ITO, Coimbatore V. T.R.K.Saraswathy, Coimbatore

ITA 1600/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96240 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 13-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Keywords: Reopening of assessment; Capital asset; Reasonable cause; Tangible material; Reason to believe
• Section: 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , ! ' , # $% & [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ] ./ I.T.A.NOS.1600 /MDS/2015 / ASSESSMENT YEAR : 2007-2008 INCOME TAX OFFICER, NON-CORPORATE WARD 2(2) COIMBATORE VS. SMT. T.R.K. SARASWATHY, NO.67, AVARAMPALAYAM ROAD, K.R. PURAM, COIMBATORE [PAN ALTPS 9452J ] ./ I.T.A.NOS.1601 /MDS/2015 / ASSESSMENT YEAR : 2007-2008 INCOME TAX OFFICER, NON-CORPORATE WARD 2(2) COIMBATORE VS. SMT. K. PRIYA, NO.67, AVARAMPALAYAM ROAD, K.R. PURAM, COIMBATORE [PAN AJXPP 4653Q] ( '( / APPELLANT) ( )*'( /RESPONDENT) / APPELLANT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT /RESPONDENT BY : NONE / DATE OF HEARING : 30-09-2015 / DATE OF PRONOUNCEMENT : 16-10-2015 ITA NOS.1600 & 1601/MDS/2015. :- 2 -: / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)- 1,COIMBATORE, DATED 10.04.2015 FOR THE ABOVE ASSESS MENT YEAR. SINCE THE ISSUES IN THESE TWO APPEALS ARE COMMON IN NATURE, THESE APPEALS ARE CLUBBED, HEARD TOGETHER, AND DISPOSED O F BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THERE WAS A DELAY OF 07 DAYS IN FILING THESE TWO AP PEALS BEFORE THE TRIBUNAL. THE DEPARTMENT HAS FILED AFFIDAVITS PRAYING FOR CONDONATION OF DELAY. AFTER GOING THROUGH THE REA SON GIVEN IN CONDONATION PETITIONS, WE ARE SATISFIED THAT THERE IS A REASONABLE CAUSE FOR THIS SHORT DELAY OF 07 DAYS IN FILING THESE TWO APPEALS AND THE SAME ARE CONDONED AND THE APPEALS ARE ADMITTED FOR ADJUD ICATION. 3. FIRST WE TAKE UP ITA NO.1600/MDS/2015 FOR ADJUDICAT ION. NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, WE P ROCEED TO DECIDE THE CASE ON MERITS AFTER HEARING THE LD. DEPARTMENT AL REPRESENTATIVE. 4. THE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS REGA RDING TREATING THE SALE OF SHARES AS LONG TERM CAPITAL G AINS INSTEAD OF SHORT TERM CAPITAL GAINS. ITA NOS.1600 & 1601/MDS/2015. :- 3 -: 5. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D HER RETURN OF INCOME HAD OFFERED LONG TERM CAPITAL GAINS OF B2,27 ,52,531/- EARNED BY HER FROM THE SALE OF SHARES OF M/S. GANESAR GINN ING COMPANY (PVT) LTD. THE ASSESSEE, HER HUSBAND SHRI T.S.R.KHANNAIYA N AND THEIR DAUGHTER SMT K. PRIYA, ARE THE DIRECTORS OF THE ABO VE COMPANY. THEY ENTERED INTO A MEMORANDUM OF UNDERSTANDING DATED 28 -11-2006 WITH M/S. DLF RETAIL DEVELOPERS LTD., AS PER WHICH THE E NTIRE SHARE CAPITAL OF THE COMPANY M/S. GANESAR GINNING COMPANY PVT. LT D WAS TRANSFERRED TO M/S. DLF RETAIL DEVELOPERS LTD. ON T HIS TRANSACTION, THE ASSESSEE HAS OFFERED HER SHARE OF LONG TERM CAPITAL GAINS IN THE RETURN OF INCOME FILED. M/S. GANESAR GINNING MILLS PVT. LTD., WAS HAVING ONLY THE LAND OF 2 ACRES AND 23 CENTS AND A BUILDIN G ON IT, IN COIMBATORE, AS ITS ASSETS. THE ENTIRE SHARE OF THE ABOVE COMPANY WAS ACQUIRED, THROUGH RESOLUTION OF TRANSFER OF SHARES, BY THE ASSESSEE, HER FATHER AND MOTHER DURING SEPTEMBER 2005. THE COMPAN Y WAS SOLD DURING NOVEMBER 2006 AS THE ENTIRE SHARE CAPITAL OF THE COMPANY WAS SOLD BY THE ASSESSEE AND HER FAMILY. AS PER THE BA LANCE SHEET FILED BY THE GANESAR GINNING COMPANY PRIVATE LIMITED FOR THE YEAR ENDING 313.2006, THE AUTHORIZED SHARE CAPITAL WAS B1,50,OO O/- CONSISTING OF 1,500 SHARES ( EACH HAVING A FACE VALUE OF RS.100/- ). THE TOTAL OF THE BALANCE SHEET IS ONLY B20,29,147/-, WHICH CONSISTS OF ACCUMULATED LOSSES OF B30,14,192/ -. AS PER THE PROFIT AND LOSS ACCOUNT FILED BY THE ITA NOS.1600 & 1601/MDS/2015. :- 4 -: ABOVE COMPANY FOR THE SAID PERIOD, THERE WAS A NET LOSS OF B3,19,905/-. FURTHER, NO INCOME WAS REFLECTED IN TH IS ACCOUNT, WHICH SHOWED THAT NO BUSINESS WAS CONDUCTED FOR 31.3.2005 AND 31.3.2006. IN SUCH A SITUATION, NO PRUDENT BUSINESS MAN WOULD ACQUIRE 1500 SHARES OF A COMPANY, WHICH WAS INCURRING CONTINUOUS LOSSES, WITH A FACE VALUE OF B1,50,OOO/- FOR B5,31,97,500/-. HENCE IT WAS APPARENT THAT WHEN THE ASSESSEE AND HER PARENTS ACQUIRED THE SHARES OF THE GANESAR GINNING COMPANY PRIVATE LIMITED, THEIR ONLY OBJECTIVE / INTEREST WAS IN THE PRIME LAND OWNED BY THE COMPANY AND NOT IN THE BUSINESS OF THE COMPANY. HENCE THE AMOUNT OF B.5,31 , 97,500/- THAT THEY PAID WAS FOR THE LAND AND NOT FOR THE BUSINESS OF THE COMPANY. FURTHER THE MOU ENTERED INTO BETWEEN THE DIRECTORS OF THE GANESAR GINNING COMPANY PRIVATE LIMITED ( IE ASSESSEE AND H ER PARENTS) AND M/S. DLF RETAIL DEVELOPERS LIMITED TALKED MAINLY AB OUT THE TRANSFER OR THE SAID LAND ( 2.23 ACRES AT GANAPATHY EAST VILLAG E, COIMBATORE) I.E , ABOUT ITS MODE OF ACQUISITION BY THE COMPANY, CEILI NG LIMITS UNDER THE ULCR ACT, APPROVAL OBTAINED BY THE DIRECTORS ON 5.7.2006 FROM COIMBATORE LOCAL PLANNING AUTHORITY STATED THAT IT WAS INDUSTRIAL LAND AND COULD BE USED FOR GENERAL COMMERCIAL PURPOSES. ETC. HENCE, A PERUSAL OF THE ABOVE EVENTS REVEALED THAT THE SAID LAND WAS ACQUIRED BY ASSESSEE AND HER HUSBAND AND DAUGHTER ON 23.9.20 05 AND SUBSEQUENTLY SOLD ON 28.11.2006. IT WAS APPARENT T HAT SINCE THE ITA NOS.1600 & 1601/MDS/2015. :- 5 -: HOLDING PERIOD OF THE ASSET ( LAND) WAS LESS THAN 3 YEARS, THE RESULTANT CAPITAL GAIN IN THE HANDS OF THE ASSESSEE NEEDED TO BE ASSESSED AS SHORT TERM CAPITAL GAINS. HENCE, IN THIS CASE, THERE WAS TANGIBLE MATERIAL AND THERE WAS REASON TO BELIEVE THAT INCOM E CHARGEABLE HAS ESCAPED ASSESSMENT HENCE NOTICE U/S.148 WAS ISSUED TO THE ASSESSEE. WHILE COMPUTING ASSESSMENT, THE ASSESSING OFFICER T REATED CAPITAL GAIN ON TRANSFER OF SHARES AS SHORT TERM CAPITAL GAINS. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS). 6. THE COMMISSIONER OF INCOME TAX (APPEALS) PLACED RELIANCE ON THE JUDGMENT OF KARNATAKA HIGH COURT IN THE CASE O F BHORUKA ENGINEERING INDUSTRIES LTD VS. DCIT 36 TAXMANN.COM 82 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 7. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN RELYI NG ON THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF BHORUKA ENGINEERING INDUSTRIES LTD. (CITED SUPRA). THE BALANCE SHEET OF THE ACQUIRED COMPANY SHOWED O NLY A LOSS OF B3,19,905/- THE ASSESSEE'S PURPOSE OF PURCHASE OF S HARES OF THE LOSS MAKING COMPANY WAS TO ACQUIRE THE LAND WHICH WAS LATER SOL D TO M/S. DLF RETAIL DEVELOPERS LTD. FOR A HIGH PRICE OF B14,58,40,140/ - WHICH SHOWS THIS IS ITA NOS.1600 & 1601/MDS/2015. :- 6 -: DEFINITELY A COLOURABLE DEVICE. HENCE THE ASSESSING OFFICER'S ACTION OF ASSESSING THE CAPITAL GAIN AS A SHORT TERM CAPITAL GAIN HAS T O BE UPHELD AND THE ORDER OF THE CIT(A) BE QUASHED. MOREOVER, THE MODUS OPERANDI ADOPTED BY THIS ASSESSEE IN TRANSFERRING THE ABOVE MENTIONED SHARES WAS ENTIRELY DIFFERENT FROM THAT O F THE CASE RELIED UPON BY THE COMMISSIONER OF INCOME TAX (APPEALS). IN THIS C ASE, THE ENTIRE SHARE CAPITAL OF GANESAR GINNING COMPANY PVT. LTD. WAS A CQUIRED THROUGH RESOLUTION OF TRANSFER OF SHARES BY THE ASSESSEE AN D HER FAMILY WHEREAS IN THE CASE OF BHORUKA ENGINEERING INDUSTRIES LTD , THE TRANSFER OF SHARES WAS DONE THROUGH A REGISTERED STOCK EXCHANGE AND THE APPLICA BLE SECURITIES TRANSACTION TAX WAS PAID BY THEM. THE OBJECTIVE OF THE TRANSFER AS PER THE MOU IBID, WAS TO CONSTRUCT A SHOPPING MALL AND COMPLEX ON THE LAN D. HENCE, ASSESSING OFFICER'S ACTION OF ASSESSING THE CAPITAL GAIN AS A SHORT TERM CAPITAL GAIN, IN THIS CASE, HAS TO BE UPHELD SINCE THIS CASE IS ENTIRELY DIFFERENT IN NATURE FROM THE ONE CITED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 8. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS EV IDENT THAT THE ASSESSEE HAS SOLD THE SHARES OF M/S. GANESAR GINNIN G COMPANY (PVT) LTD. TO M/S. DLF RETAIL DEVELOPERS LTD. THE AUTHORI ZED REPRESENTATIVE SUBMITTED BEFORE THE COMMISSIONER OF INCOME TAX (A PPEALS) THAT THE ASSESSEE HAS PURCHASED ONLY THE SHARES OF THE COMPA NY EARLIER AND ITA NOS.1600 & 1601/MDS/2015. :- 7 -: NOT THE LANDS OR OTHER ASSETS OF THE COMPANY. THE S AID LAND HAS BEEN HELD BY THE COMPANY M/S. GANESAR GINNING COMPANY (P VT) LTD. FROM THE BEGINNING. THE ASSESSEE HAS OFFERED TO TAX THE GAINS FROM THE SALE OF SHARES AS LONG TERM CAPITAL ASSET AND PAID THE T AX AT APPLICABLE RATES. THE COMPANY BEING A ARTIFICIAL PERSON / DIFF ERENT TAXABLE ENTITY, THE ASSESSEE CANNOT BE TAXED FOR THE ASSETS HELD BY THE COMPANY. IT WAS PLEA OF THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)THAT THE SALE OF SHARES IS NOT DONE THROUG