M/S. RAKESH KUMAR JAIN, JANJGIR CHAMPA V. ITO, WARD- 2(2), BILASPUR(CG)

ITA 144/BIL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0212 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 22-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: R B DOSHI
• Keywords: Depreciation; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148; 139

Judgement Text

ITA NO . 144 / RPR /201 4 ASSESSMEN T Y EAR: 200 5 - 06 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, SMC , RAIPUR [CORAM : PRAMOD KUMAR AM ] ITA NO . 144 / RPR /201 4 AS SESSMENT Y EAR : 200 5 - 06 RAKESH KUMAR J A IN , .APPELLANT RAILWAY CONTRACTOR, AKALTARA, DIST. JANJGIR - CHAMPA - 495 552. (C. G.) [P AN: A A EEJ 7046 F ] VS. INCOME TAX OFFICER , WARD 2 ( 2 ), BILASPUR (C.G.) ...... . RESPONDENT APPEARANCES BY: R .B. DOSHI, FOR THE A PPELLANT D.K. JAIN , F OR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : 2 3 .06.2 016 DATE OF PRONOUNCING THE ORDER : 22 .09.2016 O R D E R BY WAY OF TH IS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 2 8 .0 4 .201 4 , PASSED BY THE LEARNED CIT (A), BILASPUR (C.G.), IN THE MATTER OF ASSESSMENT UN DER SECTION 14 3(3) /147/148 OF THE INCOME TAX ACT, 1961 FOR ASSESSMENT YEAR 200 5 - 06 , ON THE FOLLOWING GROUNDS : - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN CONFIRMING ACTION OF ASSESSING OFFICE R IN INITIATING REASSESSMENT PROCEEDINGS ON THE BASIS OF REASONS RECORDED U/S 148(2) MERELY ON THE BASIS OF CHANGE OF OPINION ON SAME SET OF MATERIALS AFTER 4 YEARS DESPITE OF ALL MATERIAL FACTS WERE TRULY AND FULLY DISCLOSED AT THE TIME OF ORIGINAL ASSESS MENT PROCEEDINGS. 2. WITHOUT PREJUDICE TO GROUND NO.1, IN THE FACTS AND CIRCUMSTANCES OF THE CASE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING DISALLOWANCE OF RS.4,20,000/ - MADE BY ASSESSING OFFICER OUT OF CRUSHING CHARGES BY INVOKING PROVISION OF SECTION 40(A)(IA) IN SPITE OF THE FACT TH A T NO ITA NO . 144 / RPR /201 4 ASSESSMEN T Y EAR: 200 5 - 06 PAGE 2 OF 4 AMOUNT WAS PAYABLE AS AT THE END OF RELEVANT PREVIOUS YEAR IN RESPECT OF SAID SUM. 2. IT IS A CASE OF REOPENING OF A SSESSMENT. THE ASSESSMENT H A S B E EN REOPENED ON THE BASI S OF FOLLOWING RE A SON S RECORD E D BY THE A SSESSING OFFICER : - . VERIFICATION OF THE CASE RECORD OF THE ASSESSEE FOR THE A.YR. 2005 - 06 SUGGESTS THAT THE ASSESSEE HAS DEBITED RS.5,61,750/ - IN HIS PROFIT AND LOSS ACCOUNT AGAINST CRUSHING CHARGES DURING THE RELEVANT FINANCIAL YEAR. ON EXAMINATION OF THE LEDGER ACCOUNT, IT IS SEEN THAT AN AMOUNT OF RS.4,20,000/ - HA S BEEN PAID TO ONE M/S MUKESH CRUSHER STONE, WHOSE NAME HAS IN FACT BEEN REFLECTED IN SCHEDULE B AT T A CHED WITH THE AUDIT REPOR T AGAINST THE SPECIFIED PERSONS U/S.40A(2)(B ) . THE WHOLE PAYMENT IS MADE THROUGH CHEQUE ON DIFFERENT DATES WHICH EXCEEDS RS.20,000/ - ON A SINGLE PAYMENT AND ALSO THE AGGREGATE OF RS.50,000/ - FOR THE WHOLE YEAR. AS PER THE PROVISIONS OF SECTION 40A(IA), THE ASSESSEE FAILED TO DEDUCT TAX ON THE A BOV E P A YMENT OF RS.4,20,000/ - WHICH RESULTED INTO VIOLATION OF THE PROVISIONS OF SECTION 