARODA. VS. SUNRISE INDUS. EQUIPMENTS PVT. LTD., 860/3, GIDC, MAKARPURA, VADODARA. APPELLANT RESPONDENT PAN AACCS 9801J ASSESSEE BY NONE REVENUE BY SHRI K. MADHUSUDAN, SR.DR DATE OF HEARING: 17/8/2016 DATE OF PRONOUNCEMENT: 26/8/2016 O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-III, BARODA, DATED 7.3.2012 FOR ASST. YEAR 1 998-99. 2. REVENUE IN ITS APPEAL IN ITA NO.1272/AHD/2012 FO R ASST. YEAR 1998-99 HAS RAISED THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) HAS ERRED IN SETTING-ASIDE THE REASSESSMENT ORDER HOLDING THE SAME AS BAD IN LAW, WITHOUT CONSIDERING THE EXPLANATION 3 T O SECTION 147 INSERTED BY THE FINANCE ACT, 2009 W.E.F. 01.04.1989, WHICH GIVE S A WIDER SCOPE TO SECTION 147 OF THE ACT. ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTE R THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) ON THE ISSUES RAISED IN THE AFORESAID GROUNDS BE SET ASIDE AND THAT OF THE ASSE SSING OFFICER BE RESTORED. 3. FACTS OF THE CASE ARE THAT ASSESSEE IS A PRIVATE LI MITED COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURING, SUPPLYING, ERECTION AND COMMISSIONING OF FRP EQUIPMENTS, PIPES AND FITTINGS. IT FILED ITS RETURN OF INCOME ON 27/11/1998 DECLARING UNABSORBED DEPRECIATION OF RS.1,60,790/-. THE RETURN WAS PROCE SSED U/S 143(1) OF THE ACT. ASSESSMENT U/S 143(3) R.W.S. 147 WAS COMPL ETED ON 27.01.2004 DETERMINING TOTAL INCOME AT RS.64,69,326 /-. THE APPEAL WAS PARTLY ALLOWED BY CIT(A). DEPARTMENT AND ASSESS EE BOTH HAD PREFERRED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUN AL VIDE ITS COMPOSITE ORDER IN ITA NO.1489/AHD/2005 AND ITA NO. 1663/AHD/ 2005 SET ASIDE THE ASSESSMENT ORDER WITH DIRECTION TO GIVE REASONS RECORDED FOR REOPENING THE ASSESSMENT AND THEN AO S HALL BEFORE PROCEEDING WITH RE-ASSESSMENT SHALL DISPOSE OF THE OBJECTION OF ASSESSEE BY PASSING A SPEAKING. DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSING OFFICER PROVIDED REASONS RECORDED TO THE ASSESSEE AND ALSO DISPOSED THE OBJECTIONS RAISED BY THE ASSESSEE.THE ASSESSING OFFICER COMPLETED THE ASSES SMENT U/S 143(3) R.W.S. 254 ON 31/12/2010 DETERMINING TOTAL I NCOME AT RS.64,69,326/-. ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A) WHO HAS ADMITTED THE ADDITIONAL GROUND OF THE ASSESSEE AND SET ASIDE THE RE- ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 3 ASSESSMENT ORDER HOLDING THE SAME AS BAD IN LAW ON THE REASONING THAT THE INCOME FOR WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE AS HAVING ESCAPED ASSESSMENT HAS NOT ACTUALLY ESCAP ED ASSESSMENT ,THEN IT IS NOT OPEN TO HIM TO INDEPENDENTLY ASSESS SOME OTHER INCOME. ON APPEAL, LD. CI(A) HELD AS UNDER:- 'A PERUSAL OF THE ORIGINAL ASSESSMENT ORDER DATED 2 7.01.2005 AS WELL AS THE ASSESSMENT ORDER PASSED ON 31.12.2010, IN PURSUANCE TO SETTING ASIDE OF THE ORIGINAL ASSESSMENT BY ITAT, SHOWS THAT THE REASONS FOR REOPENING THE ASSESSMENT HAS NOT BEEN MENTIONED ANYWHERE IN THESE ORDERS. SIMILARLY, NO ADDITION HAS BEEN MADE REGARDING THE AMOUNTS MENTIO NED IN THE REASONS FOR RE-OPENING OF THE ASSESSMENT AS SUBMITTED BY THE AP PELLANT, IN THE WRITTEN SUBMISSION REPRODUCED ABOVE, THREE HIGH COURTS NAME LY BOMBAY HIGH COURT, DELHI HIGH COURT AND MP HIGH COURT, HAVE HEL D THAT IF AFTER ISSUING A NOTICE U/S 148, THE A.O. HAS ACCEPTED THE CONTENTIO N OF THE ASSESSEE AND HOLDS THAT THE INCOME FOR WHICH HE HAS INITIALLY FO RMED A REASON TO BELIEVE AS HAVING ESCAPED ASSESSMENT HAS NOT ACTUALLY ESCAPED ASSESSMENT, THEN IT IS NOT OPEN TO HIM TO INDEPENDENTLY ASSESS SOME OTHER INCOME. IF HE INTENDS TO DO SO, A FRESH NOTICE U/S 148 WOULD BE NECESSARY, T HE LEGALITY OF WHICH WOULD BE TESTED IN THE EVENT A CHALLENGE BY THE ASSESSEE. THE COURTS HAVE ALSO DISCUSSED THE AMENDMENT MADE U/S 147 VIDE FINANCE A CT NO.2 OF 2009 BY INSERTING EXPLANATION WITH RETROSPECTIVE EFFECT FRO M 01.04,1989 AND HAVE HELD THAT EVEN AFTER THIS AMENDMENT, FOR ASSESSING ANY O THER INCOME WHICH HAS ESCAPED ASSESSMENT AND HAS COME TO THE NOTICE OF TH E A.O. DURING THE COURSE OF REASSESSMENT PROCEEDING, THE ASSESSMENT O F INCOME REGARDING WHOSE ESCAPEMENT ORIGINAL REASON TO BELIEVE U/S 147 HAS BEEN FORMED, IS A MUST. IN SUCH CIRCUMSTANCES, THE PRESENT ASSESSMENT ORDER CAN ALSO NOT BE UPHELD. ACCORDINGLY, THE ADDITIONAL GROUNDS OF THE APPELLANT ARE ACCEPTED AND HENCE, THE REASSESSMENT ORDER IS SET ASIDE.' THE LD CIT(A) FURTHER HELD THAT SINCE THE REASSESSM ENT ORDER HAS BEEN HELD AS BAD IN LAW HENCE THE ADDITIONS MADE ON MERIT DO NOT REQUIRE ANY ADJUDICATION. 4. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. LEARNED DR STATED BEFORE US THAT THE LEARNED CIT APPEALED HAS ERRED I N SETTING ASIDE THE REASSESSMENT ORDER HOLDING THE SAME AS BAD IN LAW W ITHOUT ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 4 CONSIDERING THE EXPLANATION3 TO SECTION 147 INSERTE D BY THE FINANCE ACT 2009 W.E.F. 01.04. 1989 WHICH GIVES A WIDER SCO PE TO SECTION 147 OF THE ACT AND HE ALSO SUPPORTED THE ORDER OF ASS ESSING OFFICER. AFTER HEARING THE LEARNED DR AND GOING THROUGH THE MATERI AL ON RECORD CAREFULLY, WE FIND THAT THE LEARNED CIT(A) HAS SET ASIDE THE ASSESSMENT ORDER AS BAD IN LAW ON THE REASONING TH AT THE A.O. HAS NOT MADE ADDITION REGARDING THE AMOUNTS MENTIONED IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AND HE AL SO STATED THAT IN THESE CIRCUMSTANCES THE AO CANNOT ASSESS OTHER INDE PENDENT INCOME. THE LEARNED CIT(A) HAS FURTHER STATED IN HIS ORDER THAT HE RELIED ON THE DECISIONS OF THREE HIGH COURTS NAMEL Y BOMBAY HIGH COURT, DELHI HIGH COURT BUT NOT ELABORATED IN DETA ILS. 6. IN THIS CONNECTION WE REPRODUCE THE PROVISIONS O F SECTION 147 SPECIALLY EXPLANATION 3 AS UNDER :- SECEC147. 