The ITO, Ward-5(2), Ahmedabad V. Pioneer Irrigation Pvt. Ltd., Ahmedabad

ITA 1454/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1487 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-05-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 02-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A REVAR
• Keywords: Gross profit estimation; Depreciation; Tangible material; Assessment record; Reason to believe; Reassessment proceedings
• Section: 44AD; 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , ! BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 $% & / ASSESSMENT YEAR: 2002-03 INCOME TAX OFFICER, WARD 5 (2), AHMEDABAD VS M/S. PIONEER IRRIGATION PVT LTD., 1, KANCHI CO. OP. HOUSING SOCIETY, NR. GURUDWARA, SG ROAD, THALTEJ, AHMEDABAD-54 PAN : AABCP 1492 K / (APPELLANT) / (RESPONDENT) & CROSS-OBJECTOR REVENUE BY : SHRI R.A. REVAR, SR. DR. ASSESSEE BY : SHRI SUNIL TALATI, AR ( /DATE OF HEARING : 30/05/2016 &% ( /DATE OF PRONOUNCEMENT: 31/05/2016 /O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AND THE CRO SS-OBJECTION FILED THEREOF BY THE ASSESSEE, BOTH AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XI, AHMEDABAD DATED 25/04/20 12 FOR ASSESSMENT YEAR 2002-03. ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 2 - 2. THE BRIEF FACTS OF THE CASE, AS CULLED OUT FROM THE ASSESSMENT RECORDS ARE AS UNDER:- 2.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING AND SUPPLY OF DRIP AND SPRINKLER IRRI GATION SYSTEM EQUIPMENT AND CONTRACT FOR LAYING PIPELINE. ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2001-02 DECLARING TOTAL LOSS OF RS.2,91,44,958/-. THE RETURN OF INCOME WAS INITIALLY PROCESSED U/S.143(1) OF THE INCOME TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT). LATER ON, THE CASE WAS R EOPENED U/S.147 OF THE ACT BY ISSUING NOTICE U/S.148 OF THE ACT ON 08/09/2005 AND THE REASON FOR REOPENING WAS ON ACCOUNT OF DIFFERENCE IN AMOUNT OF SUB-CONTRACT INCOME SHOWN BY THE ASSESSEE IN ITS P&L ACCOUNT AND THAT S HOWN IN THE TDS CERTIFICATES, THE DIFFERENCE BEING TO THE EXTENT OF RS.3,38,508/-. THEREAFTER, ASSESSMENT WAS FRAMED U/S.143(3) R.W.S. 147 AND 144 A VIDE ORDER DATED 18/12/2006 AND THE TOTAL INCOME WAS DETERMINED AT R S.33,97,402/- INTER ALIA BY MAKING ADDITION ON ACCOUNT OF CONTRACT INCOME, LABOUR SITE EXPENSES, SITE VEHICLE EXPENSES, MACHINERY RENT EXPENSES AND UNEXP LAINED CASH CREDITS, THE AGGREGATE OF SUCH ADDITIONS BEING RS.3,25,42,360/-. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, ASSESSEE CARRIED THE MATT ER BEFORE THE LD.CIT(A), WHO VIDE ORDER DATED 30/05/2007 (IN APPEAL NO.CIT(A )-XI/258/2006-07) DELETED THE ADDITIONS MADE BY THE AO AND THEREBY AL LOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL (ITAT A BENCH AHMEDABAD) VIDE ORDER DATED 31 ST JULY-2009 IN ITA NO.3359/AHD/2007 FOR AY 2002-03 SET ASIDE THE ORDERS OF THE DEPARTMENTAL AUTHORITIE S AND RESTORED THE ASSESSMENT TO THE FILE OF AO WITH A DIRECTION TO C OMPLETE THE ASSESSMENT ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 3 - D E NOVO IN ACCORDANCE WITH LAW. PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL, AO PASSED THE ORDER U/S.144 R.W.S. 254 OF THE ACT V IDE ORDER DATED 14/02/2010AND DETERMINED TOTAL INCOME OF RS.65,26,3 37/-. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO VIDE ORDER DATED 25/04/2012 (IN APPEAL NO.CIT(A)-XI/407/ WD-5(2)/10-11) GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE AND ALSO HELD THAT THE ASSESSMENT FRAMED IN RESPONSE TO NOTICE U/S.148 OF THE ACT DAT ED 08/09/2005 TO BE VOID AB INITIO AND, THEREFORE, QUASHED THE ASSESSMENT ORDER. THE FINDINGS OF LD.CIT(A) WHILE DECIDING THE ISSUE ARE AS UNDER:- 3.3. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. IT IS SEEN THAT IN ITA NO.3359/AHD/2007 DATED 21/5/2010, THE HONBL E ITAT HAD ALLOWED FIRST GROUND OF APPEAL OF THE REVENUE WHERE IN THE ISSUE OF REOPENING OF THE ASSESSMENT WAS UPHELD. IT IS FURT HER NOTICED THAT THE ITATS ORDER DATED 21.5.2010 WAS FURTHER CONTESTED IN MISCELLANEOUS APPLICATION AND THE HONBLE ITAT DECIDED MISCELLANE OUS APPLICATION IN M.A.NO.311/AHD/2009 DATED 9/6/2010. IN PARA 4 O F THIS ORDER THE HONBLE ITAT HAS UPHELD WE MAY ALSO NOT HEAR THAT ONCE THE ENTIRE ASSESSMENT IS RESTORED TO THE FILE OF THE A.O FOR C OMPLETION OF ASSESSMENT DE-NOVO IN ACCORDANCE WITH LAW, THE ASSE SSEE IS AT LIBERTY TO FILE ANY DETAILS AND EVIDENCES BEFORE THE A.O. F OR COMPLETION OF ASSESSMENT. THE ASSESSEE IS ALSO HAD LIBERTY TO RA ISE ANY OBJECTION WITH REGARD TO INITIATION OF PROCEEDINGS U/S.147 OF THE I.T.ACT. IN VIEW OF ABOVE DIRECTIONS, I AM OF THE CONSIDERED VI EW THAT THE ISSUE OF NOTICE U/S.148 NEEDS TO BE ADJUDICATED. 3.4. IT IS A MATTER OF RECORD THAT THE ASSESSMENT W AS RE-OPENED U/S.148 WITH THE REASONS THAT THE APPELLANT HAS SUP PRESSED JOB WORK RECEIPT OF RS.3,38,508/-. HOWEVER, THIS ADDITION W AS DELETED BY MY PREDECESSOR IN APPEAL NO.CIT(A)-XI/258/2006-07 DATE D 30/5/2007 AS THESE RECEIPTS WERE DULY DECLARED BY THE APPELLANT. AGAIN THE A.O. IN REMAND REPORT DATED 28/3/2012 HAD OPINED THAT THE A LLEGED SUPPRESSED RECEIPTS WERE DULY DECLARED IN THE INCOME TAX RETUR N. IN VIEW OF THESE FINDINGS, I AM OF THE CONSIDERED VIEW THAT SATISFAC TION RECORDED BEFORE ISSUING THE NOTICE U/S.148 IS NOT LINKED WITH THE I NITIATION OF PROCEEDINGS. IT IS A SETTLED PROPOSITION OF LAW TH AT IN REOPENING THE ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 4 - ASSESSMENT, THERE MUST BE TANGIBLE MATERIAL TO REAC H TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT . THE REASONS RECORDED BY THE A.O., MUST HAVE A LINK WITH FORMATI ON OF BELIEF. AS THE ABOVE FACTS REVEALS THAT THERE IS NO TANGIBLE MATER IAL ON RECORD TO INDICATE THE ESCAPEMENT OF INCOME AND ACCORDINGLY T HE LINK BETWEEN SATISFACTION AND INITIATION OF PROCEEDINGS IS MISSI NG. ACCORDINGLY, IN MY CONSIDERED VIEW THE PROCEEDINGS U/S.148 HAS NOT BEEN VALIDLY INITIATED. THE APPELLANT HAS RIGHTLY PLACED RELIAN CE ON THE CASES OF RAYMOND WOOLLEN MILLS LTD. VS. ITO 236 ITR 34 (S.C. ) AND CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 (S.C.) 3.5. IT IS ALSO A MATTER OF FACT THAT THE A.O. HAS NOT MADE ADDITION AGAINST THE SUPPRESSED INCOME OF RS.3,38,508/- IN T HE IMPUGNED ASSESSMENT ORDER AS MENTIONED IN THE SATISFACTION F OR REOPENING THE ASSESSMENT. IT IS A WELL ESTABLISHED PROPOSITION O F LAW THAT THE ASSESSING OFFICER CAN MAKE OTHER ADDITIONS ALONG WI TH THE ADDITION AS MENTIONED IN THE SATISFACTION FOR RE-OPENING THE AS SESSMENT, HOWEVER, THE REVERSE PROCESS CANNOT BE FOLLOWED I.E. IF THE ADDITION AS MENTIONED IN THE SATISFACTION IS NOT MADE IN THE ASSESSMENT O RDER, OTHER ADDITIONS CANNOT BE MADE. RELIANCE IN THIS MATTER IS PLACED ON THE CASE OF CIT VS. SHRI RAM SINGH 306 ITR 343 (RAJ.) AND CIT VS. J ET AIRWAYS (I) LTD., 331 ITR 236(BOM). IN THE IMPUGNED ORDER THE A.O. H AD NOT MADE ADDITION OF RS.3,38,508/- AGAINST SUPPRESSED RECEIP TS AND IN VIEW OF ABOVE DISCUSSIONS, THE ADDITION OF RS.65,26,337/- M ADE TOWARDS LOW G.P. IS NOT TENABLE. 4. SINCE THE APPEAL HAS BEEN ALLOWED TECHNICAL GROU NDS AND THE ASSESSMENT ORDER HAS BEEN QUASHED BY ME IN THE PREC EDING PARAS, ACCORDINGLY, THE OTHER GROUNDS OF APPEAL BECOMES IN FRUCTUOUS. HOWEVER, IT WILL BE WORTHWHILE TO DISCUSS THE MERIT S OF THE CASE. THE ADDITIONS MADE BY THE A.O. IN THE ASSESSMENT ORDER ARE NOT SUSTAINABLE FOR THE FOLLOWING REASONS:- A. IN THE IMPUGNED ORDER THE A.O. HAD ASSESSED THE INC OME @8%. THE A.O. HAD DERIVES SUPPORT IN THIS REGARD F ROM THE PROVISIONS OF SEC.44AD OF THE I.T.ACT. IT IS A MATTER OF RECORD THAT THE APPELLANT IS HAVING A TURNOVER OF RS.8,15,79,208/- WHICH IS MUCH ABOVE THE PRESCRIBED LIMIT OF SALES OF SEC.44AD OF RS.40 LAKHS. SECONDLY, THE ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 5 - APPELLANT IS MAINTAINING BOOKS OF ACCOUNTS REGULARL Y. IT IS HELD BY THE HONBLE DELHI TRIBUNAL IN DCIT VS. ALLI ED CONSTRUCTION (2007) 291 ITR 16 THAT WHERE THE RECEI PT FROM THE BUSINESS OF CIVIL CONSTRUCTION EXCEEDED RS .40 LAKHS, PROVISIONS OF SEC. 44AD WERE NOT APPLICABLE. IN THE INSTANT CASE PROVISIONS OF SEC.44AD WILL NOT BE APP LICABLE AS THE TURNOVER IS DEFINITELY MORE THAN RS.40 LAKHS . B. DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT HAS FILED FOLLOWING DETAILS:- A) DETAILS OF BANK ACCOUNT B) DETAILS OF SHAREHOLDING C) DETAILS OF UNSECURED LOANS AND DEPOSIT D) DETAILS OF ADDITION TO FIXED ASSETS E) DETAILS OF OPENING AND CLOSING STOCK F) DETAILS OF SUNDRY DEBTORS/CREDITORS G) DETAILS OF LOANS ADVANCES/DEPOSITS H) DETAILS OF PROVISIONS I) DETAILS OF MONTHWISE PURCHASE OF RAW MATERIAL J) DETAILS OF MONTHWISE SALES K) DETAILS OF MONTHWISE CONTRACT INCOME L) DETAILS OF INCOME FROM OTHER SOURCES M) DETAILS OF W.I.P. IN RESPECT OF BOTAD SITE AND GADH ADA SITE N) NAME AND ADDRESS (PURCHASE, EXCEEDING RS.1 LAC) O) NAME AND ADDRESS (SALES EXCEEDING RS.1 LAC) P) NAME AND ADDRESS FROM WHOM CONTRACT RECEIPT WAS RECEIVED. Q) DETAILS OF LABOUR SITE EXPENSES R) DETAILS OF SITE VEHICLE EXPENSES S) DETAILS OF MACHINERY RENT T) RECONCILIATION OF CONTRACT INCOME U) COPY OF TDS RETURN V) DETAILS OF UNABSORBED LOSSES/DEPRECIATION W) COPY OF WEALTH TAX RETURN X) APART FROM THIS, THE APPELLANT ON 21/9/2010 HAD SUBMITTED COMPLETE BOOKS OF ACCOUNTS ALONG WITH VOUCHERS, BILLS, CHEQUE BOOKS, SLIP BOOKS, ETC. ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 6 - THE A.O. HAS NOT TAKEN COGNIZANCE OF THESE EVIDENCE S WHILE PASSING THE ASSESSMENT ORDER. IT IS ALSO A MATTER OR RECORD THAT THE A.O. HAD NOT FOUND ANY SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNTS INSPITE OF THE FACT THAT ALL THE RELEVANT DETAILS WERE SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. IT IS AN ESTABLISHED PROPOSITION OF LAW THAT IN THE ABSENCE OF THE SPECIFIC THE BOOKS OF ACCOUNTS CANNOT BE REJECTED. RELIANC E IN THIS REGARD IS PLACED ON THE CASES OF A) PANDIT BROTHERS VS. CIT 26 ITR 159 (PUNJ) B) ASHOKA REFRACTORS PVT.LTD. VS. CIT 279 ITR 457 (CAL .) C) VIDHYA TRADERS VS. CIT 74 ITR 279 (MYS) D) ACIT VS. L.M.P.TRACTORS PVT.LTD. 148 TAXMAN, 52 (AHD.). C) A.O. HAS NOT REJECTED BOOKS OF ACCOUNTS AT ALL. IT IS AN ESTABLISHED PROPOSITION OF LAW THAT PROVISIONS OF S EC.145 COULD NOT BE INVOKED WITHOUT REJECTING THE BOOKS OF ACCOUNTS. RELIANCE IN THIS REGARD IS PLACED ON ITO VS. DR.KAILASH SHARMA & SONS (2005) 84 TTJ 955. D) THE A.O. HAS ALSO NOT RECORDED A FINDING THAT TH E SYSTEM OF ACCOUNTING FOLLOWED BY THE APPELLANT IS SUCH THA T CORRECT PROFITS CANNOT BE DEDUCED. WITHOUT RECORDI NG SUCH FINDING IN MY CONSIDERED VIEW PROVISIONS OF SE C.145 CANNOT BE INVOKED. RELIANCE IN THIS REGARD IS PLAC ED ON CIT VS. MARGADARSE CHIT FUNDS PVT.LTD. (1985) 155 I TR 442(AP). E) IT IS A MATTER OF RECORD THAT THE ASSESSMENT WAS RE-OPENED U/S.147 OF THE I.T.ACT FOR NON-DISCLOSURE OF CONTRA CT RECEIPT OF RS.3,38,508/-. IN THE IMPUGNED ORDER TH E A.O. HAD NOT MADE THIS ADDITION. THE ONLY ADDITION MADE BY THE A.O. IN THE IMPUGNED ORDER IS RS.65,26,337/- TO WARDS LOW GROSS PROFIT. AS DISCUSSED IN PARA 3.5 ABOVE, NO OTHER ADDITION CAN BE MADE IN THE REOPENED ASSESSMENT ORD ER, AS THE ADDITION MENTIONED IN THE SATISFACTION BEFOR E ISSUING THE NOTICE U/S.148 WAS NOT MADE. THIS WAY ADDITION OF RS.65,26,337/- IS NOT TENABLE. 4.1. IN VIEW OF ABOVE FACTS, I AM INCLINED TO AGREE WITH THE CONTENTIONS OF THE LD.A.R. ACCORDINGLY, THE ADDITIO N OF RS.65,26,337/- ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 7 - MADE BY THE A.O. TOWARDS LOW GROSS PROFIT IS ORDERE D TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 2.2. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), REVEN UE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THE NOTICE ISSUED U/S 148 OF THE I.T. ACT DATED 08.09.2 005 AS ABINITIO VOID, AND IN QUASHING THE ASSESSMENT ORDER COMPLETE D U/S 144 OF THE I.T. ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.65,26,337/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF LOW GROSS PROFIT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. COMMISSIONER OF INCOME-TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS, THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (A) MAY BE SET-ASIDE AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 3. ASSESSEE IN ITS CROSS OBJECTION NO.143/AHD/2012 FOR AY 2002-03 (ARISING OUT OF ITA NO.1454/AHD/2012 AY 2002-03-R EVENUES APPEEAL) HAS RAISED FOLLOWING GROUNDS:- 1. THE LEARNED CIT(APPEALS) HAS ERRED IN GRANTING THE RELIEF AND DELETING THE ADDITION ONLY TO THE EXTENT TO INCOME DETERMINED BY THE ASSESSING OFFICER, I.E. RS.65,26,337/- AS AGAIN ST THE RELIEF CLAIMED IN THE GROUNDS OF APPEAL OF SHOWING THE ACT UAL BUSINESS LOS SUFFERED OF RS.2,91,44,958/-. THUS THE LEARNED CIT(APPEALS) HAS ERRED IN GIVING RELIEF ONLY TO EXTENT OF RS.65, 26,337/- AGAINST THE ADDITION MADE OF RS.3,56,71,295/-. IT IS SUBMI TTED THAT THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN DELETED BY THE LEARNED CIT(APPEALS). IT IS SU BMITTED THAT ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 8 - THE LOSS AS PER RETURN OF INCOME OF RS.2,91,44,958/ - BE ALLOWED NOW. 2. THE CIT(APPEALS) HAS ERRED IN DISPOSING THE GROU ND OF CHARGING INTEREST U/S.234A, 234B AND 234D AND ALSO OF NON-GR ANTING OF INTEREST U/S.244A HOLDING AND DECIDING THAT IT IS P RE-MATURED. IT IS SUBMITTED THAT THE ASSESSEE IS NOT AT ALL LIABLE TO PAY ANY INTEREST AND THEREFORE, IT IS SUBMITTED THAT THE SA ME BE HELD NOW. 4. WE FIRST TAKE UP REVENUES APPEAL IN ITA NO.1454 /AHD/2012 FOR AY 2002-03. 4.1. FIRST GROUND IS WITH RESPECT TO QUASHING OF AS SESSMENT ORDER. 4.2. BEFORE US, LD.DR SUPPORTED THE ORDER OF AO AN D SUBMITTED THAT DESPITE THE DIRECTIONS OF THE HONBLE ITAT, NO DETAILS WERE FURNISHED BY THE ASSESSEE IN THE SECOND ROUND OF APPEAL BEFORE THE AO AND IN SUCH A SITUATION, AO WAS JUSTIFIED IN MAKING THE ADDITIONS. AS FAR AS THE A DDITIONS MADE ON ISSUES OTHER THAN THOSE ON THE BASIS OF WHICH THE ASSESSME NT WAS REOPENED IS CONCERNED, HE SUBMITTED THAT IN VIEW OF EXPLANATION -3 TO SECTION 147 OF THE ACT WHICH HAS BEEN INSERTED BY FINANCE NO.2, ACT 20 09, WHICH IS RETROSPECTIVE IN EFFECT FROM 01/04/1989, THE AO WAS FULLY JUSTIFIED IN MAKING THE ADDITION ON THE OTHER ISSUES WHICH WERE NOT INC LUDED IN THE REASONS RECORDED U/S.148(2) OF THE ACT. HE THUS SUPPORTED THE ORDER OF AO. 4.3. THE LD.AR, ON THE OTHER HAND, REITERATED THE S UBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT THE PRE LIMINARY CONDITION FOR REOPENING THE ASSESSMENT IS THAT THERE MUST BE TANG IBLE MATERIAL TO REACH THE CONCLUSION THAT THERE HAS BEEN ESCAPEMENT OF INCOME FROM ASSESSMENT AND THE REASONS RECORDED BY THE AO MUST HAVE A LIVE LIN K WITH THE FORMATION OF BELIEF. HE SUBMITTED THAT IN THE PRESENT CASE, THE AO HAD REOPENED THE ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 9 - ASSESSMENT FOR THE REASON THAT ASSESSEE HAD SUPPRES SED JOB WORK RECEIPTS OF RS.3,38,508/-. THE AFORESAID ADDITION WAS DELETED BY THE LD.CIT(A) AND THUS REMAINED NO ADDITION TO THAT COUNT. HE THEREFORE S UBMITTED THAT IN THE ABSENCE OF ANY ADDITION ON THE MAIN ISSUE ON WHICH THE ASSESSMENT HAS REOPENED, NO OTHER ADDITIONS COULD BE MADE IN THE R EASSESSMENT PROCEEDINGS. HE THUS SUPPORTED THE ORDER OF LD.CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO REOPENING OF THE AS SESSMENT AND THE ADDITIONS MADE IN REASSESSMENT. ON PERUSING REASONS FOR REOP ENING OF THE ASSESSMENT AS NOTED IN THE ASSESSMENT ORDER, IT IS SEEN THAT R EASSESSMENT WAS INITIATED ON ACCOUNT OF UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS.3,38,508/-, BEING THE DIFFERENCE BETWEEN THE SUB-CONTRACT INCOME SHOW N BY THE ASSESSEE IN ITS P&L ACCOUNT AND THAT REFLECTED IN THE TDS CERTIFICA TES SUBMITTED BY THE ASSESSEE. THE AFORESAID ADDITION WAS MADE BY THE A O WHILE FRAMING ASSESSMENT U/S.148 OF THE ACT BUT THE SAME WERE DEL ETED BY THE LD.CIT(A) VIDE ORDER DATED 30/05/2007 AS THOSE RECEIPTS WERE DULY DECLARED BY THE ASSESSEE AND FURTHER WE FIND THAT THE LD.CIT(A) HA S ALSO NOTED THAT AO IN THE REMAND REPORT DATED 28/03/2012 AND OPINED THAT TH E IMPUGNED SUPPRESSED RECEIPTS WERE DECLARED BY THE ASSESSEE IN THE INCOM E-TAX RETURN. WE FURTHER FIND THAT IN THE ASSESSMENT ORDER FRAMED U/S.144 R. W.S.254 OF THE ACT VIDE ORDER DATED 14/12/2010 IN THE SECOND ROUND OF APPEA L ALSO, NO ADDITION OF SUPPRESSED RECEIPTS HAS BEEN MADE BY THE AO. THUS, THERE IS NO ADDITION OF SUPPRESSED RECEIPTS OF RS.3,38,508/- IN THE REASSES SMENT PROCEEDINGS, MEANING THEREBY THAT NO ADDITION WAS MADE ON THE GR OUND WHICH WAS THE BASIS FOR REACHING THE CONCLUSION OF ESCAPEMENT OF INCOME IN THE REASONS RECORDED FOR ISSUANCE OF NOTICE U/S.148 OF THE ACT. WE FIND THAT THE HONBLE ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 10 - BOMBAY HIGH COURT IN THE CASE OF CIT VS JET AIRWAYS (I) LTD. REPORTED AT (2011) 331 ITR 236 (BOM.) ON THE ISSUE AS TO WHETHE R ADDITION ON OTHER GROUNDS COULD BE MADE WHEN NO ADDITION HAS BEEN MAD E OF THE INCOME, WHICH WAS INITIALLY THE BASIS OF REOPENING HAS DEC IDED THE ISSUE IN FAVOUR OF ASSESSEE. THE HEAD NOTE OF THE DECISION IS REPRODU CED HEREUNDER:- REASSESSMENTSCOPEITEMS UNCONNECTED WITH ESCAPEMENT FOR WHICH NOTICE WAS ISSUEDWHEN EXPLN. 3 TO S. 147 WAS INTRODUCED, PARLIAMENT STEPPED IN TO CORRECT WHAT IT REGARDED AS AN INTERPRETATIONAL ERROR IN THE VIEW WHICH WAS TAKEN BY CERTAIN COURTS THAT THE AO HAS TO RESTR ICT THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ONLY TO THE ISSUES IN RES PECT OF WHICH REASONS WERE RECORDED FOR REOPENING THE ASSESSMENTHOWEVER, EXPLN. 3 DOES NOT AND CANNOT OVERRIDE THE NECESSITY OF FULFILLING THE CONDITIONS SET OUT IN THE SUBSTANTIVE PART OF S. 147AO HAS TO ASSESS OR REASSESS THE INCOME ('SUCH INCOME') WHICH ESCAPED ASSESSMENT AND WHICH WAS THE BASIS OF THE FORMATION OF BELIEF AND IF HE DOES SO, HE CAN ALSO ASS ESS OR REASSESS ANY OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE DURING THE COURSE OF THE PROCEEDINGSHOWEVER, IF AFTER ISSUING A NOTICE UNDER S. 148, HE ACCEPTED THE CONTENTION OF THE ASSESSEE AND HOLDS THAT THE INCOME WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE HA D ESCAPED ASSESSMENT, HAS AS A MATTER OF FACT NOT ESCAPED ASSESSMENT, IT IS NOT OPEN TO HIM TO INDEPENDENTLY ASSESS SOME OTHER INCOMEIF HE INTENDS TO DO SO, A FRESH NOTICE UNDER S. 148 WOULD BE NECESSARY, THE LEGALITY OF WHICH WOULD BE TESTED IN THE EVENT OF A CHALLENGE BY THE ASSESSEE. 5.1. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRAR Y BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A). THUS, THIS GROUND OF REVENUE IS DISMISSED. 5.2. AS A RESULT, REVENUES APPEAL IS DISMISSED. 6. NOW WE TAKE UP THE ASSESSEES CROSS OBJECTION NO .143/AHD/2012 FOR AY 2002-03. 6.1. BEFORE US, LD.AR VIDE LETTER DATED 30/05/2016 SUBMITTED THAT IF THE APPEAL OF REVENUE IS DISMISSED, HE DID NOT WISH TO PRESS THE GROUNDS RAISED IN ITA NO. 1454/AHD/2012 & CO NO.143/AHD/2012 ASSESSEE : PIONEER IRRIGATIONS PVT LTD AY : 2002-03 - 11 - THE CROSS OBJECTION. WE HEREINABOVE, WHILE DECIDIN G THE APPEAL OF REVENUE HAVE DISMISSED THE APPEAL OF REVENUE AND, THEREFORE IN VIEW OF THE SUBMISSIONS OF AR, THE CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED AS NOT PRESSED. 7. IN THE COMBINED RESULT, REVENUES APPEAL AND ASS ESSEES CROSS OBJECTION ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 31/05/2016 SD/- SD/- ( ) () (SHAILENDRA KUMAR YADAV) ( ANIL CHATUR VEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 31/ 05 /2016 -..,.../ T.C. NAIR, SR. PS !'#'$ / COPY OF THE ORDER FORWARDED TO : 1. 01 / THE APPELLANT 2. 2301 / THE RESPONDENT. 3. 45$ 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-XI, AHMEDABAD 5. 78925$ , 5$ % , 4 / DR, ITAT, AHMEDABAD 6. 9;< / GUARD FILE. / BY ORDER, 372 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 30.5.16 (DICTATION-PAD 16- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.5.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.5.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.5.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER .. 10. DATE OF DESPATCH OF THE ORDER