Poonawalla Estates Stud & Agri Farm, Pune V. Dy. CIT, Circle 1(2), Pune

ITA 1984/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76043 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 12-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Reassessment proceedings
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1984/PN/2012 A.Y. 2005-06 POONAWALLA ESTATES STUD & AGRI FARM, 16B-1, SAROSH BHAVAN, DR. AMBEDKAR ROAD, PUNE 411001 PAN: AABFP4766F APPELLANT VS. DY. CIT, CIRCLE 1(2), PUNE RESPONDENT APPELLANT BY : SHRI SUNIL PATHAK RESPONDENT BY : SHRI S.P . WALIMBE DATE OF HEARING: 02.01.2014 DATE OF ORDER : 03.01.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-I, [SHORT CI T(A)-I] PUNE, DATED 19.03.2012 FOR A.Y. 2005-06 ON THE FOLLOWING GROUNDS. 1. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE REASSESSMENT U/S 147 WITHOUT APPRECIATING THAT THE LEARNED A.O. HAD NOT SUPPLIED TO THE ASSESSEE, THE REASONS RECORDED FOR REOPENING THE CASE AND THEREFORE, THE REASSESSM ENT ORDER PASSED U/S 147 IS NULL AND VOID. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APPELL ANT DID NOT OBJECT OF NON COMMUNICATION OF THE REASONS IN THE REASSESSMENT PROCEEDINGS AND HENCE, THE APPELLANT W AS NOT JUSTIFIED IN RAISING THIS ISSUE IN THE APPELLATE PR OCEEDINGS WITHOUT APPRECIATING THAT THE APPELLANT HAD POINTED OUT TO THE A.O. THAT THE REASONS WERE NOT COMMUNICATED AND HENCE, THE CLAIM OF THE APPELLANT WAS JUSTIFIED AND THE REASST. ORDER PASSED U/S 147 IS INVALID IN LAW. 2 3. THE LEARNED CIT(A)-I ERRED IN HOLDING THAT WHILE COMPUTING DEDUCTION U/SEC.80-IA, SUBSIDY RECEIVED I N THE FORM OF SALES TAX BENEFIT AMOUNTING TO RS.16,04,166 /- WAS NOT DERIVED FROM THE BUSINESS OF ELIGIBLE UNDERTAKI NG AND HENCE, THE SAME SHOULD NOT BE CONSIDERED TO BE PART OF PROFITS OF ELIGIBLE UNDERTAKING QUALIFYING FOR CLAI MING DEDUCTION U/SEC.80-IA OF THE INCOME TAX ACT. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE SU BSIDY RECEIVED BY THE APPELLANT IN THE FORM OF SALES TAX BENEFIT WAS DERIVED FROM THE BUSINESS OF ELIGIBLE UNDERTAKING A ND HENCE, THE APPELLANT HAD RIGHTLY CONSIDERED THE SAME AS PA RT OF THE PROFITS OF THE ELIGIBLE UNDERTAKING WHILE COMPUTING THE DEDUCTION U/S 80IA. 5. LEARNED CIT(A)-I ERRED IN CONFIRMING THE DISALLOWAN CE OF RS.1,16,886/- BEING PROVISION OF LEAVE ENCASHMENT W ITHOUT APPRECIATING THAT THE DISALLOWANCE WAS NOT JUSTIFIE D IN LAW. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE LEARNED AUTHORIZED REPRESENTATIVE HAS POINTE D OUT TO THE ASSESSING OFFICER THAT THE REASONS WERE NOT COM MUNICATED AND HENCE, THE CLAIM OF THE ASSESSEE AND THE REASSE SSMENT ORDER PASSED U/S.147 IS INVALID IN LAW. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE HAS RELIED ON THE DECISIO N OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LTD., (2012) 340 ITR 66 (BOM), WHEREIN THE RE ASSESSMENT WAS NOT UPHELD SINCE THE REASONS RECORDED FOR REOPE NING OF THE ASSESSMENT WERE NOT FURNISHED TILL COMPLETION OF TH E ASSESSMENT. EVEN BEFORE US, THE ASSESSEE HAS REPEATEDLY ASKED T HE REASONS FOR REOPENING BUT SAME WERE NOT FURNISHED TO THE AS SESSEE. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. S O FOLLOWING THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CAS E OF VIDESH SANCHAR NIGAM LTD. (SUPRA), WHEREIN THE REASSESSMEN T PASSED U/S.147 OF I.T. ACT, HAS BEEN CANCELLED BECAUSE THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WERE NOT F URNISHED IN SPITE OF SPECIFIC REQUESTS MADE ON BEHALF OF ASSESS EE. SINCE WE ARE DISMISSING THE APPEAL ON PRELIMINARY ISSUE, THE ISSUES RAISED 3 GOES ON ACADEMIC AND WE ARE REFRAINING FROM ADJUDIC ATING THE ISSUE ON MERIT. SAME MAY BE AGITATED IT NEED ARISE TO DO SO. 3. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 3 RD OF JANUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 3 RD JANUARY, 2014 GCVSR COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT(A)-I, PUNE 4) THE CIT-I, PUNE 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE