THE DCIT CIR 3(1), MUMBAI V. M/S. GUJARAT AMBUJA CEMENTS LTD, MUMBAI

ITA 1350/MUM/2008

• Counselvise Citation: 135019914 RSA 2008
• Duration Of Justice: 3 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 25-01-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 25-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Search and seizure; Question of law; Difference of opinion; Revised return; Reason to believe; Change of opinion
• Section: 143(3); 142(1); 80HHC; 147; 148; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) AND SHRI R.K. PANDA (A.M.) ITA NO. 1350/MUM /2008 ASSESSMENT YEAR 1999-2000 ITA NO. 1341/MUM /2008 ASSESSMENT YEAR 2002-03 D.C.I.T. CIRCLE 3(1), ROOM NO. 607, AAYAKAR BHVAN, MUMBAI. VS. M/S GUJARAT AMBUJA CEMENTS LTD., 122, MAKER CHAMBER III, NARIMAN POINT, MUMBAI 400021. PAN : AAACG 0569P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PAVAN VED RESPONDENT BY : SHRI SOUMEN ADAK O R D E R PER D.K. AGARWAL, J.M. THESE TWO APPEALS PREFERRED BY THE REVENUE ARE DIR ECTED AGAINST SEPARATE ORDERS BOTH DATED 30.11.2007 PASSED BY THE LD. CIT (A) FOR THE A.YS. 1999-2000 & 2002-03. SINCE FACTS ARE IDENTICA L AND ISSUE INVOLVED IS COMMON, BOTH THESE APPEALS ARE DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED FACTS OF THE CASE EXTRACTED FROM ITA NO. 1350/M/2008 FOR A.Y. 1999-2000 ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF CEMENT AN D GENERATION OF POWER, FILED ORIGINAL AND REVISED RETURNS DECLARING TOTAL INCOME AT ` NIL HOWEVER, THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 15.03.2002 DETERMINING THE TOTAL INCOME AT ` 1,44,69,320/- UNDER ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 2 NORMAL PROVISIONS OF THE ACT AND ` 18,16,24,390/- UNDER THE MAT PROVISIONS BY DCIT-3(1), MUMBAI. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S 147 BY ISSUE OF NOTICE U/S 148 DTD. 28 .3.2008 AFTER RECORDING THE FOLLOWING REASONS (PAGE 41 P.B.):- REASONS RECORDED FOR RE-OPENING OF ASSESSMENT U/S .148 RETURN OF INCOME IN THIS CASE WAS FILED ON 22-08-2 000 DECLARING TOTAL INCOME AT ` NIL. THE ASSESSMENT U/S.143(3) WAS COMPLETED ON 15 -03- 2002 AT ` 18,16,24,390/- U/S. 115JB. IN THE NORMAL COMPUTATI ON OF INCOME, THE ASSESSEE HAS BEEN ALLOWED DEDUCTION U/S .80 IA AT ` 75,48,02,264/- AND U/S.80HHC AT ` 3,33,55,624/-. AS PER SECTION 80IA(9), WHICH IS REPRODUCED HERE BE LOW STATES THAT WHERE ANY AMOUNT OF PROFIT AND GAINS OF AN UNDERTA KING OR OF AN ENTERPRISE IN THE CASE OF AN ASSESSEE IS CLAIMED AN D ALLOWED UNDER THIS SECTION FOR ANY A.Y, DEDUCTION TO THE EXTENT O F SUCH PROFITS AND GAINS SHALL NOT BE ALLOWED UNDER ANY OTHER PROVISIO NS OF THIS CHAPTER UNDER THE HEADING C DEDUCTIONS IN RESPECT OF CERTAIN INCOME AND SHALL IN NO CASE EXCEED THE PROFITS AND GAINS OF SUCH ELIGIBLE BUSINESS AS THE CASE MAY BE. IN THE CASE OF THE ASSESSEE AFTER REDUCING DEDUCTIO N U/S.80IA, THE RESULTANT FIGURE COMES TO NEGATIVE. (1,52,26,61,946 75,48,02,264 = (-) 23,21,40,323/-). THE DEDUCTION ALLOWED IN THE NORMAL COMPUTATION AS WELL AS U/S.115 JB IS IRREGULAR. HEN CE, THE ASSESSEE WOULD NOT BE ELIGIBLE FOR CLAIM OF DEDUCTI ON U/S.80HHC. I HAVE, THEREFORE, REASON TO BELIEVE THAT INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY THE REASON OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT YEAR 1999-2000. HOWEVER, SINCE FOUR YEARS HAVE LAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THE INCOME ESCAPED ASSESSMENT E XCEEDS ` 1 LAKH, CITS APPROVAL IS SOLICITED FOR RE-OPENING THE ASSE SSMENT. (DR. RAN SINGH) DY. COMMISSIONER OF INCOME TAX RANGE 3(1), MUMBAI. DATED 23.3.2006. ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 3 IN RESPONSE TO NOTICE ISSUED U/S 142(1) AND THE REA SONS RECORDED BY THE A.O., THE ASSESSEE FILED OBJECTION INTER ALIA STATI NG AS UNDER (PAGE 2 OF THE ASSESSMENT ORDER) :- THE TIME LIMIT OF FOUR YEARS FROM THE END OF THE RE LEVANT ASSESSMENT YEAR FOR REOPENING THE ASSESSMENT HAS BEEN ALREADY LAPSE D ON 31.03.2004. ACCORDINGLY, THE NOTICE ISSUED IS INVALID. WHERE F OUR YEARS HAVE LAPSED AND THE INCOME LIKELY TO ESCAPE ASSESSMENT IS ` 1 LAKH OR MORE, THE CIT APPROVAL IS REQUIRED WHICH HAS NOT BEEN SENT TO US ALONG WITH THE ABOVE REFERRED NOTICE. ACCORDINGLY, THE NOTICE ISSUED IS INVALID. THE A.O. AFTER CONSIDERING THE SAME DISPOSED OF THE ABOVE OBJECTION VIDE ORDER DATED 26 TH AUGUST, 2006 WHEREIN IT HAS BEEN MENTIONED THAT TH E ASSESSMENT WAS RE-OPENED BY RECORDING THE REASONS O N 23 RD MARCH, 2006 AND TAKING ADMINISTRATIVE APPROVAL ON 28 TH MARCH, 2006. ON MERITS, THE ASSESSEE VIDE LETTER DATED 4 TH AUGUST, 2006 INTER ALIA SUBMITTED THAT .... AS PER SECTION 80HHC, PROFITS OF THE BUSINESS ARE T O BE COMPUTED IN ABOVE MANNER ONLY & DOES NOT REQUIRE ANY ADJUSTMENT TOWARDS SECTION 80IA (9). THE DEDUCTION U/S 80 IA IS COMPUTED FOR PARTICULAR ELIGIBLE UNIT WHEREAS DEDUCTION U/S 80 HHC IS COMPUTED ON PROFIT OF THE BUSINESS AS A WHOLE. ACCORDINGLY, THE DEDUCTION GRANTED U/S 80 HHC IS IN ORDER AND HAS BEEN CORRECTLY WORKED OUT AND DEDUCTED FROM THE BOOK PROFIT. IN VIEW OF THE ABOVE YOUR GOODSELF WILL KINDLY APPRECIATE T HAT THERE HAS BEEN NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRU LY AND FULLY ALL MATERIAL FACTS NECESSARY FOR THE ABOVE ASSESSMENT YEAR AND F URTHER NO INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND ACCORD INGLY WE REQUEST YOUR GOODSELF TO DROP THE ASSESSMENT PROCEEDINGS RE LATING TO REOPENING OF ASSESSMENT U/S 148 OF THE ACT. HOWEVER, THE A.O. W AS OF THE VIEW THAT FOR CALCULATING DEDUCTION U/S 80HHC, THE PROFITS O F THE BUSINESS IS TAKEN WITHOUT DEDUCTING THE AMOUNT OF ` 75,48,02,264/- (U/S 80IA). IF THIS AMOUNT IS CONSIDERED THE PROFITS OF BUSINESS W ILL BE A NEGATIVE FIGURE (52,26,61,946-75,48,02,264) 23,21,40,323/-. ACCORD INGLY, THE DEDUCTION ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 4 U/S 80HHC IS NOT ALLOWABLE TO THE ASSESSEE, AND AC CORDINGLY COMPLETED THE ASSESSMENT AT AN INCOME OF ` 1,82,83,180/- VIDE ORDER DATED 18.09.2006 PASSED U/S 143(3) R.W.S. 147 OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) WHILE QUASHING THE NOT ICE ISSUED U/S 148 AND PASSING OF U/S 143(3) R.W.S. 147 HAS HELD VIDE PARA NO. 3.6 OF HIS ORDER AS UNDER:- 3.6 IN VIEW OF THE ABOVE SUBMISSIONS BACKED BY INC ONTROVERTIBLE FACTS AND PROVISIONS OF LAW, IT IS ABUNDANTLY CLEAR THAT NO NEW INFORMATION CAME INTO THE POSSESSION OF THE I.T.O. WHICH LEADS HIM TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. NO SUCH CONTENTION H AS ALSO BEEN RAISED OR FINDING HAS BEEN GIVEN BY THE I.T.O. TO T HAT EFFECT. FURTHER, AS RIGHTLY POINTED OUT BY THE APPELLANT, THE DEDUCTION DENIED I.E. DEDUCTION U/S.80HHC, IN THE IMPUGNED ORDER WERE ALREADY CONS IDERED BY THE I.T.O. IN THE ORDER U/S. 143(3) AS EVIDENT FROM THE SAID ORDER SUBMITTED DURING THE COURSE OF APPELLATE PROCEEDINGS. THUS, T HIS IS A CLEAR CASE OF CHANGE OF OPINION. MOREOVER, IN THE INSTANT CASE NO TICE U/S.147/148 HAS BEEN ISSUED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IN VIEW OF THE EXPRESS PROVISIONS OF THE PROVISO TO SEC.147 AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. BHANJI LAVJI (1971) 79 ITR 582 (SUPREME COURT) & OT HER DECISIONS RELIED UPON BY THE APPELLANT, INITIATION OF REASSESSMENT P ROCEEDINGS AND PASSING OF THE ORDER U/S.143(3) R.W.S 147 IS BARRED BY LIMITATION. THE AFORESAID VIEW IS FURTHER FORTIFIED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ AGROVET LTD. VS. ACIT ( 2007) 290 ITR 252 (BOM). THUS, IT IS HELD THAT INITIATION OF PROCEEDI NGS U/S.147/148 AND PASSING OF ORDER U/S.143(3) R.W.S. 147 IS VOID AB I NITIO BEING TIME BARRED AND IS HEREBY QUASHED. THUS, THE GROUND IS ALLOWED IN FAVOUR OF THE APPELLANT. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE INITIATION OF PROCEEDINGS U/S 147/148 AND PASSING OF ORDER U/S 143(3) R.W.S. 147 IS VOID AB INITIO BEING TIME BARRED AND IS HENCE QUASHED WITHOUT APPRECIATING TH E FACT THAT THE NOTICE U/S 147/148 WHICH WAS ISSUED WITHIN 6 YEARS FROM THE END OF RELEVANT ASSESSMENT WITH THE APPROVAL OF CIT IS STA TUTORY VALID. ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 5 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. ADDITIONAL GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE A.O. WAS NOT R IGHT IN REDUCING DEDUCTION U/S 80IA FROM PROFIT OF THE BUSINESS FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 80HHC, IN VIEW OF THE PROVISION OF SUB SECTION 9 OF SEC. 80IA, BOTH FOR THE PURPOSE OF COM PUTATION OF INCOME UNDER NORMAL PROVISION AS WELL AS COMPUTATION U/S 1 15JA. 5. AT THE TIME OF HEARING, THE LD. D.R. WHILE RELYI NG ON THE ORDER OF THE A.O. AND THE LD. CIT(A) VERY FAIRLY SUBMITS THAT ON MERIT, THE ISSUE IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE AS SESSEE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF ASSOCIATED CAPSULES P. LTD. V. DCIT [2011 50 DTR (BOM) 65 : [2 011] 332 ITR 42 (BOM). HE FURTHER SUBMITS THAT ON THE ISSUE OF PRO CEEDING U/S 148 OF THE ACT, THE A.O. WHILE COMPLETING THE ORIGINAL ASSESSM ENT HAS NOT CONSIDERED THE ISSUE OF ALLOWABILITY OF DEDUCTION U /S 80HHC AFTER REDUCING THE PROFITS ALLOWED AS DEDUCTION U/S 801A, THEREFORE, IT IS NOT A CASE OF MERE CHANGE OF OPINION AND THEREFORE THE A. O. WAS JUSTIFIED IN RE- OPENING THE ASSESSMENT U/S 148 EVEN AFTER 4 YEARS A FTER TAKING ADMINISTRATIVE APPROVAL ON 28 TH MARCH, 2006. THE LD. D.R. WHILE REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ADDL. CIT VS. GURJARGRAVURES (P.) LTD. [1978] 111 ITR 1 ( SC), THE ATTENTION WAS DRAWN AT PAGE NO. 4 OF 111 ITR WHEREIN THEIR LORDSH IPS HAVE EXTRACTED THE MEANING OF CONSIDERATION FROM THE DECISION IN CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA [1967] 66 ITR 443 (SC) A T PAGE NO. 451 AS UNDER:- CONSIDERATION DOES NOT MEAN INCIDENTAL OR COLLATER AL EXAMINATION OF ANY MATTER BY THE INCOME-TAX OFFICER IN THE PROCESS OF ASSESSMENT. THERE MUST BE SOMETHING IN THE ASSESSMENT ORDER TO SHOW T HAT THE INCOME-TAX OFFICER APPLIED HIS MIND TO THE PARTICULAR SUBJECT- MATTER OR THE PARTICULAR SOURCE OF INCOME WITH A VIEW TO ITS TAXABILITY OR T O ITS NON-TAXABILITY AND NOT TO ANY INCIDENTAL CONNECTION. ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 6 IN THE LIGHT OF THE ABOVE, HE SUBMITS THAT SINCE NO THING HAS BEEN RECORDED IN THIS REGARD IN THE ASSESSMENT ORDER, TH EREFORE, THE A.O. HAS NOT CONSIDERED THE ISSUE WHILE MAKING ASSESSMENT U/ S 143(3) OF THE ACT AND THEREFORE THE A.O. WAS JUSTIFIED IN REOPENING T HE ASSESSMENT U/S 148. HE FURTHER SUBMITS THAT THE HONBLE JURISDICT IONAL HIGH COURT IN ASSOCIATED CAPSULES P. LTD. (SUPRA) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HAS NOT CONSIDERED THE SECOND PART OF SECTION 80IA(9) WHICH READS AS UNDER:- SECOND PART DEDUCTION TO THE EXTENT OF PROFITS AND GAINS ALLOWED UNDER SECTION 80IA(1) SHALL NOT BE ALLOWED UNDER ANY OTHE R PROVISIONS UNDER HEADING C OF CHAPTER VI-A OF THE ACT. THEREFORE, THE AFORESAID DECISION OF THE HONBLE JU RISDICTIONAL HIGH COURT CANNOT BE RELIED UPON. IN SUPPORT, THE LD. D.R. HA S ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN ASW INI KUMAR GHOSE AND ANOTHER A.I.R. 1952 SUPREME COURT 369 WHEREIN I T HAS BEEN OBSERVED AND HELD THAT:- IT IS NOT A SOUND PRINCIPLE OF CONSTRUCTION TO BRU SH ASIDE WORDS IN A STATUTE AS BEING INAPPOSITE SURPLUSAGE, IF THEY CAN HAVE APPROPRIATE APPLICATION IN CIRCUMSTANCES CONCEIVABLY WITHIN THE CONTEMPLATION OF THE STATUTE. HE, THEREFORE, SUBMITS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN QUASHING THE ASSESSMENT ORDER PASSED U/S 143(3)/147 OF THE A CT, THEREFORE, THE SAME BE UPHELD. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE RELYING ON THE ORDER OF THE LD. CIT(A) SUBMITS THAT THE ASS ESSEE HAS DULY FILED CERTIFICATE OF CHARTERED ACCOUNTANTS IN FORM NO. 10 CCAC ALONG WITH ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 7 ORIGINAL AND REVISED RETURN APPEARING AT PAGE NO. 1 6-18 AND 30-32 OF THE ASSESSEES PAPER BOOK TO SHOW THE COMPUTATION OF DE DUCTION U/S 80HHC. IN BOTH CASES, THE DEDUCTION U/S 80HHC WAS COMPUTED WITHOUT REDUCING DEDUCTION U/S 80IA ON PROFIT FROM POWER GENERATING UNIT. HE FURTHER SUBMITS THAT THE ABOVE CLAIM OF THE ASSESSEE WAS AC CEPTED BY THE A.O. IN THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 15.3.2 002 VIDE PARA NO. 27 OF THE ASSESSMENT ORDER WHEREIN THE A.O. AFTER D ISCUSSING THE ISSUE AT PAGE NO. 30 & 31 OF THE ASSESSMENT ORDER HAS HELD T HAT THE ADMISSIBLE U/S 80HHC WORKS OUT TO ` 3,33,55,264/- AND THEREFORE, THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80HHC AS PER CLAUSE (VII I) OF EXPLANATION BELOW SECTION 115JA OF THE ACT. HE FURTHER SUBMIT S THAT SINCE THE ASSESSEE HAS FILED COMPLETE DETAILS WHICH HAS BEEN DULY EXAMINED BY THE A.O., THERE WAS NO FAILURE ON THE PART OF THE ASSES SEE AND, THEREFORE, NOTICE ISSUED BY THE A.O. U/S 148 DTD. 28.3.2006 IS BEYOND THE PERIOD OF 4 YEARS AND HENCE NOT VALID IN LAW. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIO NAL HIGH COURT IN GODREJ AGROVET LTD. VS. ACIT (2007) 290 ITR 252 (BO M.) WHEREIN IT HAS BEEN HELD THAT REASSESSMENT INITIATED DUE TO FAILUR E ON THE PART OF THE A.O. TO CONSIDER THE EFFECT OF SEC. 80-IB(13) R.W. SEC. 80IA(9) FOR COMPUTATION OF DEDUCTION U/S 80HHC IN THE REGULAR A SSESSMENT IS NOT JUSTIFIED AS REOPENING IS BASED ON THE FACTS WHICH ARE ALREADY ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS TH AT THE REOPENING OF ASSESSMENT AFTER 4 YEARS IS INVALID IN VIEW OF PROV ISO TO SEC. 147 AS: I) ALL THE MATERIAL FACTS WERE AVAILABLE ON RECORD II) NO NEW INFORMATION CAME TO THE POSSESSION OF THE A. O. III) NO FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 8 HE FURTHER SUBMITS THAT UNDER SIMILAR CIRCUMSTANCES , PROCEEDINGS U/S 147 HAVE BEEN HELD TO BE INVALID BY ITAT IN RESPOND ENTS OWN CASE IN GUJARAT AMBUJA CEMENTS LIMITED VS. DY. CIT AND VICE -VERSA IN ITA NO. 233/M/04 FOR THE ASSESSMENT YEAR 1994-95VIDE PARA 2 2 OF THE ORDER DATED 27.2.2008 AND IN ITA NO. 2484/M/05 FOR THE A.Y. 1996-97 VIDE PARA NO.36 OF ORDER DATED 27.10.2008. HE ALSO PLACED ON RECORD THE SAID COPY OF THE ORDERS APPEARING AT PAGE 53 TO 76 OF THE ASS ESSEES PAPER BOOK. HE FURTHER SUBMITS THAT DEPARTMENTAL APPEAL BEFORE HON BLE HIGH COURT AGAINST THE ORDER OF THE ITAT IN ITA NO. 233/M/04 F OR A.Y. 1994-95 HAS BEEN DISMISSED VIDE ORDER DATED 26.02.09 (PAPER BOO K PAGE 84). HE FURTHER SUBMITS THAT THE SIMILAR ISSUE HAS BEEN DEC IDED BY THE TRIBUNAL IN THE FOLLOWING CASES:- (I) DCIT VS. WARTSILA INDIA LTD. IN ITA NO. 2710/M/2009 FOR A.Y. 2000-01 ORDER DATED 20.8.2010. (II) ACIT VS. SHRI AMITABH BACHCHAN IN ITA NO. 2994/M/20 08 FOR A.Y. 2002-03 ORDER DATED 19.3.2010. (III) ACC LTD. VS. DCIT IN ITA NO. 5067/M/2008 FOR A.Y. 2 001-02 ORDER DATED 31.3.2010. THE RELIANCE WAS ALSO PLACED ON THE DECISION IN CIT VS. KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC) AND IDEA CELLULAR LTD. DCIT & OTHERS (2008) 301 ITR 407 (BOM.). HE THEREFORE SUBMITS THAT THE O RDER PASSED BY THE LD. CIT(A) IN QUASHING THE ASSESSMENT ORDER PASSED U/S 143(3)/147 BE UP HELD. 7. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE TH AT THE ISSUE OF ALLOWING DEDUCTION U/S 80IA(9) IS COVERED IN FAVOUR OF THE A SSESSEE, FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF ASSOCIATED ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 9 CAPSULES P. LTD. (SUPRA) WHEREIN IT HAS BEEN HELD ( PAGE 43 OF HEAD NOTE):- HELD ACCORDINGLY THAT THE TRIBUNAL WAS NOT RIGHT IN HOLDING THAT SECTION 80-IA(1) OF THE ACT, MANDATES THAT THE AMOUNT OF PR OFITS ALLOWED AS DEDUCTION UNDER SECTION 80 IA(1) OF THE ACT HAVE TO BE REDUCED FROM THE PROFITS OF THE BUSINESS OF THE UNDERTAKING WHILE CO MPUTING DEDUCTION UNDER ANY OTHER PROVISIONS UNDER HEADING C IN CHAPT ER VI-A OF THE ACT. 8. WE FURTHER FIND THAT IN GODREJ AGROVET LTD. VS. ASST. C.I.T. & OTHERS [2007] 290 ITR 252 (BOM) IT HAS BEEN HELD (P AGE 253 HEAD NOTE):- HELD, THAT THE FACT THAT SOME OF THE UNITS OF THE ASSESSEE WERE INCURRING LOSSES HAD NO RELEVANCE FOR COMPUTATION OF DEDUCTIO N UNDER SECTION 80HHC. ADMITTEDLY, THERE WERE PROFITS FROM THE EXP ORT ACTIVITY AND, THEREFORE, DEDUCTION GRANTED UNDER SECTION 80HHC CO ULD NOT BE FAULTED. IT WAS ADMITTED THAT THE ASSESSEE HAD NOT MADE EXPO RTS OF THE GOODS MANUFACTURED IN THE INDUSTRIAL UNITS ELIGIBLE FOR D EDUCTION UNDER SECTION 80-IB. IF THE GOODS MANUFACTURED IN THE UNITS AVAI LING OF DEDUCTION UNDER SECTION 80-IB WERE NOT EXPORTED, THEN OBVIOUS LY THE GOODS MANUFACTURED IN THOSE UNITS WOULD NOT BE TAKEN INTO ACCOUNT FOR COMPUTATION OF DEDUCTION UNDER SECTION 80HHC. IN TH AT EVENT, THE QUESTION OF APPLYING THE PRINCIPLES LAID DOWN IN SE CTION 80-IA(9) WHILE COMPUTING THE DEDUCTION UNDER SECTION 80HHC DID NOT ARISE AT ALL. THUS FROM THE REASONS RECORDED AND THE AFFIDAVIT IN REPL Y FILED ON BEHALF OF THE REVENUE, IT WAS SEEN THAT THERE WERE NO REASONS ON THE BASIS OF WHICH PRIMA FACIE IT COULD BE SAID THAT INCOME HAD ESCAPE D ASSESSMENT. ALTHOUGH IT WAS ALLEGED THAT THERE WAS FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS, IN FACT THE REOPENING WAS BASED ON THE FACTS WHICH WERE ALREADY ON RECORD. T HEREFORE, IT COULD NOT BE SAID THAT THE ASSESSEE HAD FAILED TO DISCLOSE FU LLY AND TRULY ALL MATERIAL FACTS. THE NOTICE WAS LIABLE TO BE QUASHED. 9. IN ASSESSEES APPEAL GUJARAT AMBUJA CEMENTS LIMI TED IN ITA NO. 233/M/04 FOR A.Y. 94-95 ORDER DATED 27.02.2008(SUPR A), IT HAS BEEN HELD VIDE PARA NO. 22 OF THE ORDER AS UNDER:- IN SHORT, THERE IS NO CASE FOR THE REVENUE THAT TH ERE WAS ANY INCOME ESCAPING ASSESSMENT DUE TO FAILURE OF THE AS SESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS. THERE IS A LSO NO CASE FOR THE REVENUE THAT THE ASSESSMENT HAS BEEN REOPENED AFTER THE COMPLETION OF FOUR YEARS BECAUSE SOME NEW MATERIALS HAS COME TO T HE POSSESSION OF THE REVENUE. IN VIEW OF THE ABOVE, IN THE LIGHT OF THE DECISIONS OF THE HONBLE ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 10 BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LT D. REPORTED IN 268 ITR 332 (BOM) AND 251 ITR 209 (BOM) (SUPRA), WE ARE OF THE VIEW THAT REOPENING WAS BAD IN LAW AND WITHOUT JURISDICTION. HENCE, THE APPEAL BY THE ASSESSEE ON THIS GROUND IS ALLOWED. THE ABOVE ORDER HAS BEEN UPHELD BY THE HONBLE JURI SDICTIONAL HIGH COURT IN THE APPEAL FILED BY THE REVENUE VIDE ORDER DATED 26.02.2009 HOLDING THAT IN OUR OPINION CONSIDERING THE FINDING RECORDED BY THE TRIBUNAL IN PARA 18 OF ITS ORDER THE QUESTION AS RA ISED DOES NOT ARISE AND CONSEQUENTLY THE APPEAL IS DISMISSED. 10. IN CIT VS. (1) KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 (SC) IT HAS BEEN HELD (PAGE 564) :- ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, REOPENING COULD BE DONE UNDER THE ABOVE TWO CONDITIONS AND FULFILMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT I N SECTION 147 OF THE ACT (WITH EFFECT FROM 1ST APRIL, 1989), THEY ARE G IVEN A GO-BY AND ONLY ONE CONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSES SING OFFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSME NT, CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. THEREFORE, P OST-1ST APRIL, 1989, POWER TO REOPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS 'REASON TO BELIEVE' FA ILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION', WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KEE P IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND P OWER TO REASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW ; HE H AS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFI LMENT OF CERTAIN PRECONDITIONS AND IF THE CONCEPT OF 'CHANGE OF OPIN ION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK AB USE OF POWER BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, TH E ASSESSING OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS 'TANGIBLE MATERI AL' TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BE LIEF........ 11. IN IDEA CELLULAR LTD. VS. D.C.I.T. [2008] 301 ITR 4 07 (BOM) IT HAS BEEN HELD (PAGE 408) :- ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 11 HELD THAT THERE WAS A FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS PLACED BEFORE THE ASSESSING OFFICER AT THE FIRST IN STANCE AND THUS THERE WAS NO SUPPRESSION OF ANY MATERIAL FROM THE ASSESSI NG OFFICER. THIS WAS A CASE IN WHICH THE ASSESSING OFFICER HAD RAISED SP ECIFIC QUERIES ON SEVERAL OCCASIONS AND ALL THE QUERIES HAD BEEN ANSW ERED. ONCE ALL THE MATERIAL WAS BEFORE THE ASSESSING OFFICER AND HE CH OSE NOT TO DEAL WITH THE SEVERAL CONTENTIONS RAISED BY THE PETITIONER IN HIS FINAL ASSESSMENT ORDER, IT COULD NOT BE SAID THAT HE HAD NOT APPLIED HIS MIND. THE EXPLANATION TO SECTION 147 WAS NOT APPLICABLE. THE NOTICE OF REASSESSMENT WAS NOT VALID AND WAS LIABLE TO BE QUA SHED. 12. SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENCHES OF THE TRIBUNAL IN VARIOUS CASES AS REFERRED HEREINABOVE. 13. APPLYING THE RATIO OF THE ABOVE DECISIONS TO TH E FACTS OF THE PRESENT CASE, WE ARE OF THE VIEW THAT SINCE THE ASSESSEE HA S DISCLOSED ALL MATERIAL FACTS IN THE ORIGINAL RETURN AS WELL AS IN THE REVI SED RETURN WHICH HAS BEEN DULY CONSIDERED BY THE A.O. WHILE MAKING THE O RIGINAL ASSESSMENT U/S 143(3) OF THE ACT, THE REOPENING OF THE ASSESSM ENT ON THE SAME MATERIAL AMOUNTS TO A MERE CHANGE OF OPINION CAN NOT PER SE BE REASON TO RE-OPEN WITHIN THE MEANING OF SECTION 147 OF THE ACT. EVEN OTHERWISE ON MERITS THE ASSESSEES CASE IS FULLY COVERED BY T HE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AS SOCIATED CAPSULES PVT. LTD. (SUPRA) WHEREIN THE HONBLE JURISDICTIONAL HIG H COURT CONSIDERING THE PROVISIONS OF THE ACT AND ALL THE DECISIONS, HA S HELD (PAGE 55 PLACITUM 41):- ......THAT SECTION 80IA(9) DOES NOT AFFECT THE COM PUTABILITY OF DEDUCTION UNDER VARIOUS PROVISIONS UNDER HEADING C OF CHAPTER VI-A, BUT IT EFFECTS THE ALLOWABILITY OF DEDUCTIONS COMPUTED UNDER VARIO US PROVISIONS UNDER HEADING C OF CHAPTER VI-A, SO THAT THE AGGREGATE DE DUCTION UNDER SECTION 80IA AND OTHER PROVISIONS UNDER HEADING C OF CHAPT ER VI-A DO NOT EXCEED 100 PER CENT OF THE PROFITS OF THE BUSINESS OF THE ASSESSEE...... ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 12 14. AS REGARDS THE PLEA TAKEN BY THE LD. D.R. THAT THE HONBLE JURISDICTIONAL HIGH COURT IN ASSOCIATED CAPSULES PV T. LTD. (SUPRA) HAS NOT CONSIDERED THE SECOND PART DEDUCTION TO THE EXTENT OF PROFITS AND GAINS ALLOWED UNDER SECTION 80IA(1) SHALL NOT BE ALLOWED UNDER ANY OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI-A OF THE A CT, WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT AFTER REPRODUCIN G THE RELEVANT SECTION 80IA(9) AT PLACITUM 29 OF PAGE 51 OF 332 ITR HAS DI SCUSSED THE SAME AT LENGTH IN PLACITUM 30 ONWARDS AND DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE, THEREFORE, T HE PLEA TAKEN BY THE LD. D.R. THAT SECOND PART OF THE SECTION HAS NOT BE EN CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IS DEVOID OF ANY MERIT AND THEREFORE THE DECISION IN ASWINI KUMAR GHOSE (SUPRA) RELIED UPO N BY THE LD. D.R. IS ALSO DISTINGUISHABLE AND NOT APPLICABLE TO THE PRES ENT CASE. 15. FURTHER IN NATIONAL TEXTILE CORPORATION VS. CIT (2008) 216 CTR (M.P) 153, IT HAS BEEN HELD THAT THE TRIBUNAL HAS T O FOLLOW THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT WITHOUT MAKIN G ANY COMMENT UPON THE SAID DECISION; IT IS NOT PERMISSIBLE FOR THE TR IBUNAL TO SIDE TRACK AND/OR IGNORE THE DECISION OF THE HONBLE JURISDICT IONAL HIGH COURT ON THE GROUND THAT IT DID NOT TAKE INTO CONSIDERATION A PARTICULAR PROVISION OF LAW. RESPECTFULLY FOLLOWING THE SAME, THE PLEA TAKEN BY THE LD. D.R. IS AGAINST THE JUDICIAL DISCIPLINE AND THE SAME IS, TH EREFORE, REJECTED. 16. AS REGARDS THE RELIANCE PLACED BY THE LD. D.R. ON THE DECISION OF ADDL. CIT VS. GURJARGRAVURES (P.) LTD. (SUPRA) ON T HE ISSUE OF CONSIDERATION WE OBSERVE THAT THE SAID JUDGMENT I S ON THE POWERS OF THE COMMISSIONER (APPEALS) U/S 251 OF THE ACT. THE HON BLE APEX COURT IN JUTE CORPORATION OF INDIA LTD. VS. CIT & ANOTHER (1 991) 187 ITR 688 HAS OBSERVED AT PAGE 694 OF THE REPORT THAT :- ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 13 ........IT APPEARS FROM THE REPORT OF THE DECISION IN THE GUJARAT CASE THAT THE THREE-JUDGE BENCH DECISION IN KANPUR COAL SYNDI CATE CASE [1964] 53 ITR 225 (SC) WAS NOT BROUGHT TO THE NOTICE OF THE B ENCH IN THE GURJARGRAVURES P. LTD. [1978] 111 ITR 1 (SC). IN TH E CIRCUMSTANCES, THE VIEW OF THE LARGER BENCH IN KANPUR COAL SYNDICATE C ASE [1964] 53 ITR 225 (SC) HOLDS THE FIELD. HOWEVER, WE DO NOT CONSI DER IT NECESSARY TO OVERRULE THE VIEW TAKEN IN GURJARGRAVURES P. LTD. C ASE [1978] 111 ITR 1 (SC), AS, IN OUR OPINION, THAT DECISION IS FOUNDED ON THE SPECIAL FACTS OF THE CASE...... 17. IN NATIONAL THERMAL POWER CO. LTD. V. CIT 229 ITR 3 83 THEIR LORDSHIPS AFTER CONSIDERING THE DECISION IN JUTE CO RPORATION OF INDIA LTD. VS. CIT [1991] 187 ITR 688 (SC) HAVE HELD (HEAD NOT E) :- HELD THAT THE TRIBUNAL HAD JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH AROSE FROM THE FACTS AS FOUND BY THE INCOME-T AX AUTHORITIES AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESS EE. 18. IN CIT VS. SUN ENGINEERING WORKS PVT. LTD. (199 2) 198 ITR 297 (SC) IT HAS BEEN OBSERVED (HEAD NOTE PAGE 299):- IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OU T A WORD OR A SENTENCE FROM THE JUDGMENT OF THE SUPREME COURT DIVORCED FRO M THE CONTEXT OF THE QUESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COMPLETE LAW DECLARED BY THE COURT. THE JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGMENT HAVE TO BE CONSIDERE D IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THE COURT. A DECISION OF THE SUPREME COURT TAKES ITS COLOUR FROM THE QUESTIONS INVOLVED IN THE CASE IN WHICH IT IS RENDERED AND, WHILE APPLYING THE DECISION TO A LATE R CASE, COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION. 19. IN THE LIGHT OF THE RATIO OF THE ABOVE DECISION S REFERRED IN PARAS 16 TO 18 OF THIS ORDER, WE OBSERVE THAT THE LD. D.R. W HILE RELYING ON THE DECISION IN GURJARGRAVURES P. LTD. (SUPRA) HAS NOT CONSIDERED THE PRINCIPLE LAID DOWN BY THE HONBLE APEX COURT IN SU N ENGINEERING WORKS PVT. LTD. (SUPRA) AND THE OBSERVATIONS OF THE HONB LE SUPREME COURT IN JUTE CORPORATION OF INDIA LTD. (SUPRA) AND IN NATIO NAL THERMAL POWER CO. ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 14 LTD. (SUPRA), THEREFORE, THE RELIANCE PLACED BY THE LD. D.R. IS MISPLACED, DEVOID OF ANY MERIT AND HENCE REJECTED. 20. WE FURTHER FIND THAT THE LD. CIT(A) ALSO HELD T HAT SINCE THE ASSESSMENT HAS BEEN QUASHED, THE MATER DOES NOT REQ UIRE SEPARATE CONSIDERATION. WE FIND THAT THE ABOVE VIEW IS COVE RED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN COLORISERS VS. ACIT (1993) 41 ITD 57 (HYD) [SB] FOLLOWED IN THE ASSESSEES OWN CASE FOR A.Y. 1994-95 IN ITA NO. 233/MUM/04 (SUPRA) WHEREIN IT HAS BEEN HELD THAT UN DER THESE CIRCUMSTANCES, THE ISSUE ON MERIT DOES NOT REQUIRE ADJUDICATION. RESPECTFULLY FOLLOWING THE SAME, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE LD. CIT(A) ON THIS ACCOUNT ALSO. THE GROUNDS I NCLUDING THE ADDITIONAL GROUND TAKEN BY THE REVENUE ARE THEREFORE REJECTED. ITA 1341/M/08, A.Y. 2002-03. 21. AT THE TIME OF HEARING, IT HAS BEEN AGREED BY B OTH THE PARTIES THAT THE FACTS OF THE ABOVE APPEAL ARE IDENTICAL TO THE FACTS OF THE CASE OF A.Y. 1999-2000 EXCEPT THAT IN THE YEAR UNDER CONSIDERATI ON, THE CASE WAS REOPENED WITHIN 4 YEARS FROM THE END OF THE RELEVAN T ASSESSMENT YEAR, THEREFORE, THE PLEA TAKEN IN THE REVENUES APPEAL F OR A.Y. 1999-2000 MAY BE CONSIDERED WHILE DECIDING THE ABOVE APPEAL. 22. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD AND IN TH E ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REV ENUE EXCEPT THAT THE CASE HAS BEEN REOPENED WITHIN 4 YEARS FROM THE END OF THE RELEVANT A.Y., WE, FOR THE REASONS AS DISCUSSED IN THE REVENUES A PPEAL FOR A.Y. 1999- 2000 IN PARA NO. 7 TO 21 OF THIS ORDER, UPHOLD THE FINDINGS OF THE LD. ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 15 CIT(A) IN QUASHING THE ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 147 OF THE ACT. THE GROUNDS TAKEN BY THE REVENUE ARE, THE REFORE, REJECTED. 23. IN THE RESULT, THE REVENUES APPEALS STAND DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON08.04.2011 SD/- (R.K. PANDA) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 8 TH APRIL, 2011. RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- CONCERNED , MUMBAI 4. COMMISSIONER OF INCOME TAX, CONCERNED, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH G, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 16 1 DRAFT DICTATED ON 31 .3.11 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 1.4.11 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHIC H FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS ITA 1350/M/08 & ITA 1341/M/08 GUJARAT AMBUJA CEM ENTS LTD. 17