H ANY SUB REGISTRARS OFFICE OR REGISTRATION AUTHORITIES. AS S EEN FROM THE FACTS OF THIS CASE, M/S. BSFL, ONE OF THE GROUP COMPANIES OF M/S. BHORUKA ENGINEERING INDUSTRIES LTD, PURCHASED 15 ACRES OF L AND FROM M/S BSL. THE ASSESSEE COMPANY M/S. B S L AND OTHER PROMOTER SHAREHOLDERS HELD 98.73 PER CENT SHARES IN M/S. B S F L. ASSESSE E ALONG WITH OTHER PROMOTERS SOLD THEIR SHAREHOLDINGS IN BSFL TO DLF-C DL THROUGH MAGADH STOCK EXCHANGE AND CLAIMED EXEMPTION FROM LT CG ARISING FROM SALE OF SHARES. BEFORE SALE OF SHARES, BSFL SY STEMATICALLY REDUCED ALL ITS ASSETS EXCEPT LAND. THE REVENUE CONTENDED T HAT TRANSACTION OF SALE OF SHARES WAS A COLOURABLE DEVICE AND VIRTUALL Y IMMOVABLE PROPERTY HAD BEEN TRANSFERRED. THE HIGH COURT HELD THAT 'WHERE ARRANGEMENT OF ASSESSEE TO AVOID PAYMENT OF TAX DID NOT CONTRAVENE ANY STATUTORY PROVISION AND WAS ACHIEVED WITHIN FOUR CORNER OF LAW, IT CANNOT BE FOUND FAULT WITH'. THE HIGH COURT ITA NOS.1600 & 1601/MDS/2015. :- 8 -: ALSO HELD THAT' WHETHER MERELY BECAUSE IF REGISTERED SALE DEED HAD BEEN EXCECUTED BY BSFL SELLING LAND IN FAVOUR O F DLF-CDL, CAPITAL GAIN TAX SHOULD BE PAID ON SALE CONSIDERATI ON, WAS OF NO REASON TO HELD THAT WHEN A SHAREHOLDER OF BSFL TRAN SFERRED THEIR SHARES FOR A CONSIDERATION AFTER COMPLYING WI TH LEGAL REQUIREMENT, HE WAS NOT ENTITLED TO BENEFIT OF TAX EXEMPTION'. THE HIGH COURT HELD THAT IT WAS A VALID LEGAL TRAN SACTION IN LAW AND MERELY BECAUSE THEY WERE ABLE TO AVOID PAYMENT OF T AX, IT CANNOT BE SAID TO BE A COLOURABLE DEVICE OR SHAM TRANSACTION OR A UNREAL TRANSACTION. IN THE CASE OF THE APPELLANT THE TRANSACTION IS REAL, ALL LEGAL FORMALITIES HAVE BEE N COMPLIED WITH AND WHAT IS TRANSFERRED IS THE SHARES AND NOT IMMOVABLE PROPERTY. THE FINDINGS OF THE ASSESSING AUTHORITY THAT IT IS A T RANSACTION OF IMMOVABLE PROPERTY IS CONTRARY TO LAW AND CONTRARY TO THE MATERIAL ON RECORD. THE KARNATAKA HIGH COURT HELD THAT IF THE V EIL OF THE COMPANY IS LIFTED, WHAT APPEARED TO THEM IS TRANSACTION OF IMMOVABLE PROPERTY. SUCH A FINDING IS IMPERMISSIBLE IN LAW. IN THE CAS E OF M/S. BHORUKA ENGINEERING INDUSTRIES LTD (CITED SUPRA), THE ASSES SEE TRADED THE SHARES IN MAGADH STOCK EXCHANGE AND PAID THE TRANSA CTION FEE AND CLAIMED THE LONG TERM CAPITAL GAINS AS EXEMPT. IN T HE CASE OF THE ASSESSEE, SHE PAID THE LONG TERM CAPITAL GAIN ON TH E SALE OF SHARES AS PER THE REQUIREMENT OF LAW. IN VIEW OF THE ABOVE, THE ISSUE IN APPEAL ITA NOS.1600 & 1601/MDS/2015. :- 9 -: IS SQUARELY COVERED BY THE ABOVE JUDGMENT. HENCE, THE APPEAL OF THE REVENUE IS DISMISSED. 9. ITA NO.1601/MDS/2015, ASSESSMENT YEAR 2007-08; K. PRIYA . THE FIRST GROUND RAISED BY THE REVENUE IS WITH REGA RD TO REOPENING OF ASSESSMENT. 10. THE FACTS OF THE ISSUE ARE THAT IN THE RETURN OF I NCOME FILED, THE ASSESSEE HAD OFFERED LONG TERM CAPITAL GAINS OF B 2 ,23,91,380/- EARNED BY HER FROM THE SALE OF SHARES OF M/S. GANES AR GINNING COMPANY (PVT) LTD. THE ASSESSEE AND HER PAR ENTS SHRI T.S.R.KHANNAIYAN AND SMT. T.R.K.SARASWATHY, ARE TH E DIRECTORS OF M/S. GANESAR GINNING COMPANY (PVT) LTD. THEY ENTERE D INTO A MEMORANDUM OF UNDERSTANDING DATED 28-11-2006 WITH M /S. DLF RETAIL DEVELOPERS LTD., AS PER WHICH THE ENTIRE SHA RE CAPITAL OF THE COMPANY M/S. GANESAR GINNING COMPANY PVT LTD, WAS T RANSFERRED TO M/S. DLF RETAIL DEVELOPERS LTD. ON THIS TRANSACTION , THE ASSESSEE HAS OFFERED HER SHARE OF LONG TERM CAPITAL GAINS IN THE RETURN OF INCOME FILED. M/S. GANESAR GINNING MILLS PVT. LTD., WAS HA VING ONLY THE LAND OF 2 ACRES AND 23 CENTS AND A BUILDING ON IT, IN CO IMBATORE, AS ITS ASSETS. THE ENTIRE SHARE OF THE ABOVE COMPANY WAS A CQUIRED, THROUGH RESOLUTION OF TRANSFER OF SHARES, BY THE ASSESSEE, HER FATHER AND ITA NOS.1600 & 1601/MDS/2015. :- 10 -: MOTHER DURING SEPTEMBER 2005. THE COMPANY WAS SOLD DURING NOVEMBER 2006 AS THE ENTIRE SHARE CAPITAL OF THE CO MPANY WAS SOLD BY THE ASSESSEE AND HER FAMILY. AS PER THE BALANCE SHEET FILED BY THE GANESAR GINNING COMPANY PRIVATE LIMITED FOR THE YEA R ENDING 31.3.2006, THE AUTHORIZED SHARE CAPITAL WAS B1,50,0 00/- CONSISTING OF 1,500 SHARES ( EACH HAVING A FACE VALUE OF RS.100/- ). THE TOTAL OF THE BALANCE SHEET IS ONLY B20,29,147/-, WHICH CONSISTS OF ACCUMULATED LOSSES OF B20,14,192/-. AS PER THE PROFIT AND LOSS ACCOUNT FILED BY THE COMPANY FOR THE SAID PERIOD, THERE WAS A NET LOSS O F B3,19,905/-. FURTHER, NO INCOME WAS REFLECTED IN THIS ACCOUNT, W HICH SHOWED THAT NO BUSINESS WAS CONDUCTED FOR 31.3.2005 AND 31.3.20 06. IN SUCH A SITUATION, NO PRUDENT BUSINESS MAN WOULD ACQUIRE 15 00 SHARES OF A COMPANY, WHICH WAS INCURRING CONTINUOUS LOSSES, WIT H A FACE VALUE OF B1,50,000/- FOR B5,31,97,500/-. HENCE IT WAS APPARE NT THAT WHEN THE ASSESSOE AND HER PARENTS ACQUIRED THE SHARES OF THE GANESAR GINNING COMPANY PRIVATE LIMITED, THEIR ONLY OBJECTIVE / INT EREST WAS IN THE PRIME LAND OWNED BY THE COMPANY AND NOT IN THE BUSI NESS OF THE COMPANY. HENCE THE AMOUNT OF B5,31 ,97,500/- THAT T HEY PAID WAS FOR THE LAND AND NOT FOR THE BUSINESS OF THE COMPAN Y. FURTHER THE MOU ENTERED INTO BETWEEN THE DIRECTORS OF THE GANES AR GINNING COMPANY PRIVATE LIMITED ( IE ASSESSEE AND HER PAREN TS) AND M/S. DLF RETAIL DEVELOPERS LIMITED TALKED MAINLY ABOUT THE T RANSFER OF THE SAID ITA NOS.1600 & 1601/MDS/2015. :- 11 -: LAND ( 2.23 ACRES AT GANAPATHY EAST VILLAGE, COIMBA TORE) I.E. ABOUT ITS MODE OF ACQUISITION BY THE COMPANY, CEILING LIMITS UNDER THE ULCR ACT, APPROVAL OBTAINED BY THE DIRECTORS ON 5.7.2006 FROM COIMBATORE LOCAL PLANNING AUTHORITY STATED THAT IT WAS INDUSTRIAL LAND AND COULD BE USED FOR GENERAL COMMERCIAL PURPOSES, ETC. HENCE , A PERUSAL OF THE ABOVE EVENTS REVEALED THAT THE SAID LAND WAS AC QUIRED BY ASSESSEE AND HER PARENTS ON 23.9.2005 AND SUBSEQUEN TLY SOLD ON 28.11.2006. IT WAS APPARENT THAT SINCE THE HOLDING PERIOD OF THE ASSET ( LAND) WAS LESS THAN 3 YEARS, THE RESULTANT CAPITAL GAIN IN THE HANDS OF THE ASSESSEE NEEDED TO BE ASSESSED AS SHOR T TERM CAPITAL GAINS. HENCE, IN THIS CASE, THERE WAS TANGIBLE MATE RIAL AND THERE WAS REASON TO BELIEVE THAT INCOME CHARGEABLE HAS ESCAPE D ASSESSMENT HENCE NOTICE U/S.148 WAS ISSUED TO THE ASSESSEE. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS). 11. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) GAVE A FINDING IN FAVOUR OF THE ASSESSEE HOLDING THAT REOP ENING IS BAD IN LAW. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL ON RECORD. IN THIS CASE THE ORIGINAL ASSESSMENT FOR T HE ASSESSMENT YEAR ITA NOS.1600 & 1601/MDS/2015. :- 12 -: 2007-2008 WAS COMPLETED U/S.143(3) OF THE ACT AFTER EXAMINING THE BOOKS OF ACCOUNTS. IT WAS NOTED THAT THE CALCULATIO N OF CAPITAL GAINS ON SALE OF EQUITY SHARES OF GANESAR GINNING MILLS LTD HAS BEEN VERIFIED BY THE THEN ASSESSING OFFICER BASED ON THE RELEVANT FA CTS AND MATERIALS SUBMITTED BY THE ASSESSEE AND THE ASSESSING OFFICER HAS ACCEPTED THE STAND OF THE ASSESSEE IN RESPECT OF CALCULATION OF CAPITAL GAINS ON SALE OF SHARES. IN SUCH AN EVENTUALITY IN AN ASSESSMENT U/S.143(3) WHERE THERE HAS BEEN NO FAILURE ON THE PART OF THE ASSESS EE IN DISCLOSING TRULY AND MATERIALLY ALL FACTS RELATING TO THE CASE, THE ASSESSMENT CANNOT BE REOPENED AFTER 4 YEARS TIME LIMIT WHICH WAS COMPLET ED ON 31.03.2012 AS PER THE PROVISO TO SECTION 147 OF THE ACT. FURT HER, THERE WAS NO ALLEGATION BY THE ASSESSING OFFICER THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE MATERIALS, FACTS TR ULY AND CORRECTLY FOR THE PERIOD OF ASSESSMENT. BEING SO, SINCE THE ASSE SSMENT WAS RE- OPENED AFTER FOUR YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143( 3), THIS ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF SUPREME COURT I N THE CASE OF CIT VS. KELVINATOR OF INDIA LTD 320 ITR 561 . THE ASSESSING OFFICER PRECLUDED FROM REOPENING THE ASSESSMENT. ACCORDING LY, REOPENING OF ASSESSMENT IS INVALID, THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS) IS CONFIRMED. ITA NOS.1600 & 1601/MDS/2015. :- 13 -: 13. COMING TO THE SECOND ISSUE IN THIS APPEAL, WHICH IS IDENTICAL TO THE ONE CONSIDERED IN ITA NO.1600/MDS/2015. APPLYI NG THE ABOVE RATIO, THIS APPEAL OF THE REVENUE IS ALSO DISMISSED . 14. IN THE RESULT, THE APPEALS OF THE REVENUE IN ITA NO S.1600 & 1601/MDS/2015 ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 16 TH DAY OF OCTOBER, 2015, AT CHENNAI. SD/- SD/- ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! ' ) (CHANDRA POOJARI) # / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 16.10.2015 KV %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 3. ' +',! / CIT(A) 5. )-.' / / DR 2. / RESPONDENT 4. ' + / CIT 6. .0'1 / GF