'IF THE [ASSESSING] OFFICER [HAS REASON TO BELIEV E] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 , ASSESS OR REASSESS 91 SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE T O TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS 91 UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE D EPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY B E, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS 92 NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR: ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 5 [ PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IN A CASE WHERE ANY INCOME IN RELATION TO ANY ASSET (INCLUDING FINA NCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA, CHARGEABLE TO TAX, HAS ESCAPED ASSES SMENT FOR ANY ASSESSMENT YEAR:] [ PROVIDED [ ALSO ] THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTERS WHICH ARE THE SUB JECT MATTERS OF ANY APPEAL, REFERENCE OR REVISION, WHICH IS CHARGEABLE TO TAX AND HAS ESC APED ASSESSMENT.] EXPLANATION 1.. EXPLANATION 2. [EXPLANATION 3.FOR THE PURPOSE OF ASSESSMENT OR R EASSESSMENT 1 UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSE SS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION , NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASON S RECORDED UNDER SUB-SECTION (2) OF SECTION 148 .]' 7. AFTER GOING THROUGH THE ABOVE PROVISIONS WE FIND THAT THE CHANDIGARH ITAT IN THE CASE OF SMT. ANITA AGARWAL V . ITO WARD-1 CHANDIGARH (2015) TAXMANN.COM 337 HAS DECIDED THE I SSUE REGARDING THE CHALLENGING THE REOPENING OF THE AS SESSMENT ON THE GROUND THAT REASONS FOR REOPENING ARE DIFFERENT FRO M THE BASIS ON WHICH ADDITION WAS MADE BY THE ASSESSING OFFICER WI THOUT ANY ADDITION HAVING MADE ON THE GROUND ON THE BASIS OF WHICH REASSESSMENT HAVE BEEN INITIATED. IT WAS ALSO OBSER VED BY THE CHANDIGARH ITAT THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAJINDER SINGH KANG V. CIT [2012] 344 ITR 358/25 TAXMANN.COM 124 (PUNJ. & HAR. ) WHEREIN ON SIMILAR FACTS AND CIRCUMSTANCES THE HON'BLE HIGH CO URT HELD AS UNDER: 'WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE AND DO NOT FIND ANY MERIT IN THE SAME. EXPLANATION 3 TO SECTION 147 HAS BEEN INSERTED BY THE FINANCE (N O. 2) ACT, 2009, RETROSPECTIVELY WITH EFFECT FROM APRIL 1, 1989. IT READS THUS: ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 6 '147. INCOME ESCAPING ASSESSMENT.-. . . EXPLANATION 3. - FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UN DER THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSE SS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH I SSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLU DED IN THE REASONS RECORDED UNDER SUB-SECTION (2) OF SECTION 148.' A PLAIN READING OF EXPLANATION 3 TO SECTION 147 CLE ARLY DEPICTS THAT THE ASSESSING OFFICER HAS POWER TO MAKE ADDITIONS EVEN ON THE GROUND ON WHICH REASSESSMENT NOTICE MIGHT NOT HAVE BEEN ISSUED IN C ASE DURING THE REASSESSMENT PROCEEDINGS, HE ARRIVES AT A CONCLUSION THAT SOME O THER INCOME HAS ESCAPED ASSESSMENT WHICH COMES TO HIS NOTICE DURING THE COU RSE OF PROCEEDINGS FOR REASSESSMENT UNDER SECTION 148 OF THE ACT. THE PROV ISION NOWHERE POSTULATES OR CONTEMPLATES THAT IT IS ONLY WHEN THERE IS SOME ADD ITION ON THE GROUND ON WHICH REASSESSMENT HAD BEEN INITIATED, THAT THE ASSESSING OFFICER CAN MAKE ADDITIONS ON ANY OTHER GROUND ON THE BASIS OF WHICH INCOME MA Y HAVE ESCAPED ASSESSMENT. THE REASSESSMENT PROCEEDINGS, THUS, IN THE PRESENT CASE CANNOT BE HELD TO BE VITIATED. 13. REFERRING TO THE JUDGMENT OF THIS COURT IN ATLAS CYCLE INDUSTRIES ' CASE [1989] 180 ITR 319 (P&H) AND THE RAJASTHAN HIGH COURT IN SHRI RAM SINGH'S C ASE [2008] 306 ITR 343 , IT MAY BE NOTICED THAT THESE WERE THE JUDGMENTS R ENDERED BY THE COURTS PRIOR TO THE INSERTION OF EXPLANATION 3 TO SECTION 147 OF THE ACT. IN VIEW OF THE INSERTION OF EXPLANATION 3 TO SECTION 1 47 BY THE FINANCE (NO. 2) ACT, 2009, WITH EFFECT FROM APRIL 1, 1989, THE AFORESAID JUDGMENTS DO NOT ADVANCE THE CASE OF THE ASSESSEE ANY LONGER.' 8. FURTHER THE HON' HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT V. MEHAK FINVEST (P) LTD.(2014)52 TAXMANN.COM H ELD THAT IN VIEW OF EXPLANATION 3 TO SECTION 147,ASSESSING OFFICER I S EMPOWERED TO MAKE ADDITIONS EVEN ON GROUND ON WHICH REASSESSMENT NOTICE MIGHT NOT HAVE BEEN ISSUED WHERE, DURING REASSESSMENT PRO CEEDING, HE CONCLUDES THAT SOME OTHER INCOME HAS ESCAPED ASSESS MENT WHICH COMES TO HIS NOTICE DURING COURSE OF PROCEEDINGS FO R REASSESSMENT UNDER SECTION 148. ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 7 9.. IN THE ABOVE CASE OF CIT V. MEHAK FINVEST THE HON'HIGH COURT OF PUNJAB & HARYANA FURTHER HELD AS UNDER:- 'AFTER HEARING LEARNED COUNSEL FOR THE PARTIES, IN OUR VIEW, THE APPEAL DESERVES TO SUCCEED. EXPLANATION 3 TO SECTION 147 H AS BEEN INSERTED BY THE FINANCE (NO. 2) ACT, 2009, RETROSPECTIVELY WITH EFFECT FROM APRIL 1, 1989. IT READS THUS : '147. INCOME ESCAPING ASSESSMENT.-.EXPLANATION 3.-F OR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOT ICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, N OTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN TH E REASONS RECORDED UNDER SUB-SECTION (2) OF SECTION 148.' THIS COURT IN MAJINDER SINGH KANG'S CASE (SUPRA), C ONSIDERING THE SCOPE OF EXPLANATION 3 TO SECTION 147 OF THE ACT HELD THAT T HE ASSESSING OFFICER IS EMPOWERED TO MAKE ADDITIONS EVEN ON THE GROUND ON W HICH REASSESSMENT NOTICE MIGHT NOT HAVE BEEN ISSUED WHERE DURING THE REASSESSMENT PROCEEDINGS, HE CONCLUDES THAT SOME OTHER INCOME HA S ESCAPED ASSESSMENT WHICH COMES TO HIS NOTICE DURING THE COU RSE OF THE