The ITO, Ward-1(1), Surat V. M/s. Ekta Prints Pvt.Ltd., Surat

ITA 2260/AHD/2011

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3659 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 07-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURIEN
• Keywords: Reopening of assessment; Unexplained investment; Depreciation; Difference of opinion; Corroborative evidences; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 148; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM, & SHRI MANISH BORAD , AM. ITA NO.2260/AHD/2011 ASST. YEAR: 2004-05 INCOME-TAX OFFICER, WD-1(1), SURAT. VS. M/S EKTA PRINTS PVT. LTD., 156, GIDC, PANDESARA, SURAT. APPELLANT RESPONDENT PAN AAACE 5108L APPELLANT BY SHRI JAMES KURIEN, SR. DR RESPONDENT BY SHRI HARDIK VORA, AR DATE OF HEARING: 25/5/2016 DATE OF PRONOUNCEMENT: 01/06/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF REVENUE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(A)-1, SURAT, DATED 30.6.2011 IN APPEAL NO.CAS-1 /275/2010-11 PASSED AGAINST ORDER U/S 143(3) R.W.S. 147 OF THE I T ACT, 1961 (IN SHORT THE ACT) FOR ASST. YEAR ON 30/12/2010 BY ITO, WD-1(1), SURAT. 2. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT T HE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF DYEING AND PRINTING OF FABRICS ON JOB WORK BASIS. RETURN OF INCOME WAS FILED ON 30 TH JUNE, 2004 DECLARING TOTAL INCOME OF RS.5,72,097/- . ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S 153A OF T HE ACT ON A ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 2 TOTAL INCOME OF RS.1,83,40,090/-. THE MATTER TRAVEL LED UPTO THE TRIBUNAL WHEREIN VIDE ITS ORDER IN ITA NOS.2696 TO 2698, 1999 TO 2702/AHD/2007 DATED 15 TH JANUARY, 2010, TOTAL INCOME WAS DETERMINED AT RS.14,00,230/- AFTER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL. THEREAFTER ON THE BASIS OF OFFICE RECORDS , GATHERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) R.W .S.153A OF THE ACT, LD. ASSESSING OFFICER OBSERVED THAT MONTH-WISE DETAILS OF PURCHASES OF COLOUR CHEMICALS WERE FURNISHED BY THE LD. AR OF ASSESSEE ON 9.7.2006 SHOWING THAT TOTAL PURCHASES F OR ASST. YEAR 2004-05 STOOD AT RS.3,34,33,991/- WHEREAS IN THE AU DITED ACCOUNTS FILED WITH THE RETURN OF INCOME OF PURCHASE OF COLO UR CHEMICALS WAS SHOWN AT RS.2,86,74,195/-. THEREFORE, THERE WAS A D IFFERENCE OF RS.47,59,796/- WHICH THE LD. ASSESSING OFFICER DOUB TED AS UNACCOUNTED PURCHASES. DUE TO THIS DIFFERENCE IN TH E FIGURES NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 28 TH AUGUST, 2009 FOLLOWED BY NOTICE U/S 142(1) OF THE ACT ON 9.4.201 0. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT, LD. AR SUBMITTED THAT THERE WAS NO UNACCOUNTED PURC HASES BUT THE DIFFERENCE OF RS. 47,59,796/- WAS ONLY DUE TO THE A DJUSTMENT OF CENVAT CREDIT , DISCOUNT, OCTROI AND AVERAGE OF PUR CHASES WHICH HAVE ALL BEEN ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCO UNT AND FURNISHED THE FOLLOWING RECONCILIATION STATEMENT TO SUBSTANTI ATE ITS CONTENTION :- ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 3 PARTICULARS AMOUNT (RS.) TOTAL AMOUNT AS PER COLOUR CHEMICALS SUPPLIED A/C 3,34,33,991 LESS CENVAT CREDIT AVAILED ON PURCHASES 37,80,262 DISCOUNT ON PURCHASES/GOODS RETURN 18,32,374 2,78,21,355 ADD OCTROI ON PURCHASES 5,93,532 FREIGHT ON PURCHASES 2,59,308 TOTAL AMOUNT OF PURCHASES DEBITED TO P & L A/C 2,8 6,74,195 HOWEVER, LD. ASSESSING OFFICER WAS NOT CONVINCED WI TH THE REPLY OF ASSESSEE AND MADE ADDITION OF RS.47,59,796/- TOWARD S UNACCOUNTED PURCHASES AND ADDED THE SAME TO THE TOTAL INCOME OF RS.14,00,227/- (POST GIVING EFFECT TO THE TRIBUNALS ORDER DATED 1 5.1.2010) AND ALSO ALLOWED DEDUCTION OF RS.8,27,127/- ON ACCOUNT OF LO SS DUE TO FIRE WHICH WAS WRONGLY DENIED DURING ASSESSMENT PROCEEDI NGS U/S 143(3) R.W.S. 153A OF THE ACT. INCOME OF THE ASSESSEE WAS ASSESSED AT RS.53,32,896/-. 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CI T(A) ON TWO GROUNDS FIRSTLY AGAINST ISSUANCE OF NOTICE U/S 148 OF THE ACT AND CHALLENGING THE VALIDITY OF RE-ASSESSMENT PROCEEDIN GS U/S 143(3) R.W.S. 147 OF THE ACT AND SECONDLY AGAINST THE ADDI TION OF RS.47,59,796/- ALLEGING UNACCOUNTED PURCHASE OF COL OUR CHEMICALS. 4. LD. CIT(A) DELETED THE ADDITION OF RS.47,59,796/ - WITH THE OBSERVATION THAT, RECONCILIATION STATEMENT SUBMITTE D BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS CONTAINED ALL THE DETAILS WHICH ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 4 WERE PASSED THROUGH THE REGULAR BOOKS OF ACCOUNT AN D THE VARIATION WAS ONLY ON ACCOUNT OF ADJUSTMENT OF CENVAT CREDIT, OCTROI, FREIGHT AND DISCOUNT RELATING TO PURCHASES AND THERE WAS NO UNA CCOUNTED PURCHASES MADE BY THE ASSESSEE. HOWEVER, LD. CIT(A) DISMISSED THE GROUND OF ASSESSEE RELATING TO REOPENING OF ASSESSM ENT PROCEEDINGS U/S 147 BY ISSUANCE OF NOTICE U/S 148 OF THE ACT AN D HELD THAT ISSUANCE OF NOTICE U/S 148 OF THE ACT AND REOPENING OF ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT ARE VALID IN LAW. 5. NOW AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE T RIBUNAL RAISING FOLLOWING GROUNDS OF APPEAL :- [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A)-I, SURAT HAS ERRED IN DELETING THE ADDITION OF RS.47,59,796/- MADE ON ACCOUNT OF INVESTMENT MADE IN PURCHASE OF C OLOUR AND CHEMICAL, WITH NOTING THAT ASSESSEE FAILED TO EXPLA IN THE SOURCE OF INVESTMENT, IN SPITE OF BEING AFFORDED AMPLE OPPORT UNITIES TO DO SO. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET-SIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EXTENT. 6. LD. DR SUBMITTED AS FOLLOWS :- 1. THE LD. CIT(A) DID NOT APPRECIATE THE FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT SATIS FACTORILY EXPLAIN THE ISSUE OF UNACCOUNTED PURCHASE OF COLOUR CHEMICALS. 2. THE LD. CIT(A) DID NOT APPRECIATE THE FACT THAT NO SATISFACTORY EXPLANATION HAS BEEN FURNISHED IN AS SUCH AS THE EV IDENCE IN RESPECT OF CENVAT AVAILED FOR PURCHASE BUT ONLY PRODUCED A REC ONCILIATION BETWEEN THE PURCHASE FIGURES AND THE AMOUNT PAID TO THE SUP PLIERS WERE FURNISHED. ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 5 3. THE LD. CIT(A) DID NOT APPRECIATE THE FACT THAT IN THE ABSENCE OF PROOF OF CENVAT AVAILED IN SUPPORT OF ITS CLAIM, TH E DEPARTMENT CANNOT RELY UPON THE STATEMENT OF RECONCILIATION TO PROVE THE POINT THAT THE PURCHASE WAS TRANSFERRED TO CENVAT ACCOUNT AND THER EFORE, THE PURCHASE OF COLOUR CHEMICALS TO THE EXTENT OF 47,59,796/- WA S NOT PASSED THROUGH THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 4. THESE FACTS CLEARLY SHOWS THAT THE ASSESSEE HAS MERELY TRIED TO COVER UP THE MISTAKE MADE DURING THE COURSE OF EARL IER ASSESSMENT AND THE PURCHASE OF COLOUR CHEMICALS TO THE EXTENT OF 4 7,59,796/- SHOULD BE TREATED AS UNACCOUNTED INVESTMENT IN THE HANDS OF T HE ASSESSEE. 7. ON THE OTHER HAND, LD. AR RAISED AN ALTERNATE PL EA AND CHALLENGED THE ORDER OF LD. CIT(A) OBSERVING THAT T HE REOPENING OF ASSESSMENT PROCEEDINGS ARE VALID IN LAW. THE LD. AR SUBMITTED THAT, THIS ALTERNATE PLEA CAN BE RAISED UNDER RULE 27 OF THE ITAT RULES, 1963 EVEN WITHOUT FILING CROSS OBJECTION OR APPEAL AGAINST THE IMPUGNED ORDER. LD. AR FURTHER SUBMITTED THAT AS PE R RULE 27 OF THE ITAT RULES, THE RESPONDENT THAT HE MAY NOT HAVE APPEAL MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GR OUNDS DECIDED AGAINST HIM . THE LD. AR FURTHER SUBMITTED THAT ORIGINAL ASSESS MENT U/S 143(3) R.W.S. 153A OF THE ACT FOR ASST. YEAR 20 04-05 WAS COMPLETED ON 29.12.2006. THEREAFTER ON THE BASIS OF AUDIT QUERY THE SAID ORIGINAL ASSESSMENT WAS REOPENED BY ISSUING NO TICE U/S 148 OF THE ACT ON 28.8.2009 I.E. AFTER THE EXPIRY OF PERIO D OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR WHICH EXPIRED O N 31.3.2009 AND THUS THE SAME WAS TIME BARRED. AS THE SAME COULD HA VE BEEN ISSUED IF THE ASSESSEE HAD FAILED FULLY AND TRULY TO DISCL OSE ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT, WHICH IS NOT THE FACT IN THE PRESENT CASE, SINCE THE REOPENING HAS BEEN DONE ON THE BASIS OF E RRONEOUS ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 6 UNDERSTANDING OF THE DATA SUBMITTED DURING THE COUR SE OF ORIGINAL ASSESSMENT PROCEEDINGS AND THERE WAS NO NEW MATERIA L EVIDENCE AVAILABLE SHOWING THAT ASSESSEE HAS CONCEALED INCOM E AND, THEREFORE, THE ISSUANCE OF NOTICE U/S 148 OF THE AC T WAS BAD IN LAW AND SO REASSESSMENT PROCEEDINGS WHICH ARE ILLEGAL A ND BAD IN LAW WHICH NEED TO BE QUASHED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THROUGH THIS APPEAL REVENUE HAS CHALLENG ED THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.47,59,796 /- MADE ON ACCOUNT OF INVESTMENT MADE IN PURCHASES OF COLOUR CHEMICALS . ON THE OTHER HAND, ON BEHALF OF THE RESPONDENT, LD. AR RELYING O N RULE 27 OF ITAT RULES, 1963 HAS CHALLENGED THE ORDER OF LD. CIT(A) JUSTIFYING THE REOPENING OF ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT. 9. WE FIND THAT AS PER RULE 27 OF ITAT RULES, THE R ESPONDENT EVEN WITHOUT FILING AN APPEAL OR A CROSS OBJECTION CAN S UPPORT THE ORDER OF CIT(A) ON ANY OF THE GROUNDS WHICH HAVE BEEN DECIDE D AGAINST THE RESPONDENT UNDER THIS SCOPE OF RAISING A PLEA OF MA INTAINABILITY OF THE APPEAL WITHOUT FILING AN APPEAL IS LIMITED UNDER RU LE 27 OF THE ITAT RULES. IN OTHER WORDS IF HE SUCCEEDS ON THE PLEA RA ISED UNDER RULE 27 OF THE ITAT RULES THEN THE IMPUGNED ORDER OF LD. CI T(A) WILL HAVE FULL EFFECT IN SO FAR AS IT IS AGAINST THE REVENUE AND T HEREFORE, IF THE PLEA RAISED BY THE ASSESSEE IS ACCEPTED. AS REGARDS THE VALIDITY OF THE RE- ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT, THEN THE EFFECT OF THE SAME WOULD BE ONLY TO THE EXTENT THAT THE APPEAL FILED BY THE REVENUE WILL BE DEFEATED. THEREFORE, GOING THRO UGH THE RULE 27 OF ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 7 THE ITAT RULES, WE ARE OF THE VIEW THAT THE ALTERNA TE PLEA OF THE RESPONDENT I.E. ASSESSEE CAN BE ADJUDICATED WITH RE GARD TO THE VALIDITY OF REASSESSMENT PROCEEDINGS. 10. WE OBSERVE THAT FOLLOWING NOTICE WAS ISSUED VID E ANNEXURE-A ATTACHED TO THE NOTICE U/S 148 OF THE ACT TO THE AS SESSEE ON 28.8.2009 SHOWING THE REASON FOR REOPENING OF ASSES SMENT PROCEEDINGS:- ANNEXURE-A A SEARCH U/S. 132 OF THE ACT WAS CARRIED OUT IN. TH E CASE OF THE ASSESSEE ON 30.08.04. AS SUCH, A NOTICE U/S. 153A(A) OF THE ACT WAS ISSUED O N 13.12.04, IN RESPONSE TO WHICH, THE ASSESSES FILED ITS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION ON 30.03,05, DECLARING A TOTAL INCOME OF RS.. 5,72,100/-. ASSESSMENT IN THE CASE WAS COMPLETED U/S. 143(3) R.W.S 153A OF THE ACT ON 29.12.06. DETERMINING THE TOTAL INCOM E OF THE ASSESSEE COMPANY AT RS, 1,83,40,094/-. ON APPEAL, THE LD. CIT(A) REDUCED TH E TOTAL INCOME OF THE ASSESSEE TO RS.16,29,829/-. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF DYEING AND PRINTING OF FABRICS ON JOB WORK BASIS. IT IS SEEN FROM THE OFFICE RECORDS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, .THE ASSESSING OFFICER HAD CALLED FOR DETAILS IN RESPECT OF MONTH WISE PURCHASE' OF COLOUR CHEMICALS. THE SAME IS SEEN TO HAVE BEEN FURNISHED BY THE ASSESSEE COMPANY VIDE ITS AUTHORIZED REPRESENTATIVES' WRITTEN SUBMISSION, DTD. 19.07.06. DETAILS IN THIS RESPECT WAS FURNISHED BY THE LD. AUTHORISED REPRESENTATIVE OF T HE ASSESSEE COMPANY AT POINT NO.18 OF THE SAID SUBMISSION, FEATURING AT PAGE NO.8. ON GOING T HROUGH THE SAID DETAILS, IT IS SEEN THAT THE ASSESSEE HAD PURCHASED COLOUR CHEMICALS OF RS.3,34, 33,991/- DURING THE YEAR UNDER CONSIDERATION. WHEREAS, IN THE AUDITED ACCOUNTS FIL ED WITH THE RETURN OF INCOME, IT IS SEEN FROM SCHEDULE 7 OF THE P & L ACCOUNT THAT IT HAS DI SCLOSED PURCHASE OF COLOUR CHEMICALS OF RS.2,86,74,195 ONLY. 3 THE ABOVE FACTS REVEAL THAT PURCHASE OF COLOUR CH EMICALS TO THE EXTENT OF RS.47,59,796/- IS NOT PASSED THROUGH THE BOOKS OF ACCOUNTS OF THE ASS ESSEE COMPANY. THIS IMPLIES THAT THE SAID PURCHASE OF RS.47,59,796/- IS UNACCOUNTED AND THAT THE COST OF THE SAME IS MET OUT OF INCOME NOT DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCO ME. 4. IN VIEW OF THE ABOVE FACTS, THE UNDERSIGNED HAS A REASON TO BELIEF THAT AT LEAST AN INCOME TO THE EXTENT OF RS. 47,59,796/- HAS ESCAPED, ASSESSME NT IN THE HANDS OF THE ASSESSEE COMPANY FOR THE YEAR UNDER CONSIDERATION WITHIN THE MEANING OF SECTION 147 OF THE ACT AND THE UNDERSIGNED IS SATISFIED THAT IS A FIT CASE FOR ISS UE OF NOTICE U/S 148 OF THE ACT. ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 8 11. WE FURTHER OBSERVE THAT PROVISIONS OF SECTION 1 47 OF THE ACT READ AS UNDER :- SEC.147 OF IT ACT, 1961 147. INCOME ESCAPING ASSESSMENT. - IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUC H INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSME NT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE- COMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, A S THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTION S 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB- SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE F OR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH A SSESSMENT YEAR BY REASON OF THE F AILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB- SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DIS CLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR TH AT ASSESSMENT YEAR: PROVIDED FURTHER THAT THE ASSESSING OFFICER MAY ASS ESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTERS WHICH ARE THE SUBJECT MATTERS OF ANY APPEAL, REFERENCE OR REVISION, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPE D ASSESSMENT. EXPLANATION 1. PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGEN CE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE W ITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING SHA LL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED AS SESSMENT, NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOT AL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUN T WHICH IS NOT CHARGEABLE TO INCOME - TAX ; (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESS EE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, AL LOWANCE OR RELIEF IN THE RETURN ; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER-ASSESSE D ; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RAT E ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCE SSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR AN Y OTHER ALLOWANC E UNDER THIS ACT HAS BEEN ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 9 COMPUTED. EXPLANATION 3. FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THA T THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SECTION (2) OF SECTION 148. 12. NOW APPLYING THE PROVISIONS OF SEC.147 OF THE A CT TO THE FACTS OF THE CASE, WE OBSERVE THAT NOTICE U/S 148 OF THE ACT CAN BE ISSUED AFTER THE COMPLETION OF FOUR YEARS FROM THE END OF ASSESSMENT YEAR ONLY WHEN ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF FAILURE ON THE PA RT OF ASSESSEE TO MAKE A RETURN U/S 139 OF THE ACT OR IN RESPONSE TO A NOTICE U/S 142(1) OR 148 OF THE ACT OR TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YE AR. THE BASIC REASON IN THE CASE OF ASSESSEE FOR ISSUING OF NOTIC E U/S 148 WAS THAT LD. ASSESSING OFFICER OBSERVED FROM THE OFFICE RECO RDS HELD WITH THE DEPARTMENT (WHICH WERE OBTAINED FROM ASSESSEE DURIN G ASSESSMENT PROCEEDINGS COMPLETED U/S 143(3) R.W.S. 153A OF THE ACT) THAT THE PURCHASES AS PER AUDITED FINANCIAL STATEMENT WAS SH OWN AT RS.2,18,74,195/- WHEREAS THE MONTH-WISE DETAILS OF PURCHASES SUBMITTED BY ASSESSEE DURING THE COURSE OF ASSESSME NT PROCEEDINGS SUBMITTED ON 19.7.2007 SHOWED THE PURCHASES AT RS.3 ,34,33,991/- AND ON THE BASIS OF THESE DETAILS LD. ASSESSING OFF ICER WAS OF THE VIEW THAT THE DIFFERENCE OF PURCHASE I.E. RS. 47,59,796/ - (RS.3,34,33,991/- RS.2,86,74,195/-) IS OF UNACCOUNTED PURCHASES. 13. GOING THROUGH THE ANNEXURES A ANNEXED WITH THE NOTICE U/S 148 OF THE ACT, ISSUED BY LD. ASSESSING OFFICER, WE OBSERVE THAT THE ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 10 INFORMATION HAS BEEN GATHERED FROM THE RECORD HELD WITH THE DEPARTMENT WHICH WERE SUBMITTED BY ASSESSEE ONLY DU RING REGULAR COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 153A OF THE ACT AND THEY WERE VERY MUCH AVAILABLE BEFORE THE LD. AS SESSING OFFICER WHO HAS THEREAFTER FRAMED THE ASSESSMENT ORDER. CER TAINLY THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE COMPANY TO D ISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR ASSESSME NT AND AS THERE BEING NO NEW OR FRESH MATERIAL BEFORE THE ASSESSING OFFICER, MERE CHANGE OF OPINION CANNOT FORM THE BASIS OF REOPENIN G THE ASSESSMENT. THEREFORE, APPEAL OF THE DEPARTMENT CAN BE DISMISSED ON THIS GROUND. WITH THE HELP OF RULE 27 OF ITAT RU LES, RESPONDENT CAN RAISE AN ARGUMENT QUA AN ISSUE WHICH HAS BEEN D ECIDED AGAINST HIM IN THE IMPUGNED ORDER. THE RESPONDENT MAY NOT G ET FURTHER POSITIVE RELIEF. FOR EXAMPLE THE LD. CIT(A) HAS DEC IDED CERTAIN ADDITIONS AGAINST THE ASSESSEE AND ASSESSEE DID NOT FILE APPEAL AGAINST CONFIRMATION OF THOSE ADDITIONS, MEANING TH EREBY THAT THOSE ISSUES HAVE BECOME FINAL. THEY CANNOT BE DELETED BY QUASHING THE ASSESSMENT ORDER ON THE GROUND OF REOPENING. IN OTH ER WORDS REVENUE CANNOT BE PUT IN MORE DISADVANTAGEOUS SITUA TION EXCEPT DISMISSAL OF ITS APPEAL. IN THE APPEAL OF REVENUE, RESPONDENT ASSESSEE CAN NOT GET POSITIVE RELIEF. HE CAN ONLY G ET THE APPEAL DISMISSED ON THE GROUND THAT CIT(A) HAS ERRED IN AP PRECIATING THE ISSUE OF RE-OPENING. 14. ON MERITS ALSO WE ARE OF THE VIEW THAT LD. CIT( A) HAS RIGHTLY OBSERVED THAT THE DIFFERENCE BETWEEN PURCHASE FIGUR ES AS PER AUDITED FINANCIAL STATEMENTS AND AS PER CONSOLIDATED MONTHL Y DETAILS ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 11 FURNISHED BY ASSESSEE DURING ASSESSMENT PROCEEDINGS , PERTAINED ONLY TO THE ADJUSTMENT OF CENVAT CREDIT, DISCOUNT O N PURCHASES, ADJUSTMENT ON ACCOUNT OF OCTROI AND PAID ON PURCHAS ES AND ALL THESE ADJUSTMENTS WERE DULY GIVEN EFFECT IN THE BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE AND THERE IS NO OTHER EVIDEN CE BROUGHT ON RECORD BY THE LD. ASSESSING OFFICER TO PROVE THAT T HERE WAS ANY UNACCOUNTED PURCHASES. OBSERVATIONS MADE BY LD. CIT (A) ARE MENTIONED HEREUNDER :- 5. DECISION : THE ARGUMENTS OF THE ASSESSING OFFICER AS WELL AS A PPELLANT HAVE BEEN CONSIDERED. THE APPELLANT HAS MADE OUT A STRONG AND GOOD CASE AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER. THE APPELLA NT HAS CORRECTLY POINTED OUT THAT FIGURE OF RS 2 86, 74,195 DEBITED IN PROFIT & LOSS A/C AND RS 3, 34, 33, 991/- SHOWN AS CREDITORS HAVE BOTH PASSED THROUGH BOOKS. THEN HOW CAN IT BE UNDISCLOSED? IF BOTH THE ENTRIES HAVE PASSED THROUG H REGULAR BOOKS, IT CERTAINLY CANNOT BE THAT ANY OF THESE AMOUNT IS UNDISCLOSED. THE APPELLANT HAD PUT UP ALL THE MATERIALS AND SUPPORTING EVIDENCES BEFORE THE A SSESSING OFFICER AS IS CLEAR FROM ARGUMENTS OF APPELLANT MENTIONED ABOVE, BUT A. O. FAILED TO APPRECIATE THE SAME. IN VIEW OF 'THE ARGUMENTS ADVANCED BY THE APPELLANT , IT IS HELD THAT ADDITION OF RS 47, 59, 7961- MADE BY THE ASSESSING OFFICER DOES NOT STAND THE TE ST OF SCRUTINY. THEREFORE, THE ADDITION IS DELETED 15. WE, THEREFORE, ON MERITS SUPPORT THE ORDER OF L D. CIT(A) AND DO NOT CALL FOR ANY INTERFERENCE IN HIS ORDER. - ITA NO. 2260/AHD/2011 ASST. YEAR 2004-05 12 16. GROUND NOS.2 & 3 ARE GENERAL IN NATURE, WHICH N EED NO ADJUDICATION. 17. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1/6/2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 01/06 /2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 27/05/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 27/5/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 1/6/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: