DCIT, Central Circle - XI, Kolkata, Kolkata V. M/s. Samridhi Stock Pvt. Ltd. (Formerly Swami Niryat Pvt. Ltd.), Kolkata

ITA 1323/KOL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70386 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 10-10-2011
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN SATPATI
• Assessee Lawyers: S M SURANA
• Keywords: Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 115JB; 147; 148

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND ! ' ! ! ' ! ! ' ! ! ' ! , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] # # # # /I.T.A NOS. 1322 & 1323/KOL/2011 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEARS: 2006-07 & 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. SAMRI DHI STOCK PVT. LTD. CIRCLE-XI, KOLKATAL (FORMERLY SWAMI NIRYAT PVT . LTD.) (PAN: AAECS4902L) ()* /APPELLANT ) (+)*/ RESPONDENT ) DATE OF HEARING: 27.08.2013 DATE OF PRONOUNCEMENT: 27.08.2013 FOR THE APPELLANT: SHRI NIRANJAN SATPATI, SR. DR FOR THE RESPONDENT: SHRI S. M. SURANA, ADVOCATE , / ORDER PER MAHAVIR SINGH, JM/ ! ' ! ! ' ! ! ' ! ! ' ! , : THESE APPEALS BY REVENUE ARE ARISING OUT OF SEPARAT E ORDERS OF CIT(A), CENTRAL-1, KOLKATA IN APPEAL NOS.113&114/CC-XI/CIT(A),C-1/10-1 1 DATED 01.07.2011. ASSESSMENTS WERE FRAMED SEPARATELY BY ACIT, CC-XI/KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEARS 2006-07 AND 2007-08 VIDE HIS ORDERS DATED 15.07.2008 AND 29.05.2009. 2. THE ONLY COMMON ISSUE IN THESE TWO APPEALS OF RE VENUE IS AGAINST THE ORDER OF CIT(A) REGARDING COMPARISON BETWEEN NORMAL TAX AND MAT TAX U/S 115JB OF THE ACT THEREBY CAUSING CHANGE OF OPINION AND FOR THAT REASON NO REASSESSME NT U/S. 147 OF THE ACT CAN BE DONE. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE FILED COPY OF JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT VS. M/S. WINRO COMMERCIAL INDIA LTD., G A NO.274 OF 2013, ITAT NO. 25 OF 2013 AND CIT VS. M/S. TODI SECURITIES (P) LTD., GA NO.42 5 OF 2013, ITAT NO.32 OF 2013 DATED 25.03.2013, WHEREIN THE ISSUE IS SQUARELY COVERED I N FAVOUR OF THE ASSESSEE. IT IS POINTED OUT BY LD. COUNSEL THAT THE HONBLE CALCUTTA HIGH COURT HA S FOLLOWED THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S. HO RIZON CAPITAL LTD. AND DECIDED THE ISSUE AS UNDER: 2 ITA NOS. 1322 & 1323/K/2011 M/S. SAMRIDHI STOCK PV T. LTD A. YS. 2006-07 & 2007-08 MR. KHAITAN, LEARNED SENIOR ADVOCATE HAPPENED TO BE PRESENT WHEN THE MATTER WAS TAKEN UP FOR HEARING. HE POINTED OUT THAT THIS QUESTION I S ALREADY COVERED BY A JUDGMENT OF THE KARNATAKA HIGH COURT. HE PRODUCED A COPY OF THE JUD GMENT IN THE CASE OF THE COMMISSIONER OF INCOME TAX VS. M/S. HORIZON CAPITAL LTD. WHEREIN THE FOLLOWING VIEW WAS TAKEN: 17. THEREFORE, THE CONTENTION THAT THIS BENEFIT IS NOT AVAILABLE TO THE ASSESSEE WHOSE TOTAL INCOME IS ASSESSED UNDER SECTI ON 115JB HAS NO SUBSTANCE. IN OTHER WORDS, WHEN THE TOTAL INCOME IS ASSESSED AND THE TAX CHARGEABLE IS COMPUTED, IT IS FROM THAT TAX WHICH I S CHARGEABLE, THE TAX PAID UNDER SECTION 88E IS GIVEN DEDUCTION, BY WAY O F REBATE, UNDER SECTION 87 OF THE ACT. THIS IS THE LEGISLATIVE INTENT. THAT IS A PROMISE TO GIVE DEDUCTION OF THE TAX ALREADY PAID. THIS IS THE MODE IN WHICH TAX ALREADY PAID IS HANDED BACK AT THE TIME OF FINAL COMPUTATIO N. WE ARE OF THE OPINION THAT THE VIEWS EXPRESSED BY T HE KARNATAKA HIGH COURT ARE REASONABLE AND ARE ALSO ADOPTED BY US. THE QUESTION S ARE ACCORDINGLY ANSWERED. BOTH THE APPEALS ARE THUS DISPOSED OF. EVEN HE POINTED OUT FROM THE REASONS RECORDED THAT THIS IS PRECISELY THE ONLY ISSUE, THE RELEVANT REASONS RECORDED ON 28.01.2010 READS AS UNDER: IN THE INSTANT CASE, ASSESSMENT WAS COMPLETED ON 1 5-7-2006. ON PERUSAL OF RECORD, IT HAS BEEN OBSERVED THAT TAX