FATEHPURIA TRANSFORMERS AND SWITCHGRARS PVT. LTD., Jaipur V. ACIT, Jaipur

ITA 167/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2026 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 25-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL CIT DHK
• Assessee Lawyers: SATISH AJMERA; SANJEEV MATHU
• Keywords: Depreciation; Earning of tax free income; Difference of opinion; Change of opinion
• Section: 143(3); 147; 148; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 167/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. FATEHPURIA TRANSFORMERS AND SWITCHGEARS PRIVATE LTD., JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACF 3456 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SANJEEV MATHU &, SHRI SATISH AJMERA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI S.L. CHANDEL (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04.07.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07/07/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-I, JAIPUR, DATED 22.12.2015 PERTAINING TO ASSESSMENT Y EAR 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING REVISED GROU NDS OF APPEAL :- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I HAS ERRED IN HOLDING THAT AO HAS RIGHTLY REOPENED THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT 1961, AFTER THE EXPIRY OF FOUR YEARS FROM T HE END OF RELEVANT ASSESSMENT YEAR EVEN THOUGH AT THE TIME OF ASSESSME NT U/S 143(3) ALL THE MATERIAL FACTS HAVE BEEN DISCLOSED TRULY AND FU LLY. 2. THE LD. CIT(A)-1 HAS ERRED IN NOT ANNULLING THE ASSESSMENT AS THE NOTICE U/S 148 WAS ISSUED AFTER THE LIMITATION PERI OD. 3. THE LD. CIT(A)-1, HAS ERRED IN NOT HOLDING THAT ALL THE FACTS WERE IN POSSESSION OF THE AO AT THE TIME OF ORIGINAL ASSESS MENT AND THAT THERE WERE NO NEW FACTS AND HAS ERRED IN NOT HOLDING THAT IT WAS NOT OPENED TO THE LD. ASSESSING OFFICER TO REVIEW HIS OWN DECI SION AS THE LD. AO HAS NOT BROUGHT ANY FRESH MATERIAL THAT HAS BEEN RE CEIVED AFTER COMPLETION OF ASSESSMENT U/S 143(3) . 2 ITA NO. 167/JP/2016. FATEHPURIA TRANSFORMERS AND SWITCHGEARS PVT. LTD., JAIPUR. 4. THE LD. CIT(A)-1, HAS ERRED IN NOT HOLDING THAT THE AO HAD FAILED TO RECORD THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPE D ASSESSMENT ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE TRUL Y AND FULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. 5. THE LD. CIT(A) HAS ERRED IN NOT CONCLUDING THAT THE LD. AO HAS NOT STATED IN THE REASON OF REOPENING WHETHER THE PROFI T FROM SALE OF ENERGY WAS ADDED OR EXPENDITURE INCLUDING DEPRECIAT ION AGAINST EXEMPT INCOME WAS DISALLOWED. 6. THE LD. CIT(A)-1, JAIPUR HAS ERRED IN HOLDING T HAT THERE IS NO CHANGE OF OPINION AS THE LD. AO DID NOT FORM ANY OPINION AT T HE TIME OF ORIGINAL ASSESSMENT U/S 143(3) ON THE ISSUES COVERED IN ORDE R U/S 147/143(3) OF THE INCOME TAX ACT 1961. 7. THE ASSESSEE CRAVES THE RIGHT TO ADD, ALTER OR IN ANY WAY AMEND THE GROUNDS OF APPEAL ON OR BEFORE THE HEARING. THE ASSESSEE HAS ALSO TAKEN AN ADDITIONAL GROUND WH ICH IS READ AS UNDER:- 1. THE LD. CIT(A)-1 JAIPUR HAS ERRED IN HOLDING TH AT THERE IS NO CHANGE OF OPINION AS THE LD. AO DID NOT FORM ANY OPINION AT T HE TIME OF ORIGINAL ASSESSMENT U/S 143(3) ON THE ISSUES COVERED IN ORDE R U/S 147/143(3) OF THE INCOME TAX ACT 1961. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS REOPENED ON THE GROUND THAT IN COMPUTATION OF INCOME. THE ASSESSEE DEDUCTED A SUM OF RS. 51,22,558/- ON ACCOUNT OF PROFIT FROM SALE OF ENERG Y WHEREAS THE SAME WAS THE INCOME OF THE COMPANY AS COMPANY CLAIMED THE EXPEND ITURE AND DEPRECIATION REGARDING THIS INCOME. IT WAS NOTICED THAT PF CONT RIBUTION OF THE EMPLOYEES WAS NOT DEPOSITED ON THE PRESCRIBED TIME. THE ASSESSMENT U /S 147 READ WITH SECTION 143(3) OF THE INCOME TAX ACT 1961, WAS FRAMED VIDE ORDER D ATED 15/07/2014. WHILE FRAMING THE ASSESSMENT THE ASSESSING OFFICER MADE A DDITION OF RS. 51,22,558/- I.E. THE INCOME WHICH WAS CLAIMED AS PROFIT FROM SALE EN ERGY, WHICH WAS DEDUCTED IN COMPUTATION OF INCOME AND DISALLOWANCE OF THE EMPLO YEES PF CONTRIBUTION OF RS. 17,154/-, WHICH WAS NOT DEPOSITING BY THE ASSESSEE DURING THE PRESCRIBED TIME. 3 ITA NO. 167/JP/2016. FATEHPURIA TRANSFORMERS AND SWITCHGEARS PVT. LTD., JAIPUR. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFO RE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL. 3. AT THE TIME OF HEARING, THE LD. COUNSEL OR THE A SSESSEE VEHEMENTLY ARGUED THAT THE ADDITIONAL GROUND MAY BE ADMITTED AND HE S UBMITTED THAT HE DOES NOT WISH TO MAKE SUBMISSIONS ON OTHER GROUNDS OF THE APPEAL. THEREFORE, THE ADDITIONAL GROUND WAS TAKEN UP FOR ADJUDICATION. LD. COUNSEL S UBMITTED THAT THE REOPENING IS AFTER FOUR YEARS, THE REVENUE HAS NOT DEMONSTRATED THAT ANY INCOME IS ESCAPED DUE TO NON-FURNISHING OF ANY MATERIAL BY THE ASSESSEE O R CONCEALING OF THE FACT. HE SUBMITTED THEREFORE, THE REOPENING WAS WITHOUT ANY BASIS AND DESERVES TO BE QUASHED. 3.1 HOWEVER, DURING THE COURSE OF HEARING A QUERY W AS RAISE TO THE LD. COUNSEL FOR THE ASSESSEE UNDER WHAT PROVISION OF LAW SUCH D EDUCTION PROFIT FROM SALE OF ENERGY IN COMPUTATION OF INCOME AS MADE IS ALLOWABL E. LD. COUNSEL FOR THE ASSESSEE WAS ALSO REQUESTED TO DEMONSTRATE WHETHER SUCH PROVISION WAS DISCLOSED BY THE ASSESSEE. HE WAS NOT IN A POSITION TO DEMON STRATE SUCH PROVISION. 4. LD. DEPARTMENTAL REPRESENTATIVES OPPOSED THE SU BMISSION. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CONSULTATING ENGINEERING SERVICES (INDIA) PRIVATE L TD. VS. DEPUTY COMMISSIONER OF INCOME TAX & ANR. W.P.(C) TO 2029/2014. IN SUPPORT OF THE CONTENTION, THAT IN VIEW OF THE PROVISIONS OF FIRST PROVISO OF SECTION 147 O F THE ACT, THE REVENUE CANNOT BE PERMITTED TO REOPEN THE ASSESSMENT AS THE NECESSARY PRE-CONDITION FOR DOING SO IN THE CASE WHICH WAS BEYOND FOUR YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR 4 ITA NO. 167/JP/2016. FATEHPURIA TRANSFORMERS AND SWITCHGEARS PVT. LTD., JAIPUR. HAD NOT BEEN FULFILLED. IN OUR CONSIDERED VIEW, T HE FACTS OF THE PRESENT CASE ARE DIFFERENT AND DISTINGUISHABLE, HERE IS A CASE WHERE THE ASSESSEE HAD NOT DISCLOSED UNDER WHAT PROVISION OF THE ACT, AND HE HAD DEDUCTE D THE PROFIT FROM SALE OF ENERGY. ADMITTEDLY, THE ASSESSEE HAS ALSO CLAIMED EXPENDITU RE ON SUCH INCOME. UNDER THESE FACTS, WE ARE UNABLE TO ACCEPT THE CONTENTION OF TH E LD. COUNSEL FOR THE ASSESSEE. THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 6. APROPOS TO THE OTHER REMAINING GROUNDS, NO ARGUM ENT IS ADDRESSED. THEREFORE, THE OTHER GROUNDS ARE ALSO DISMISSED. 7. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO. 167/JP/2016 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 7 TH DAY OF JULY 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/07/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- FATEHPURIA TRANSFORMERS AND SWIT CHGEARS PRIVATE LTD. 2. THE RESPONDENT- THE ACIT, CIRCLE-1, JAIPUR 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 167/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 167/JP/2016. FATEHPURIA TRANSFORMERS AND SWITCHGEARS PVT. LTD., JAIPUR.