PROCEEDINGS FOR REASSESSMENT UNDER SECTION 148 OF T HE ACT. THE PROVISION NOWHERE POSTULATES OR CONTEMPLATES THAT THE ASSESSI NG OFFICER CANNOT MAKE ANY ADDITIONS ON ANY OTHER GROUND UNLESS SOME ADDITION IS MADE ON THE GROUND ON WHICH REASSESSMENT HAD BEEN INITIATED . SPECIAL LEAVE PETITION (CIVIL) NO. 13028 OF 2011 AGAINST THIS DEC ISION WAS DISMISSED ON AUGUST 19, 2011. THE REASSESSMENT PROCEEDINGS, THUS , IN THE PRESENT CASE, CANNOT BE HELD TO BE VITIATED. ADVERTING TO THE JUDGMENTS RELIED UPON BY LEARNED C OUNSEL FOR THE RESPONDENT, IT MAY BE NOTICED THAT THE DECISION OF THE RAJASTHAN HIGH COURT IN CIT V. SHRI RAM SINGH [2008] 306 ITR 343 WAS HELD TO BE NOT APPLICABLE BEING PRIOR TO THE INSERTION OF EXPLANAT ION 3 TO SECTION 147 OF THE ACT. FURTHER, EXPLANATION 3 TO SECTION 147 OF T HE ACT WAS NOT UNDER CONSIDERATION IN EMPIRE FINVEST LTD.'S CASE (SUPRA) . IN VIEW OF THE BINDING PRECEDENT OF THIS COURT IN MAJINDER SINGH'S KANG'S CASE (SUPRA) AGAINST WHICH SPECIAL LEAVE PETITION HAS BEEN DISMISSED ON AUGUST 19, 2011, THE JUDGMENT OF THE BOMBAY HIGH COURT IN JET AIRWAYS (I ) LTD.'S CASE (SUPRA), WHICH HAS BEEN FOLLOWED BY THE DELHI HIGH COURT IN RANBAXY LABORATORIES LTD.'S CASE (SUPRA), WOULD NOT COME TO THE RESCUE O F THE ASSESSEE. ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 8 10. IN VIEW OF THE ABOVE STATED FACTS AND LEGAL FIN DINGS WE FIND THE LD CIT(A) HAS ERRED IN DECIDING THE CASE ON THE RE ASONING THAT ASSESSMENT OF INCOME WHOSE ESCAPEMENT MENTIONED IN THE REASON TO BELIEVE AS HAVING ESCAPED HAS NOT ACTUALLY ESCAP ED AND IT IS NOT OPEN TO THE A.O.TO ASSESS SOME OTHER INCOME..THE JU DICIAL JUDGMENTS REFERRED BUT NOT ELABORATED BY THE LD.CIT(A) IN HIS ORDER WERE RENDERED BY THE COURTS PRIOR TO THE INSERTION OF EX PLANATION 3 TO SECTION 147 OF THE ACT. IN VIEW OF THE INSERTION OF EXPLANATION 3 TO SECTION 147 BY THE FINANCE (NO. 2) ACT, 2009, WITH EFFECT FROM APRIL 1, 1989, THE AFORESAID JUDGMENTS DO NOT SUPPORT THE DE CISION OF THE LD.CIT(A). IN VIEW OF THE ABOVE, THE ORDER PASSED B Y THE LD.CIT(A) IS UNSUSTAINABLE AND IS REMANDED TO LD.CIT(A) TO ADJUD ICATE THE ISSUE AFRESH ON MERIT IN ACCORDANCE WITH LAW AFTER TAKING IN TO ACCOUNT THE LEGAL FINDINGS STATED AS SUPRA AND PASS SPEAKING O RDER ON THE MERIT OF ADDITION MADE BY THE A.O. ACCORDINGLY, THE APPEA L OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2016 SD/- SD/- (R.P. TOLANI) JUDICIAL MEMBER (AMARJIT SINGH) ACCOUNTANT MEMBER DATED 26/8/2016 MAHATA/- ITA NO. 1272/AHD/2012 ASST. YEAR 1998-08 9 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGI STRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 26/08/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 26/08/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 26/8/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: