DCIT, CIR-5(1), KOLKATA, Kolkata V. M/s Coal India Ltd., Kolkata

ITA 1346/KOL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0138 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MD USMAN
• Assessee Lawyers: AMIT PATNI; PUJA AGARWAL ACA
• Keywords: Reopening of assessment; Business income; Tangible material; Difference of opinion; Tax effect; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NOS. 1346 & 1347/KOL/2015 ASSESSMENT YEARS: 2006-2007 & 2007-2008 DEPUTY COMMISSIONER OF INCOME TAX,................. ........................APPELLANT CIRCLE-5(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, 3 RD FLOOR KOLKATA-700 069 -VS.- M/S. COAL INDIA LIMITED,........................... ...................................RESPONDENT COAL BHAWAN, 10, NETAJI SUBHAS ROAD, KOLKATA-700 001 [PAN: AABCC 3929J] APPEARANCES BY: MD. USMAN, CIT, D.R. , FOR THE APPELLANT SHRI AMIT PATNI, FCA. & SMT, PUJA AGARWAL, ACA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 04, 2018 DATE OF PRONOUNCING THE ORDER : DECEMBER 07, 2018 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST TWO SEPARATE ORDERS BOTH DATED 15.09.2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-8, KOLKATA AND SINCE THE SOLIT ARY ISSUE RAISED THEREIN RELATING TO THE VALIDITY OF RE-ASSESSMENT M ADE BY THE ASSESSING OFFICER IS COMMON, THE SAME HAVE BEEN HEARD TOGETHE R AND ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER. 2. FIRST WE TAKE UP THE APPEAL OF THE REVENUE FOR A .Y. 2006-07 BEING ITA NO. 1346/KOL/2015, WHEREIN THE FOLLOWING GROUND S ARE RAISED BY THE REVENUE:- ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 2 (1) THAT THE LD. CIT(A) HAS ERRED IN ANNULLING THE ORDER U/S 147 BASING ON 1 ST PROVISO TO SECTION 147 AND PROVISO TO SUB-SECTION (1) TO SECTION 151, WHICH IS NOT BAS ED ON FACTS AND CIRCUMSTANCES OF THE CASE. (2) THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERIN G THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SUN ENGINEERING WORKS P. LTD., REPORTED IN 198 ITR 297. (3) THAT THE ISSUE OF ADDITION IN THE REASSESSMENT ORDER U/S 147 HAS NOT BEEN CONSIDERED BY THE LD. CIT(A) I N THE JUDGMENT. 3. THE ASSESSEE IN THE PRESENT CASE IS A PUBLIC SEC TOR ENTERPRISES, WHICH IS ENGAGED IN THE ACTIVITIES OF MINING AND EX TRACTION OF COAL AS ALSO IN MANAGING THE COAL MINING INDUSTRY IN THE NATIONA LIZED SECTOR. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY IT ON 14.11.2006 DECLARING TOTAL INCOME OF RS.244,19,98,0 00/-. IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3 ) VIDE AN ORDER DATED 11.12.2008, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.605,55,75,000/- AFTER MAKIN G CERTAIN ADDITIONS/DISALLOWANCES. THEREAFTER THE ASSESSING O FFICER FOUND ON FURTHER VERIFICATION OF RECORDS THAT THERE WAS ESCA PEMENT OF INCOME OF THE ASSESSEE FROM THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. HE ACCORDINGLY REOPENED THE ASSESSMENT AFTER RECORDING THE REASONS AND ISSUED A NOTICE UNDER SECTION 148 TO THE ASSESSEE O N 05.08.2011. MEANWHILE THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER ORIGINALLY PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) CAME TO BE DISPOSED OF BY THE LD. CIT(APPEALS) VIDE HIS ORDER DATED 21. 10.2009 AND EFFECT TO THE SAID ORDER WAS GIVEN BY THE ASSESSING OFFICER V IDE ORDER DATED 30.04.2009. THEREAFTER THE REASSESSMENT WAS COMPLET ED BY THE ASSESSING OFFICER UNDER SECTION 147/143(3) VIDE AN ORDER DATE D 25.03.2013, WHEREIN AN ADDITION OF RS.200,30,56,000/- WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE BY TREA TING THE INTEREST INCOME RECEIVED ON DEPOSITS WITH SCHEDULED BANKS AS INCOM E FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME THEREBY DISALLO WING THE CLAIM OF THE ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 3 ASSESSEE FOR SET OFF OF BROUGHT FORWARD BUSINESS LO SS AGAINST THE SAID INTEREST INCOME. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 147/143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDITY OF THE SAID A SSESSMENT AS WELL AS DISPUTING THE ADDITION OF RS.200,30,56,000/- MADE B Y THE ASSESSING OFFICER THEREIN AND AFTER CONSIDERING THE SUBMISSIO N MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECOR D, THE LD. CIT(APPEALS) FOUND MERIT IN THE CONTENTION RAISED ON BEHALF OF T HE ASSESSEE THAT THE RE- OPENING OF ASSESSMENT ORIGINALLY COMPLETED UNDER SE CTION 143(3) BEYOND A PERIOD OF FOUR YEARS WITHOUT THERE BEING ANY FAIL URE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR THE ASSESSMENT WAS BAD-IN-LAW BY VIRTUE OF THE 1 ST PROVISO TO SECTION 147. HE FURTHER HELD THAT INITIATION OF RE-ASSESSMENT PROCE EDINGS UNDER SECTION 147/148 WAS ALSO BAD-IN-LAW AS THE PRIOR SANCTION O F THE CONCERNED AUTHORITY AS REQUIRED UNDER THE PROVISO TO SUB-SECT ION (1) OF SECTION 151 WAS NOT OBTAINED. HE ACCORDINGLY ANNULLED THE ASSES SMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 147/143(3) VIDE HIS APPELLATE ORDER DATED 15.09.2015. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUN AL. 5. THE LD. D.R. RELIED ON THE REASONS RECORDED BY T HE ASSESSING OFFICER IN SUPPORT OF THE REVENUES CASE THAT THE RE-OPENIN G OF ASSESSMENT WAS IN ACCORDANCE WITH LAW AND THE LD. CIT(APPEALS) WAS NO T JUSTIFIED IN ANNULLING THE SAME. THE LD. COUNSEL FOR THE ASSESSE E, ON THE OTHER HAND, CONTENDED THAT THE ASSESSMENT ORIGINALLY COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 143(3) WAS REOPENED BY THE AS SESSING OFFICER AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR WITHOUT POINTING OUT THAT THE INCOME OF THE ASSESSE E HAD ESCAPED ASSESSMENT AS A RESULT OF THE FAILURE OF THE ASESSE E TO FURNISH FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSME NT. HE CONTENDED THAT ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 4 THE REOPENING OF ASSESSMENT BY THE ASSESSING OFFICE R BEYOND A PERIOD OF FOUR YEARS WITHOUT POINTING OUT SUCH FAILURE ON THE PART OF THE ASSESSEE THUS WAS BAD-IN-LAW BEING BARRED BY LIMITATION AS P ER THE 1 ST PROVISO TO SECTION 147 AND THE ASSESSMENT MADE BY THE ASSESSIN G OFFICER UNDER SECTION 147/143(3) IN PURSUANCE THEREOF WAS RIGHTLY ANNULLED BY THE LD. CIT(APPEALS) BEING INVALID. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON REOCRD. IT IS OBSERV ED THAT THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) FOR A.Y. 2006-07 WAS RE- OPENED BY THE ASSESSING OFFICER ON 05.08.2011 AFTER RECORDING THE FOLLOWING REASONS:- ON FURTHER VERIFICATION OR RECORDS, IT IS REVEALED THAT BUSINESS INCOME OF THE ASSESSEE INCLUDED INTEREST O F RS.20,030.56 LAKHS. AS PER INCOME TAX, INTEREST ON FIXED DEPOSIT ACCOUNTS WITH SCHEDULE BANK WAS ON INCOME U NDER THE HEAD INCOME FROM OTHER SOURCES WITH WHICH B/F BUSINESS LOSS WAS NOT ALLOWABLE TO BE SET OFF U/S 7 2(1). THIS MISTAKE IN COMPUTATION OF INCOME LED TO A UNDE R ASSESSMENT OF INCOME. 