40A(IA). IN VIEW OF THE ABOVE DISCUSSION, THE TOTAL AMOUNT OF RS.4,20,000/ - SHOULD HAVE SUFFERED T A X IN THE HANDS OF THE ASSESSEE WHICH IN THE INST A NT CASE HAS NOT BEEN SO. NOW, FURTHER IT IS SEEN THAT TH E ASSESSEE H A S CLAIMED DEPRECIATION @ 25% ON TOOLS & EQUIPMENTS WHICH WAS PURCHASED AFT E R 180 DAYS OF THE RELEVANT YEAR RESULTING IN EXCE S S CLAIM OF DEPRECIATION TO THE TUNE OF RS.11,125/ - . IN THE LIGHT OF THE ABOVE DISC USSION, PRIMA - FACIE I HAVE REASONS TO BELIE V E THAT THE INCOME CHARGEABLE TO TAX H A S ESCAPED AS S ESSMENT FOR TH E A.YR. 2006 - 07. THEREFORE , A NOTICE U/S 148 IS BEING ISSUED WITH THE PRIOR APPROVAL OF THE ADDL. CIT, RANGE - 2, BILASPUR. 3. T HE ABOVE REASONS WER E RECORDED ON 16.01.2013 WHICH IS CLEARLY WELL AFTER FOUR YEARS FROM THE END OF THE RELEVANT PREVIOUS YEAR WHICH WAS SOUGHT TO BE REOPENED. THE ASSESSEE DID OBJECT TO THE REOPENING BUT WITHOUT ANY SUCCESS. THE ASSESSEE WENT IN APPEAL BEFORE THE L EARNED C IT(A) WHO UPHELD THE REOPENING OF THE ASSESSMENT. ASSESSEE I S IN FURTHER APPEAL BEFORE ME . 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. DURING T HE COURSE OF HEARING BEFORE ME I DID ASK THE L EARNED DEPARTMENTAL REPRESENTATIVE IF THERE IS ANY SUGGESTION OR LAPSE ON THE PART OF THE ASSESSEE OR IN THE REASONS FOR ITA NO . 144 / RPR /201 4 ASSESSMEN T Y EAR: 200 5 - 06 PAGE 3 OF 4 REOPENING BY THE ASSESSING OFFICER. LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT THE S A ME. IT IS IMPORTANT TO BEAR IN MIND THAT IN TERM OF STATUTORY REQUIREMENT IN THE CASE WHERE ORIGIN A L ASSESSMENT IS COMPLETED UNDER SECTION 143(3) , THE REASSESSMENT PROCEEDINGS CANNOT BE INITI ATED BEFORE FOUR YEARS FROM THE END OF THE RELE V ANT PR EVIOUS YEAR UNLESS I T CAN BE INFERRED THAT THERE IS ANY L A PSE ON THE PART OF THE ASSESSEE DUE TO WHICH THE INCOME HAS ESC A PED ASSESSMENT. PROVISO TO SECTION 147 IS QUITE CLEAR AND CATEGORICAL IN THIS RE GARD IN ASMUCH AS IT PROVIDES AS FOLLOWS : - PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB - SECTION (3) OF SECTION 143 OR THIS SE C TION HAS BEEN MADE FOR TH E RELEVANT ASSESSMENT YEAR , NO ACTI ON SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS AN Y INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO M A KE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB - SECTION(1) OF SECTION 142 OR SECTION 148 OR TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR : 5. IN V IEW OF THE ABOVE LEGAL POSITION , I AM OF THE CON SIDERED VIEW THAT REOPENING ITSELF IS BAD IN LAW AND DE SERVES TO BE QUASHED. I , THEREFORE, QUASH THE REASSESSMENT PROCEEDINGS. IN THIS VIEW OF THE MATTER, THERE IS NO NEED TO DEAL WITH THE ISSUE ON MERITS. 6. IN THE RESULT, THE APPEAL IS ALLOWED . PRONOU NCED UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL RULES 1963 TODAY ON 22 ND DAY OF SEPTEMBER, 2016 . SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 22 ND DAY OF SEPTEMBER , 2016 . PBN/* ITA NO . 144 / RPR /201 4 ASSESSMEN T Y EAR: 200 5 - 06 PAGE 4 OF 4 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR