ACIT, UDAIPUR V. M/s. Kalpana Precipitate P. Ltd., UDAIPUR

ITA 22/JODH/2014

• Counselvise Citation: 2223314 RSA 2014
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FACTS GIVEN
• Assessee Lawyers: A O IN ASSESSMENT
• Keywords: Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 43B; 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA , JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 22 / JU/ 20 1 4 ASSESSMENT YEAR: 200 7 - 08 THE A.C.I.T VS. M/S KALPANA PRECIPITATES P. LTD CIRCLE - 2 7A, NEW FATEHPURA, UDAIPUR . UDAIPUR PAN NO. AABCK 0189 Q (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI SHRAWAN KUMAR GUPTA DEPARTMENT B Y : SHRI N.A. JOSHI , DR DATE OF H EARING : 0 5 . 0 8 .201 4 DATE OF PRONOUN CEMENT : 13 . 0 8 . 201 4 ORDER PER HARI OM MARATHA , J .M. TH IS APPEAL BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE CIT (A) , UDAIPUR DATED 2 5 . 1 0 .20 1 3 PERTAINING TO A.Y 200 7 - 20 0 8 . 2 2. FOLLOWING GROUND HA S BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) HAS ERRED IN Q UASHING THE PROCEEDINGS INITIATED U/S 148 OF THE I.T. ACT WITHOUT APPRECIATING THE REASON FOR REOPENING AND FACTS GIVEN BY THE A.O IN THE ASSESSMENT ORDER. 2.1 THE FACTS OF THE CAS E ARE THAT THE ASSESSEE COMPANY CARRIES ON BUSINESS OF MANUFACTURE OF HYDRATED LIKE AND PCC . FOR A.Y. 200 7 - 0 8 , IT FILED ITS RETURN OF INCOME [ROI] DECLARING TOTAL INCOME AT RS. NIL. SCRUTINY ASSESSMENT WAS MADE ON 29.12.2009 AT A TOTAL INCOME OF RS. 79,7 2,966/ - . SUBSEQUENTLY, IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED AND WAS ALLOWED SET OFF BUSINESS LOSSES AMOUNTING TO RS. 22,87,297/ - INSTEAD OF RS. 17,50,706/ - WHICH, ACCORDING TO THE A.O, WAS ONLY ALLOWABLE. THUS, FEELING THAT EXCESS ALLOWANCE OF RS. 5,36,591/ - HAS BEEN MADE AND THEREBY INCOME HAS ESCAPED ASSESSMENT. THE REASON FOR THIS DISALLOWANCE WAS THAT THE ASSESSEE HAD NOT PAID INTEREST SUBSIDY OF RS. 78,975/ - , THEREFORE, THE A.O WAS OF THE OPINION THAT THIS AMOUNT WAS NOT ALLOWABLE U/S 43B OF THE INCOME - TAX ACT, 1961 ['THE ACT' FOR SHORT]. THUS, TOTAL INCOME OF RS. 6,15,566/ - [RS. 5,36,591/ - + 78,975/ - ] HAS ESCAPED ASSESSMENT AND BRINGING THE SAME TO TAX, THE A.O HAS INITIATED PROCEEDINGS U/S 147 3 R.W.S 148 OF THE ACT BY ISSUING NOTICE DATED 19 .9.2011. BUT THE ASSESSEE REQUESTED THAT THE RETURN FILED ORIGINALLY ON 11.10.12007 MAY BE TREATED AS HIS RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. THIS ACTION OF THE ASSESSEE WAS CHALLENGED AND THE LD. CIT(A) FOUND THAT IT IS A CASE OF CHAN GE OF OPINION AND FOR WHICH ACTION U/S 147 R.W.S 148 OF THE ACT CANNOT BE INITIATED. IN THIS REGARD, RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE SUPREME HIGH COURT REPORTED IN [2010] 228 CTR [SC] 488 IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. WHEREIN IT HAS BEEN HELD THAT E V EN AFTER 1 ST APRIL, 1989, THE A.O HAS AMPLE POWER TO REOPEN ASSESSMENT U/S 147 PROVIDED HE HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AND THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAP EMENT OF INCOME. IT HAS BEEN FURTHER HELD THAT MERE CHANGE OF OPINION, PER SE, BE A REASON FOR REOPENING THE COMPLETED ASSESSMENT U/S 143(3) OF THE ACT. BY FOLLOWING THE HON'BLE SUPREME HIGH COURT JUDGMENT, THE LD. CIT(A) QUASHED THE ASSESSMENT PROCEEDIN GS. AGAINST THIS FINDING THE REVENUE HAS COME IN APPEAL. 2.2 BEFORE US BOTH THE PARTIES HAVE REITERATED THEIR EARLIER ARGUMENTS. AFTER CONSIDERING THEM WE HAVE ALSO REACHED TO A CLEAR CUT CONCLUSION THAT THIS IS MERE AND SHEER CASE OF CHANGE OF OPINION. IN THE LIGHT OF THE ABOVE MENTIONED JUDGMENT OF THE HON'BLE SUPREME 4 HIGH COURT, THIS IS NOT PERMISSIBLE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED FINDING AND THEREFORE, WE CANNOT ALLOW THIS APPEAL. 5 . IN THE RESU LT, THE APPEAL OF THE REV ENUE IN ITA NO. 22 /JU/2014 STANDS DISMISSED. ORDER PRON OUNCED IN THE COURT ON 13 TH AUGUST , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEM B ER DATED : 13 TH AUGUST , 201 4 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR