M/S. FAMY CARE LTD, MUMBAI V. THE ITO 2(1)(3), MUMBAI

ITA 1798/MUM/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 4298 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-09-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 12-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R M TIWARI
• Keywords: Depreciation; Bad and doubtful debts; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI B. RAMAKO TAIAH,(AM) ITA NO.1797/MUM/2008 ASSESSMENT YEAR : 1999-2000 ITA NO.1798/MUM/2008 ASSESSMENT YEAR : 2000-2001 FAMY CARE LIMITED BRADY HOUSE, 3 RD FLOOR 12/14, VEER NARIMAN ROAD, FORT, MUMBAI-400 001. ..( APPELLANT ) P.A. NO. (AAACF 1663 R) VS. INCOME TAX OFFICER WARD 2(1)(3) MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI YOGESH THAR RESPONDENT BY : SHRI R .M. TIWARI O R D E R PER D.K. AGARWAL (JM). THESE TWO APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS DATED 10.1.2008 PASSED BY THE L D. CIT(A) FOR THE ASSESSMENT YEARS 1999-2000 AND 2000-01. SINCE FACTS AR E IDENTICAL AND ISSUES INVOLVED ARE COMMON, BOTH THESE APP EALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIE NCE. 2. BRIEFLY STATED FACTS OF THE CASE EXTRACTED FROM ITA NO.1797/MUM/2008 FOR ASSESSMENT YEAR 1999-2000 ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF COPPER-T, OCP & TRADING IN PLASTICS AND DIAMONDS, FILE D RETURN DECLARING NIL INCOME UNDER NORMAL PROVISIONS OF THE ACT AND ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 2 RS.2,62,347/- U/S.115JA OF THE INCOME TAX ACT, 1961 (TH E ACT). THE ASSESSMENT WAS ALSO COMPLETED U/S.143(1) ON 21.1.2000 DETE RMINING TOTAL INCOME AT RS.NIL AND BOOK PROFIT AT RS.2,62,350 /-. SUBSEQUENTLY, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT CLAIMED ELIGIBLE DEPRECIATION ON THE BOOK PROFITS OF GOA UNIT WHEREIN THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80- IA OF THE ACT. SINCE THE ASSESSEE HAS INCREASED ITS BOOK PROFITS BY NOT CLAIMING THE DEPRECIATION AND CONSEQUENTLY CLAIMED DEDUCTION U/S .80 IA, THE ASSESSING OFFICER RE-OPENED THE ASSESSMENT BY ISSUE OF NOTI CE U/S.148 DATED 28.3.2006 AFTER RECORDING FOLLOWING REASONS:- YOU HAVE CLAIMED DEDUCTION UNDER SECTION 80IA IN RESPECT OF THE PROFITS OF THE GOA UNIT. HOWEVER, TH E ELIGIBLE DEPRECIATION ON THIS PROFIT HAS NOT BEEN C LAIMED BY YOU WHICH RESULTED IN EXCESS DEDUCTION UNDER SEC TION 80IA CLAIMED BY YOU. SINCE YOU HAVE FAILED TO DISC LOSE MATERIAL FACTS FULLY AND TRULY, INCOME LIABLE TO TA X HAS ESCAPED ASSESSMENT. YOU ARE THEREFORE, REQUESTED T O FURNISH THE DETAILED WORKING OF DEPRECIATION ALLOWA BLE FOR THE YEAR UNDER CONSIDERATION AND EXPLAIN WHY THE DEPRECIATION SHOULD NOT BE ALLOWED IN COMPUTING THE PROFITS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA O F THE I.T. ACT. IN RESPONSE, THE ASSESSEE VIDE ITS LETTER DATED 20.4.200 6 STATED THAT THE RETURN FILED U/S.139(1) MAY BE TREATED AS FILED I N RESPONSE TO NOTICE U/S.148 OF THE ACT. THEREAFTER, THE ASSESSING OFFI CER ISSUED NOTICES U/S.143(2)/142(1) FOLLOWED BY LETTER DATED 9 .6.2006 TO EXPLAIN AS TO WHY DEPRECIATION SHOULD NOT BE ALLOWED I N COMPUTING THE PROFITS ELIGIBLE FOR DEDUCTION U/S.80IA OF THE ACT. IN RESPONSE, THE ASSESSEE OBJECTED TO THE REOPENING OF THE ASSESSMENT U/S.148 AND ALSO SUPPORTED HIS CLAIM THAT THE DEPRECIATION WAS NOT CL AIMED AS THE ASSESSEE HAD AN OPTION TO CLAIM OR NOT TO CLAIM DEPRECIAT ION AS CLARIFIED BY THE HON'BLE SUPREME COURT IN CIT VS. MAH ENDRA MILLS ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 3 (2000) 243 ITR 56 (SC). EXPLANATION 5 INSERTED IN SEC.32(1) IS PROSPECTIVE AND EFFECTIVE FROM ASSESSMENT YEAR 2002-03. TH E ASSESSEE ALSO OBJECTED THE REOPENING OF THE ASSESSMENT ON THE GROUND THAT THE ASSESSEE HAD MADE FULL AND TRUE DISCLOSURE IN NOT CLAIMING OF DEPRECIATION OF GOA UNIT AND THE SAME IS EVIDENT FROM NOTE NO.1 TO THE COMPUTATION OF INCOME, SUPPORTED BY AUDIT REPORT, THEREFORE, IT IS A CASE OF CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER THE ACT. HOWEVER, THE ASSESSING OFFICER AFTER CONSIDERING THE ASSESSEE'S SUBMISSION WAS OF THE VIEW THAT THE FACT REMAINS THAT T HE ASSESSEE HAD MADE EXCESS CLAIM U/S.80IA BY NOT CLAIMING DEPRECIATIO N, THEREFORE, THERE IS AN ESCAPEMENT OF INCOME AND THE ASSE SSMENT HAS BEEN VALIDLY REOPENED U/S.148. ACCORDINGLY THE ASSESSIN G OFFICER COMPLETED THE ASSESSMENT AFTER REDUCING THE DEDUCTION U/S.8 0-IA IN RESPECT OF GOA UNIT BY ALLOWING DEPRECIATION OF RS.13,6 8,178/- AT AN INCOME OF RS.NIL AND BOOK PROFIT OF RS.2,62,347/- VIDE ORDER DATED 23.8.2006 PASSED U/S.143(3) R.W.S. 147 OF THE ACT. ON A PPEAL, THE LD. CIT(A) WHILE UPHOLDING THE ACTION OF THE ASSESSING OFFICE R IN REOPENING THE ASSESSMENT U/S.148, DISMISSED THE APPEAL OF THE ASSESSEE . 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL. GROUND 1. RE-OPENING BAD IN LAW: A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ITO-2(1)(3) OF REOPENING OF THE ASSESSMENT U NDER SECTION 147. B. THE APPELLANT PRAYS THAT THE RE-OPENING BE HELD AS BAD IN LAW. GROUND 2. WITHOUT PREJUDICE TO THE FOREGOING A. THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN DEDUCTING DEPRECIATION IN RESPECT ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 4 OF PROFITS OF THE GOA UNIT AND FOR THE PURPOSE OF CALCULATING DEDUCTION UNDER SECTION 80IA. B. THE APPELLANT PRAYS THAT DEPRECIATION NOT BE DEDUCTED FOR COMPUTING GROSS TOTAL INCOME AND FOR COMPUTING DEDUCTION UNDER SECTION 80IA. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) FURTHER SUBMITS THAT THE A SSESSEE HAS MADE COMPLETE DISCLOSURE OF FACTS AND THERE IS NO ESCAPEMENT ON THE PART OF THE ASSESSEE AND IN SUPPORT THE REFERENCE WAS ALSO MADE TO THE NOTE NO. (1) OF THE STATEMENT OF COMPUTATION OF TOTAL INCOM E WHEREIN IT HAS BEEN STATED THAT THE RESERVES THE RIGHT TO CLAIM DEPRECIATION ON GOA UNIT IN CASE TAXABLE PROFIT ARISES IN ASSESSMENT AND STATEMENT SHOWING COMPUTATION OF DEDUCTION U/S.80 IA OF DAMAN UN IT AND GOA UNIT APPEARING AT PAGE 3, 11 AND 12 OF ASSESSEE'S PAPER BOOK . HE FURTHER SUBMITS THAT THE ASSESSING OFFICER HAS NOT FOUND A NY NEW OR FRESH MATERIAL FOR INITIATING ACTION U/S.147 OF THE ACT AND ON THE SAME MATERIAL WHICH WAS AVAILABLE WHILE MAKING THE ASSESSMENT UNDER 143(1), THE ASSESSING OFFICER HAS INITIATED PROCEEDING U/S. 148 OF THE ACT WHICH IS NOT PERMISSIBLE UNDER THE LAW AND FOR THIS PROPOSITION THE RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HONBLE MAD RAS HIGH COURT IN BAPALAL AND CO. EXPORTS VS. JCIT (OSD) (20 07) 289 ITR 37 (MAD.) AND DECISIONS OF THE TRIBUNAL IN S. VINODKUMAR AND CO. VS. ACIT IN ITA NOS.3300, 3301 & 3302/MUM/04 ORDER DATED 3.7.2008 FOR ASSESSMENT YEARS 1999-00 TO 2001-02; ITO VS. BHAVIN PAREK H & VICE VERSA IN ITA NO.6414/MUM/2003 AND C.O. NO.192/MUM/20 04 FOR THE ASSESSMENT YEAR 2000-01 ORDER DATED 1.8.2008; AND AIPI TA MARKETING (P.) LTD. VS. ITO (2008) 21 SOT 302 (MUM.) WHEREIN THE TRIBUNAL EVEN AFTER CONSIDERING THE DECISION OF HON'BLE SUPREME COURT IN ACIT ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 5 VS. RAJESH JHAVERI STOCK BROKERS (P.) LTD. (2007) 291 I TR 500(SC) HAS CANCELLED THE ASSESSMENT MADE U/S.148 OF THE ACT. HE FURTH ER SUBMITS THAT SINCE THE ASSESSING OFFICER HAS NOT PASSED ANY SEPARATE ORDER AGAINST THE OBJECTIONS RAISED BY THE ASSESSEE IN RESPONSE T O NOTICE 148 OF THE ACT AND HAS ALSO NOT PROVIDED ANY COPY OF THE SAT ISFACTION RECORDED BY JCIT, THEREFORE, ON THESE GROUNDS ALSO THE ORDER PASSED BY THE ASSESSING OFFICER IS BAD IN LAW. HE, THEREFORE, SU BMITS THAT THE ORDER PASSED BY THE ASSESSING OFFICER BE CANCELLED. ON MERI TS HE VERY FAIRLY SUBMITS THAT IN VIEW OF THE DECISION OF THE FULL BENCH OF HONBLE JURISDICTIONAL HIGH COURT IN PLASTIBLENDS INDIA LTD. V S. ADDL. CIT (2009) 185 TAXMAN 187 (BOM.); THE ISSUE IS COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE, THEREFORE, THE SAME MA Y BE DECIDED ACCORDINGLY. 5. ON THE OTHER HAND THE LD. DR SUBMITS THAT FOR THE REASONS AS MENTIONED IN THE ASSESSMENT ORDER AND IN THE ORDER OF THE LD. CIT(A), THE ASSESSING OFFICER WAS JUSTIFIED IN ISSUING NOTICE U/S.14 8, THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) BE UPHELD. ON MERITS HE SUBMITS THAT SINCE THE L D. COUNSEL FOR THE ASSESSEE HAS AGREED THAT HE HAS NO CASE THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICER ON THE MERITS ALSO BE UPHEL D. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS THE ASSESSEE HAS FILED THE R ETURN WITHOUT CLAIMING DUE DEPRECIATION ON GOA UNIT. AT TH E RELEVANT TIME IT WAS OBSERVED BY THE HONBLE DIVISION BENCH OF THE HIGH CO URT THAT THERE WERE CONFLICTING DECISIONS RENDERED BY THE TWO DI VISION BENCHES OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF G RASIM ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 6 INDUSTRIES LTD. VS. ACIT REPORTED IN (2002) 245 ITR 67 7 (BOM.) AND IN THE CASE OF SCOOP INDUSTRIES (P.) LTD. VS. ITO REPORTED I N (2007) 289 ITR 198 (BOM.). THEREFORE, FULL BENCH WAS CONSTITUTED IN PLASTIBLENDS INDIA LTD. VS. ADDL. CIT (2009) 185 TAXMAN 187 (BOM. ); (2009) 318 ITR 352(BOM.)(FB). IT HAS BEEN OBSERVED BY THE HONBL E FULL BENCH THAT THE DECISION IN THE CASE OF SCOOP INDUSTRIES (P.) LT D. SUPRA, IS BASED ON THE DECISION OF THIS COURT IN THE CASE OF INDIAN RAYON CORPORATION LTD. VS. CIT (2003) 261 ITR 98 (BOM.) W HEREIN IT HAS BEEN HELD THAT CHAPTER VI-A IS A SEPARATE CODE BY ITSEL F AND IF AN ASSESSEE CLAIMS RELIEF UNDER CHAPTER VI-A OF THE ACT, THEN IT IS NOT OPEN TO THAT ASSESSEE TO DISCLAIM DEPRECIATION ALLOWANCE. IN OTHER WORDS, WHAT IS HELD IN THE CASE OF INDIAN RAYON CORPORA TION LTD. SUPRA, IS THAT, ONE CANNOT EXCLUDE DEPRECIATION ALLOWANCE WHILE COMPUTING PROFITS DERIVED FROM A NEWLY ESTABLISHED UNDERTAKING FOR COMPUTING DEDUCTION UNDER CHAPTER VI-A. IT IS SETTLED LAW THAT THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IS BINDING. 7. IN PLASTIBLENDS INDIA LTD. SUPRA, IT HAS BEEN HELD THAT (HEADNOTE AT PAGE 354 OF 318 ITR): HELD ACCORDINGLY, THAT THE ASSESSEE BY NOT CLAIMIN G CURRENT DEPRECIATION SOUGHT TO INFLATE THE PROFIT L INKED INCENTIVES PROVIDED UNDER SECTION 80-IA OF THE ACT WHICH WAS NOT PERMISSIBLE. ONCE IT WAS FOUND THAT DISCLA IMING DEPRECIATION WAS NOT IN THE INTEREST OF THE ASSESSE E, THE ASSESSING OFFICER WAS JUSTIFIED IN ALLOWING CURREN T DEPRECIATION TO THE ASSESSEE, AND IN DEDUCTING ALLO WABLE DEPRECIATION FOR THE PURPOSES OF THE SPECIAL DEDUCT ION UNDER CHAPTER VI-A OF THE ACT, EVEN THOUGH THE ASSE SSEE HAD DISCLAIMED THE ALLOWANCE FOR THE PURPOSES OF RE GULAR ASSESSMENT. ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 7 8. IN THE CASE OF THE ASSESSEE THE ASSESSING OFFICER AFTER ISSU ING INTIMATION U/S.143(1) OBSERVED THAT THE ASSESSEE WHILE CLAIMING DEDUCTION U/S.80-IA IN RESPECT OF PROFITS OF GOA UNIT HA S NOT CLAIMED DEPRECIATION, THEREFORE, ACCORDING TO THE ASSESSING OFFICE R THE INCOME ASSESSED HAS ESCAPED ASSESSMENT. UNDER SEC. 147 OF THE ACT, AFTE R ITS AMENDMENT W.E.F. 1.4.1989, WIDE POWER HAS BEEN GIVEN TO THE ASSESSING OFFICER EVEN TO COVER CASES WHERE THE ASSESSEE HAD FUL LY DISCLOSED THE MATERIAL FACTS. THE ONLY CONDITION FOR ACTI ON IS THAT THE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. SUCH BELIEF CAN BE REACHED IN ANY MANNER, AND IS NOT QUALIFIED BY A PRE- CONDITION OF FULL AND TRUE DISCLOSURE OF MATERIAL FACTS BY THE ASSESSEE AS CON TEMPLATED IN THE PRE-AMENDED SEC 147(A) OF THE ACT. IN THE INSTA NT CASE , AS FAR AS THE MERITS OF THE CASE IS CONCERNED, WITH REGARD TO THE PERMISSIBLE DEDUCTION U/S.80-IA OF THE ACT, IT IS CLEAR POSITION OF LAW THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION AFTER EXCLUDIN G DEPRECIATION ALLOWANCE AS HELD IN THE CASE OF INDIAN RA YON CORPORATION LTD. SUPRA. THEREFORE, BY MAKING EXCESS CLAIM OF DEDUCTI ON U/S.80-IA IN RESPECT OF GOA UNIT, THE INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT. 9. IN ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LTD. (2 007) 291 ITR 500 (SC) IT HAS BEEN OBSERVED AND HELD (PAGE 502 HEAD NOTE): TAXING INCOME ESCAPING ASSESSMENT IN THE CASE OF A N INTIMATION UNDER SECTION 143(1)(A) IS COVERED BY TH E MAIN PROVISION OF SECTION 147 AS SUBSTITUTED WITH EFFECT FROM APRIL 1, 1989, AND INITIATING REASSESSMENT PROCEEDI NGS IN THE CASE OF INTIMATION WOULD BE COVERED BY THE MAIN PROVISION OF SECTION 147 AND NOT THE PROVISO THERET O. ONLY ONE CONDITION HAS TO BE SATISFIED. FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO INITIATE REASSESSMENT PROCEEDINGS WHEN INTIMATION UNDER SECTION 143(1) HAS BEEN ISSUED. ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 8 HELD, ACCORDINGLY, THAT THE ASSESSING OFFICER HAD JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 FOR BRINGING TO TAX INCOME ESCAPING ASSESSMENT IN AN INTIMATION UNDER SECTION 143(1)(A) ON THE GROUND THAT THE CLAIM FOR BAD DEBTS BY THE ASSESSEE WAS NOT ACCEPTABLE AS THE CONDITIONS FOR ALLOWANCE SPECIFIED IN SECTION 36(1) (VII) AND (2) WERE NOT FULFILLED. 10. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENTS AND KEE PING IN VIEW THAT FOR THE REASONS AS MENTIONED IN THE ABOVE JUDGMEN TS INCLUDING THE DISTINGUISHING FEATURE OF THE CASE OF CIT VS. MAHEND RA MILLS (2000) 243 ITR 56 (SC) AS MENTIONED IN THE JUDGMENT IN THE CASE OF PLASTIBLENDS INDIA LTD. (SUPRA) WE ARE OF THE VIEW THA T ALL THE DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE DISTING UISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 11. AS REGARDS THE ASSESSEE'S PLEA THAT THE ASSESSING OFFICER H AS NOT DEALT WITH THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST PR OCEEDING INITIATED U/S.148 IN VIEW OF THE DECISION OF THE HON' BLE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD. VS. ITO (2003) 259 ITR 19(SC) WE FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER AFTER REPRODUCING THE ASSESSEE'S OBJECTIONS AND SUBMISSIONS AT PAGE-2, 3 AND 4 OF THE ASSESSMENT ORDER HAS CONSIDERED THE SAME IN PARA-4 OF THE ASSESSMENT ORDER BY HOLDING THAT THE FACT REMAINS THAT THE ASSESSEE HAS MADE EXCESS CLAIM U/S.80 IA BY NOT CLAIMING DEPRECIAT ION, THEREFORE, THERE IS AN ESCAPEMENT OF ASSESSMENT AND THE A SSESSMENT HAS BEEN VALIDLY REOPENED U/S.148 OF THE ACT. IN OUR VIEW THE ASSESSING OFFICER HAS PASSED A SPEAKING ORDER BY REJECTING TH E OBJECTIONS RAISED BY THE ASSESSEE AND IN HOLDING THAT THER E IS AN ESCAPEMENT OF INCOME U/S.148 OF THE ACT. FURTHER, WHER E AN ASSESSMENT ORDER IS PASSED BY THE ASSESSING OFFICER AFTER SUCH REJECTION, SUCH ORDER REJECTING THE OBJECTION HAS GOT MER GED WITH THE ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 9 ASSESSMENT ORDER AND HENCE, THE OBJECTION RAISED BY THE LD . COUNSEL FOR THE ASSESSEE IN THIS REGARD AT THIS STAGE IS DEVOID OF ANY MERIT. FURTHER IN THE ABSENCE OF ANY SUPPORTING MATERIAL TO SHOW THAT NO SATISFACTION WHICH WAS REQUIRED TO BE RECORDED BY THE JCIT WAS NOT RECORDED, THE OTHER OBJECTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IS ALSO REJECTED. 12. FOR THE ABOVE REASONS AND KEEPING IN VIEW THAT O N MERITS THERE IS NO DISPUTE BY THE LD. COUNSEL FOR THE ASSESSEE WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS FULLY JUSTIFIED IN UPHOLDIN G THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) R.W.S. 147 OF THE ACT AND ACCORDINGLY THE GROUNDS TAKEN BY THE ASSESSEE ARE REJE CTED. ITA NO.1798/MUM /2008 (ASSESSMENT YEAR 2000-01): 13. BRIEFLY STATED FACTS OF THE CASE ARE THAT IN THIS CASE ASSESSMENT WAS COMPLETED U/S.143(1) ON 20.7.2002 DETERMINING TOTA L INCOME AT RS.NIL. THEREAFTER, THE ASSESSMENT WAS RE-OPENED UNDER SE CTION 147 OF THE ACT AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3 ) ON 24.2.2003 AFTER RECALCULATING THE DEDUCTION UNDER SECTI ON 80 HHC OF THE ACT. SUBSEQUENTLY IT WAS NOTICED BY THE ASSESSING OFFI CER THAT THE ASSESSEE HAS INCREASED ITS PROFITS BY NOT CLAIMING DEPRECIATIO N IN RESPECT OF GOA UNIT AND CONSEQUENTLY CLAIMED EXCESSIVE DEDU CTION UNDER SECTION 80IA THE ASSESSMENT WAS RE-OPENED BY ISSUE OF NOTICE UNDER SECTION148 OF THE ACT DATED 28.3.2006. THE ASSESSIN G OFFICER AFTER CONSIDERING THE ASSESSEE'S SUBMISSIONS HOWEVER, COMPLETED THE ASSESSMENT IN A TOTAL INCOME OF RS. NIL UNDER NORMAL PRO VISIONS OF THE ACT AND BACK PROFIT U/S.115JA OF THE ACT, AT RS.1,71,033 /- VIDE ORDER DATED 23.8.2006 PASSED U/S.143(3) R.W.S. 147 OF THE ACT . ON APPEAL, ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 10 LD. CIT(A) WHILE UPHOLDING THE ACTION OF THE ASSESSING O FFICER DISMISSED THE ASSESSEE'S APPEAL. 14. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN GROUND NO.1 THAT THE REOPENING IS BEYOND FOUR YEARS, IN GROUND NO.2 THAT THE REOPENING IS BAD IN LAW AND IN GROUND NO.3 THAT THE DEPRECIATION SHOULD NOT BE D EDUCTED WHILE COMPUTING GROSS TOTAL INCOME FOR COMPUTING DEDUCTION U/S. 80IA OF THE ACT. 15. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS IN THE RET URN OF INCOME APPEARING AT PAGE 1-21 OF ASSESSEE'S PAPER BOOK. HE FURTHER SUBMITS THAT THE REOPENING IS BEYOND FOUR YEARS WHICH IS EVIDENT FROM THE ASSESSMENT ORDER ITSELF AS THE NOTICE U/S.148 WAS ISSUED ON 28.3.2006 I.E. AFTER THE EXPIRY OF FOUR YEARS FROM T HE END OF THE RELEVANT ASSESSMENT YEAR. HE THEREFORE, SUBMITS THAT IN V IEW OF THE FIRST PROVISO TO SEC.147, THE ACTION TAKEN BY THE ASSESSIN G OFFICER TO ISSUE NOTICE U/S. 148 OF THE ACT IS BEYOND FOUR YEARS AND HENCE, BAD IN LAW AND LIABLE TO BE CANCELLED. 16. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER O F THE ASSESSING OFFICER AND THE LD. CIT(A). 17. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE NOTICE U/S.148 WAS ISSUED AFTER THE EXPI RY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND REVENUE HAS NOT ESTABLISHED THAT THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE ITA NO.1797,98/M/08 A.Y:99-00 TO 00-01 11 TO MAKE RETURN U/S.139 OR IN RESPONSE TO NOTICE ISSUED U/ S.142(1) OR U/S.148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FA CTS NECESSARY FOR HIS ASSESSMENT , FOR THAT ASSESSMENT YEAR. IN THE ABSENCE THEREO F OR IN THE ABSENCE OF ANY OTHER CONTRARY MATERIAL PLACED ON RE CORD BY THE REVENUE WE ARE OF THE VIEW THAT THE NOTICE U/S.148 ISSU ED BY ASSESSING OFFICER IS BARRED BY LIMITATION AND CONSEQUENTLY THE ASSESSMENT ORDER MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS CANCELLED. THE LEGAL GROUNDS TAKEN BY THE ASSE SSEE ARE, THEREFORE, ALLOWED. SINCE WE HAVE DECIDED THE ISSUE ON LEGAL GROUNDS AND CANCELLED THE ASSESSMENT THEREFORE, WE DO NOT CONSIDER IT NECESSARY TO ADJUDICATE THE ISSUE ON MERITS. 18. IN THE RESULT, THE ASSESSEE'S APPEAL FOR ASSESSMENT YEAR 1999- 2000 IS DISMISSED AND FOR THE ASSESSMENT YEAR 2000-01 STAND S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.10.2010. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.10.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.