PAYABLE ON TOTAL INCOME COMPUTED U/S. 143(3) OF INCOME TAX ACT IS RS. 60,609/-. HOWEVER, THE TAX PAYABLE U/S.1 15JB WAS RS.2,37,254/-. (BOOK PROFIT RS. 28,19,411/-). SEC. 115JB OF I.T. ACT STATES THAT NOTWITHSTANDING ANYTHING CONTAINED IN ANY PROVISIONS OF ACT, WHEREIN IN THE CASE OF ASSESSEE, BEING A COMPA NY, THE INCOME TAX, PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THIS ACT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING OR AFTER THE FIRST DAY O F APRIL 2001 IS LESS THAN 7.5% OF ITS BOOK PROFIT, SUCH BOOK PROFIT SHALL BE DEEMED TO B E THE TOTAL INCOME OF THE ASSESSEE AND THE TAX PAYABLE BY THE ASSESSEE ON SUCH TOTAL INCOM E SHALL BE THE AMOUNT OF INCOME TAX @ 7.5%. AS THE TAX PAYABLE ON TOTAL INCOME AS COMPUTED UNDE R I.T. ACT, 1961, IS LESS THAN 7.5% OF THE BOOK PROFIT, THE SAME SHOULD HAVE BEEN TAKEN AS TOTAL INCOME OF THE ASSESSEE COMPANY. FALURE ON THE PART OF THE ASSESSEE COMPANY TO TREA T ITS BOOK PROFIT AS TOTAL INCOME FOR THE A.Y. 2006-07 HAS RESULTED IN UNDER-ASSESSMENT OF IN COME. HENCE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEA BLE TO TAX FOR THE A.Y. 2006-07 HAS ESCAPED ASSESSMENT FOR THE A.Y.2006-07 WITHIN THE M EANING OF SEC. 147 OF I.T. ACT, 1961. ISSUE NOTICE U/S. 148 OF THE I.T. ACT, 1961, TO THE ASSESSEE COMPANY. 3. THE REVENUES CASE IS THAT THE ASSESSEE IS A MEM BER OF NATIONAL STOCK EXCHANGE OF INDIA AND ENGAGED IN THE BUSINESS OF TRADING IN SHA RES AND SECURITIES. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.46,13 ,960/- ON 31.10.2006 FOR AY 2006-07. THE ASSESSMENT WAS COMPLETED BY THE AO U/S. 143(3) OF THE ACT ON 15.07.2008 ON A TOTAL INCOME OF RS.46,30,636/- AND TAX LIABILITY WAS DETERMINED AT RS.60,609/-. THE TAX PAYABLE U/S. 115JB 3 ITA NOS. 1322 & 1323/K/2011 M/S. SAMRIDHI STOCK PV T. LTD A. YS. 2006-07 & 2007-08 OF THE ACT WAS AT RS.2,37,254/- I.E. ON THE BOOK PR OFIT AND ACCORDING TO AO THIS HAS ESCAPED ASSESSMENT. WE FIND THAT THE CIT(A) HAS CONSIDERED THIS ISSUE AND DECIDED AGAINST THE REVENUE VIDE PARA 4.4 OF HIS APPELLATE ORDER AS UNDER: 4.4. CONSIDERING THE SUBMISSION OF THE ASSESSEE A ND THE FACT OF THE CASE AS DISCUSSED ABOVE, IT IS HELD THAT THE CASE WAS REOPENED BY THE AO ON MERE CHANGE OF OPINION THAT TAX PAYABLE ON THE TOTAL INCOME DETERMINED UNDER NORMAL PROVISION HAS TO BE TAKEN AFTER ALLOWING REBATE UNDER SECTION 88E OF THE ACT FOR TH E PURPOSE OF COMPARISON WHETHER THE SAME IS MORE THAN THE TAX PAYBLE ON THE BOOK PROFIT . IT IS A SETTLE ISSUE THAT THE REOPENING OF THE PROCEEDING, BEING MERELY BASED ON CHANGE OF OPINION SHOULD BE CONSIDERED AS INVALID AND ILLEGAL AND SHOULD BE CANCELLED. ACCO RDINGLY THE NOTICE ISSUE UNDER SECTION 148 OF THE INCOME TAX ACT IS QUASHED AND ACCORDINGL Y THE ORDER PASSED UNDER SECTION 147 IS ANNULLED. EVEN THE LD. DR BEFORE US CONCEDED THAT THE ISSUE I S COVERED AGAINST REVENUE AND IN FAVOUR OF ASSESSEE BY THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF M/S. WINRO COMMERCIAL INDIA LTD. & ORS. (SUPRA), COPY OF WHICH IS GIVEN IN FILE . IN SUCH CIRCUMSTANCES, WE DISMISS THE APPEALS OF REVENUE IN BOTH THE YEARS. 4. IN THE RESULT, APPEALS OF REVENUE ARE DISMISSED. 9. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- , ! ' ! ! ' ! ! ' ! ! ' ! , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( - - - -) )) ) DATED : 27TH AUGUST, 2013 ./ '$01 '2 JD.(SR.P.S.) , 3 ''4 54&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT M/S. SAMRIDHI STOCK PVT. LTD. (FORMERLY SWAMI NIRYAT PVT. LTD., 4, SYNAGOGUE STREET, 9 TH FLOOR, KOLKATA-1. 2 +)* / RESPONDENT DCIT, CIRCLE-XI, KOLKATA 3 . ',$ ( )/ THE CIT(A) , KOLKATA 4. ',$ CIT, KOLKATA 5 . ='> '$ / DR, KOLKATA BENCHES, KOLKATA +4 '/ TRUE COPY, ,$/ BY ORDER, ! 1 /ASSTT. REGISTRAR .