7. AS PER THE PROVISO TO SECTION 147, WHERE AN ASSE SSMENT HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR UNDER SECTION 143(3), NO ACTION SHALL BE TAKEN BY THE AO UNDER SECTION 147 AFTER EX PIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR INTER ALIA BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCL OSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THA T ASSESSMENT YEAR. IN THE PRESENT CASE, THE ASSESSMENT ORIGINALLY COMPLET ED UNDER SECTION 143(3) FOR AY. 2007-08 WAS REOPENED BY THE AO ON 05 .08.2011 I.E. AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CONSIDERATION AND IT WAS THEREFORE INCUMBENT UPON T HE AO AS PER THE FIRST PROVISO TO SECTION 147 TO POINT OUT THAT ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT. A ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 5 PERUSAL OF THE REASONS RECORDED BY THE AO HOWEVER S HOWS THAT NO SUCH FAILURE ON THE PART OF THE ASSESSEE WAS POINTED OUT BY HIM AS ENVISAGED IN THE FIRST PROVISO TO SECTION 147. WE, THEREFORE, FI ND MERIT IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE REOPENING OF ASSESSMENT BY THE AO WAS BARRED BY LIMITATION AND T HE ASSESSMENT MADE BY THE AO UNDER SECTION 147/143(3) IN PURSUANCE THE REOF WAS LIABLE TO BE CANCELLED BEING INVALID AS RIGHTLY HELD BY THE LD. CIT(APPEALS). WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT (APPEALS) ON THIS ISSUE AND DISMISS THE APPEAL OF THE REVENUE FOR A.Y . 2006-07. 8. NOW WE SHALL TAKE UP THE APPEAL OF THE REVENUE F OR A.Y. 2007-08 BEING ITA NO. 1347/KOL/2015, WHEREIN THE FOLLOWING GROUNDS ARE RAISED:- (1) THAT THE LD. CIT(A) HAS ERRED IN ANNULLING THE ORDER U/S 147 BY TREATING THE SAME BEING MERE CHANGE OF OPINION IGNORING THE DECISION OF THE FULL BENCH OF DELHI HIGH COURT IN THE CASE OF CIT VS.- USHA INTERNATIO NAL LIMITED. (2) THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERIN G THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SUN ENGINEERING WORKS P. LTD. REPORTED IN 198 ITR 297. (3) THAT THE ISSUE OF ADDITION IN THE REASSESSMENT ORDER U/S 147 HAS NOT BEEN CONSIDERED BY THE LD. CIT(A) I N THE JUDGMENT. 9. IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SEC TION 143(3) VIDE AN ORDER DATED 14.12.2009, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.553,79,34 ,548/- AS AGAINST THE TOTAL INCOME OF RS.205,15,88,000/- DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME. THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) BEFOR E THE LD. CIT(APPEALS) AND VIDE HIS APPELLATE ORDER DATED 06.06.2010, THE LD. CIT(APPEALS) DISPOSED OF THE SAME. THE APPEAL EFFECT TO THE SAID ORDER WAS GIVEN TO THE ASSESSEE ON 02.08.2010 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 6 RS.205,61,87,822/-. THEREAFTER THE ASSESSING OFFICE R ON FURTHER VERIFICATION OF RECORDS FOUND THAT THERE WAS ESCAPE MENT OF INCOME OF THE ASSESSEE FROM ASSESSMENT FOR THE YEAR UNDER CONSIDE RATION. HE ACCORDINGLY REOPENED THE ASSESSMENT AND ISSUED A NO TICE UNDER SECTION 148 AFTER RECORDING THE REASONS. IN PURSUANCE TO TH E SAID REOPENING, THE REASSESSMENT WAS MADE BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 25.03.2013 PASSED UNDER SECTION 147/143(3) OF THE A CT, WHEREBY HE DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.4 41,81,22,822/- AFTER MAKING THE FOLLOWING ADDITIONS:- 1. INTEREST ON BANK FIXED DEPOSIT TREATED AS INCOME FROM OTHER SOURCES RS.230,82,71,000/ - 2. INTEREST ACCRUED ON VRS LOAN RS.1,76,58,000/ - 3. DISALLOWANCE UNDER SECTION 36(1) RS.3,60,06,000/ - 10. AGAINST THE ORDER PASSED BY THE ASSESSING OFFIC ER UNDER SECTION 147/143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDITY OF THE SAID A SSESSMENT AS WELL AS DISPUTING THE ADDITION MADE BY THE ASSESSING OFFICE R THEREIN AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) FOUND MER IT IN THE CONTENTION RAISED ON BEHALF OF THE ASSESSEE THAT THE RE-OPENIN G OF ASSESSMENT MADE BY THE ASSESSING OFFICER ON THE BASIS OF SAME MATER IAL, WHICH WAS ALREADY AVAILABLE ON RECORD WAS BAD-IN-LAW AS THE SAME WAS BASED MERELY ON A CHANGE OF OPINION. HE ACCORDINGLY ANNULLED THE ASSE SSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 147/143(3) OF THE A CT VIDE HIS APPELLATE ORDER DATED 15.09.2015. AGGRIEVED BY THE ORDER OF T HE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TR IBUNAL. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) WAS REOPE NED BY THE ASSESSING OFFICER AFTER RECORDING THE FOLLOWING REASONS:- ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 7 (1) ON SCRUTINY OF RECORDS, IT IS REVEALED THAT AS SESSEE COMPUTED HIS TOTAL INCOME TO THE TUNE OF RS.205,61, 87,822/- WHICH INCLUDED INCOME FROM BUSINESS OF RS.202,86,77 ,822/- AFTER SET OFF OF BROUGHT FORWARD BUSINESS LOSS OF RS.53,26,37,298/- FOR A/Y 2002-03 AND INCOME FROM H OUSE PROPERTY OF RS.275,10,000/-. RECORD ALSO FURTHER RE VEALED THAT BUSINESS INCOME OF THE ASSESSEE INCLUDED INTEREST O F RS.23082.71 LAKHS RECEIVED FROM DEPOSITS ACCOUNTS W ITH SCHEDULED BANKS (DEPOSITS OF RS.363727.68 LAKHS AS ON 31/03/2007). NOW AS PER INCOME TAX ACT. INTEREST ON FIXED DEPOSI T ACCOUNTS WITH SCHEDULED BANKS WAS AN INCOME UNDER THE HEAD ' INCOME FROM OTHER SOURCES' WITH WHICH BROUGHT FORWARD BUSI NESS LOSS WAS NOT ALLOWABLE TO BE SET OFF U/S.72(L). THEREFOR E, THERE WAS A MISTAKE IN COMPUTATION OF INCOME AND LED TO UNDER A SSESSMENT OF INCOME OF THE ASSESSEE. (2) SCRUTINY OF SERIAL NO.10.1 OF SCHEDULE M (NOTES ON ACCOUNTS) REVEALED THAT RECOGNITION OF REVENUE IN RESPECT OF INTEREST CLAIM AMOUNTING TO RS.6811.78 LAKHS AND APEX CHARGE S AMOUNTING TO RS.1210.00 LAKHS ATTRIBUTABLE TO BHARA T COKING COAL LTD. (BCCL) AND RECOGNITION OF RS.176.58 LAKHS ATTRIBUTABLE TO INTEREST FOR THE YEAR ON VRS LOAN T O EASTERN COALFIELDS LTD. (ECL) IN THE YEAR'S ACCOUNT HAD BEE N DEFERRED ALTHOUGH VRS LOON HAD BEEN SQUARED UP BY ECL TO THE ASSESSEE COMPANY ON 31/03/2007. NOW FROM THE ASSESSMENT ORDER IT WAS REVEALED THAT THOUGH INTEREST CLAIM AMOUNTING TO RS.6811.78 LAKHS AND AP EX CHARGES AMOUNTING TO RS.1210.00 LAKHS ATTRIBUTABLE TO THE B CCL WERE ADDED BACK BY THE DEPORTMENT, INTEREST AMOUNTING TO RS.176.58 LAKHS ON VRS LOAN ATTRIBUTABLE TO THE ECL WAS NOT A DDED BECK. AS THE ASSESSEE COMPANY WAS FOLLOWING MERCANTILE SY STEM OF ACCOUNTING THE INCOME ACCRUED IN THE FORM OF INTERE ST ON VRS LOAN DURING THE YEAR WAS REQUIRED TO BE ACCOUNTED F OR IN THE A/Y 2007-08 RELEVANT TO THE YEAR 2006-07. OMISSION RESULTED IN UNDERASSESSMENT OF INCOME BY RS.176.58 LAKHS WITH CONSEQUENTIAL TAX EFFECT OF RS.80,01,358/-. (3) FROM THE SCHEDULE 15 OF P/L A/CS AND COMPUTATIO N OF INCOME BY THE ASSESSEE, IT REVEALED THAT DOUBTFUL A DVANCE WAS WRITTEN OFF FOR RS.360.06 LAKHS DURING THE YEAR BEI NG NOT PAID BY ECL DURING THE PERIOD OF 5 YEARS FROM THE DOTE O F EXPENDITURE INCURRED BY THE ASSESSEE ON BEHALF OF E CL. AS PER SECTION 36(1)(VII) OF I. T. ACT ANY BAD DEBT OR PART THEREOF IS WRITTEN OFF AS IRRECOVERABLE SUBJECT TO THE PROVISION OF SECTION 36(2) AND SECTION 36(2) (I) STORES- THAT NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT' IN COMPUTING THE INCOME OF THE ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 8 ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT O F SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIER PRE VIOUS YEAR OR REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF THE BUSINESS OF BANKING OR MONEY LENDING WHICH IS CARRIED ON BY THE ASSESSEE. IN THE INSTANT CASE, THE DEBT WAS NEVER TAKEN INTO ACCOUNT IN THE P/L A/CS OR IN COMPUTING THE INCOME OF THE ASSE SSEE. DURING THE YEAR ITSELF THERE WAS ON ADDITION OF DEBT AMOUN TING TO RS.717.75 LAKHS WHICH WAS NEITHER ACCOUNTED FOR IN THE P/L A/CS NOR IN COMPUTING INCOME OF THE ASSESSEE. AGAIN . ASSESSEE WAS NEITHER A BANKING INSTITUTION NOR A MONEY LENDE R. ASSESSEE SIMPLY CREATED A FUND FROM ITS OWN CONTRIBUTION AND INCURRED EXPENDITURE ON BEHALF OF ITS SUBSIDIARY (ECL) FROM THAT FUND TO BE RECOVERED ONLY AFTER THE MINING ACTIVITIES IN TH E BLOCK OF ECL WAS PROJECTISED AND IMPLEMENTED BY THE ECL WHICH WA S AGAIN CONTINGENT IN NATURE. THEREFORE, ALLOWANCE OF DEBT OF RS.360.06 LAKHS U/S .36(1)(VII) WAS IRREGULAR WHICH WAS REQUIRED TO BE DISALLOWED. OMISSION RESULTED IN UNDERASSESSMENT OF INCOME BY RS.360.06 LAKHS WITH CONSEQUENTIAL TAX EFFECT OF RS.163,15,409/-. 12. A PERUSAL OF THE REASONS RECORDED BY THE ASSESS ING OFFICER ALSO MAKES IT ABUNDANTLY CLEAR THAT THE ASSESSMENT ORIGI NALLY COMPLETED BY HIM UNDER SECTION 143(3) WAS REOPENED BY THE ASSESS ING OFFICER ON THE BASIS OF THE SAME MATERIAL AS WAS AVAILABLE BEFORE HIM WHILE COMPLETING THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) AND TH ERE WAS NO NEW TANGIBLE MATERIAL THAT HAD COME TO HIS POSSESSION O N THE BASIS OF WHICH THE ASSESSMENT WAS REOPENED BY HIM. IN THE CASE OF CIT VS KELVINATOR OF INDIA LTD. 320 ITR 561, HON'BLE SUPREME COURT HAS H ELD THAT AFTER THE AMENDMENT MADE WITH EFFECT FROM 1ST APRIL, 1989 IN THE RELEVANT PROVISIONS, THE ASSESSING OFFICER HAS TO HAVE REASO N TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, BUT THIS DOES NOT IM PLY THAT THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON THE M ERE CHANGE OF OPINION. EXPLAINING FURTHER, HON'BLE APEX COURT HAS OBSERVED THE CONCEPT OF 'CHANGE OF OPINION' MUST BE TREATED AS IN-BUILT TEST TO CHECK THE ABUSE OF POWER AND HENCE THE ASSESSING OFFICER, EVEN AFTE R THE AMENDMENT MADE IN THE RELEVANT PROVISIONS FROM APRIL 1, 1989, HAS THE POWER TO REOPEN AN ASSESSMENT PROVIDED THAT THERE IS TANGIBL E MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. ITA NOS. 1346 & 1347/KOL/2015 A.YS. 2006-2007 & 2007-2008 M/S. COAL INDIA LIMITED 9 APPLYING THE RATIO LAID DOWN BY THE SUPREME COURT I N THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA), WE FIND OURSELV ES IN AGREEMENT WITH THE LD. CIT(APPEALS) THAT THE REOPENING OF ASSESSMENT M ADE BY THE ASSESSING OFFICER IN THE PRESENT CASE WAS BAD IN LAW AS THE S AME WAS BASED MERELY ON THE CHANGE OF OPINION AND THE ASSESSMENT COMPLET ED BY HIM UNDER SECTION 143.(3)/147 IN PURSUANCE THEREOF WAS LIABLE TO BE CANCELLED BEING INVALID. WE ACCORDINGLY UPHOLD THE IMPUGNED ORDER O F THE LD. CIT(APPEALS) ON THIS ISSUE AND DISMISS THE APPEAL O F THE REVENUE FOR A.Y. 2007-08. 13. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 07, 2018. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT (KZ) KOLKATA, THE 7 TH DAY OF DECEMBER, 2018 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, 3 RD FLOOR KOLKATA-700 069 (2) M/S. COAL INDIA LIMITED, PREMISES NO. 04, MAR, PLOT NO. AF-III, ACTION AREA-1A, KOLKATA-700 156 (3) COMMISSIONER OF INCOME TAX (APPEALS)-8, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.