Sanwar Mal Jangir, SARDARSHAHAR V. ITO, CHURU

ITA 23/JODH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5297 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 15-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Keywords: Tangible material; Speculation loss; Difference of opinion; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 23 / JODH /201 5 (ASST. YEAR : 20 08 - 09 ) SANWAR MAL JANGID, PROP. M/S. INDIAN ART, C/O M/S. VISHWAKARMA TIMBER MART, SARDARSHAHAR, DIST. CHURU. VS. ITO, WARD - II, CHURU. PAN NO. AFOPJ 6870 L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : SHRI S.L. MOURYA - DR DATE OF HEARING : 11 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 11 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - III , JAIPUR , DATED 19 / 11 /201 4 . 2. IN GROUND NOS. 1 TO 6 , THE GRIEVANCE OF THE ASSESSEE IS THAT THE REOPENING OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER BY ISSUANCE OF NOTICE UNDER SEC. 148 (2) OF THE ACT DATED 22/02/2011 IS NOT VALID AS THE ORIGINAL ASSESSMENT UNDER SEC. 143(3) OF THE AC T WAS MADE ON 29/12/2009 AFTER THE DECISION OF THE HON'BLE SUPREME COURT DATED 31/08/2009 IN THE CASE OF M/S. LIBERTY INDIA VS. CIT (317 ITR 218) ALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SEC. 10BA ON DUTY DRAWBACK. 2 ITA NO. 23 / JODH /201 5 3 . BRIEF FACTS OF THE CASE ARE THAT IN THE ASSESSMENT MADE UNDER SEC. 143 ( 3) OF THE ACT ON 29/12/2009, THE ASSESSING OFFICER DISALLOWED DEDUCTION UNDER SEC. 10BA TO THE ASSESSEE ON DUTY DRAWBACK RECEIPTS OF RS. 18,07,331/ - . THEREAFTER, THE ASSESSING OFFICER ISSUE D NOTICE UNDER SEC. 148(2) OF THE ACT TO THE ASSESSEE FOR REOPENING OF THE ASSESSMENT ON THE GROUND THAT THE ASSESSEE CREDITED A SUM OF RS. 18,07,331/ - TO THE PROFIT & LOSS ACCOUNT UNDER THE HEAD DUTY DRAWBACK AND REMISSION OF DUTY DRAWBACK WAS MADE UNDER THE STATUTORY PROVISION OF THE CUSTOMS ACT FRAMED BY THE GOVERNMENT OF INDIA. THEREFORE, THE PROFIT DERIVED BY WAY OF SUCH INCENTIVE DID NOT FORM PART OF PROFIT FOR THE BENEFIT OF SEC.10BA NOT BEING D E RIVED FROM THE MANUFACTURING ACTIVITIE S OF THE E LIGIBLE GOODS. THE ASSESSEE RECEIVED DUTY DRAWBACK OF RS. 18,07,331/ - AND CLAIMED BENEFIT UNDER SEC. 10BA ON THIS AMOUNT . SINCE , THE BENEFIT OF SEC. 10BA IS NOT ALLOWABLE ON THIS AMOUNT IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA) , T HE ABOVE INCOME HAS BEEN UNDER ASSESSED AND TANTAMOUNT TO ESCAP E MENT OF INCOME WITHIN THE MEANING OF SEC. 147 READ WITH EXPLANATION (2) OF THE ACT. 4 . THE ASSESSEE CHALLENGED THE DECISION OF THE ASSESSING OFFICER BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS), WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT DUTY DRAWBACK WILL NOT FORM PART OF PROFIT FOR COMPUTATION OF DEDUCTION UNDER SEC. 10BA OF THE ACT. HE ORDERED ACCORDINGLY. 5. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ARGUED THAT THE ASSESSING OFFICER IN THE ASSESSMENT MADE UNDER SEC. 143(3) ON 29/12/2009 , HAS ALLOWED DEDUCTION UNDER SEC. 10BA ON DUTY DRAWBACK RECEIPTS OF RS. 18,07,331/ - AND THAT THE ORDER PASSED BY THE ASSE SSING OFFICER WAS AFTER THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA) . THE CONTENTION OF THE ASSESSEE IS THAT THE DECISION IN THE CASE OF LIBERTY INDIA (SUPRA) WAS RENDERED BY THE HON'BLE SUPREME COURT ON 31/08/2009 AND TH E ASSESSMENT UNDER SEC. 3 ITA NO. 23 / JODH /201 5 143(3) OF THE ACT WAS MADE ON 29/12/2009 WHICH WAS MUCH AFTER THE DATE OF RENDERING THE DECISION OF THE HON'BLE SUPREME COURT. THEREFORE, AS THERE IS NO CHANGE OF FACTS AND NO NEW TANGIBLE MATERIAL HAS COME TO THE NOTICE OF THE ASS ESSING OFFICER, THE REOPENING OF THE ASSESSMENT ON THE VERY SAME SET OF FACTS WAS CHANGE OF OPINION OF THE ASSESSING OFFICER AND THEREFORE, BAD IN LAW. 6. ON THE OTHER HAND , DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACT S OF THE CASE ARE THAT IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE, THE ASSESSEE HAS SHOWN DUTY DRAWBACK RE CEIPTS OF RS. 18,07,331/ - AND CLAIMED DEDUCTION UNDER SEC. 10BA ON THE SAME, WHICH WAS ALLOWED BY THE ASSESSING OFFICER IN AN ASSESSMENT MADE UNDER SEC. 143(3) ON 29/12/2009 . THE ASSESSING OFFICER HAS THEREAFTER REOPEN E D THE ASSESSMENT ON THE GROUND THAT THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA) HAS HELD THAT DEDUCTION UNDER SEC. 10BA IS NOT ALLOWA B LE TO THE ASSESSEE ON DUTY DRAWBACK RECEIPTS . THE ARGUMENT OF THE ASSESSEE BEFORE US IS THAT THE ASSESSMENT ORDER UNDER SEC. 143(3) WAS PA SSED BY THE ASSESSING OFFICER ON 29/12/2009 AND THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA) WAS RENDERED ON 31/08/2009 , T HUS, WHEN THE ASSESSMENT WAS MADE BY THE ASSESSING OFFICER, THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA) WAS AVAILABLE WITH HIM. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE HON'BLE DELHI HIGH COURT (FB) IN THE CASE OF CIT VS. USHA INTERNATI O NAL LTD . (253 CTR 113) HAS HELD AS UNDER: - THE ASSE SSMENT PROCEEDINGS CANNOT BE VALIDLY REOPEN ED UNDER S .147 EVEN WITHIN FOUR YEARS, I F AN ASSESSEE H A S FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERE NCE TO T HE INCOME ALLEGED TO HAVE ESCAPED AS SESS MENT, IF THE ORIGINAL ASSESSMENT WAS MADE U NDER S.143(3). SO LONG AS THE ASSESSEE HAS FURNISHED F ULL AND TRU E PARTICULARS AT THE TIME OF ORIGIN AL ASSESSME NT WIT H REFERENCE TO THE 4 ITA NO. 23 / JODH /201 5 INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT, IF THE ORIGINAL A SSESSMENT WAS MADE UNDER S. 14 3( 3) . SO LONG AS THE ASSESSEE HAS FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT AND SO LONG AS THE ASSESSMENT ORDER IS FRAMED UNDER S. 143(3), IT MATTERS LITTLE THAT THE AO DID NOT ASK ANY QUESTION OR QUERY WITH RESPECT TO ONE ENTR Y OR NOTE BUT HAD RAISED QUERIES AND QUESTIONS ON OTHER ASPECTS. SEC. 114(E) OF THE EVIDENCE ACT CAN BE APPLIED TO AN ASSESSMENT ORDER FRAMED UNDER S. 143(3) PROVIDED THAT THERE HAS BEEN A FULL AND TRUE DISCLOSURE OF ALL MATERIAL AND PRIMARY FACTS AT THE T IME OF ORIGINAL ASSESSMENT. IN SUCH A CASE IF THE ASSESSMENT IS REOPENED IN RESPECT OF A MATTER COVERED BY THE DISCLOSURE, IT WOULD AMOUNT TO CHANGE OF OPINION. IN A RECENT JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. ICICI SECURITIES PRIMARY DEALERSHIP LIMITED REPORTED IN 253 CTR 305. THE HON'BLE SUPREME COURT UPHELD THE ORDER OF BOMBAY HIGH COURT IN WRIT PETITION NO.1919 OF 2006 AND HELD THAT THE ASSESSEE HAD DISCLOSED FULL DETAILS IN THE RETURN OF INCOME IN THE MATTER OF ITS DEALING IN STOCK S AND SHARES. ACCORDING TO THE ASSESSEE, THE LOSS INCURRED WAS A BUSINESS LOSS, WHEREAS ACCORDING TO THE REVENUE, THE LOSS INCURRED WAS A SPECULATIVE LOSS. REJECTION OF THE OBJECTIONS OF THE ASSESSEE TO THE REOPENING OF THE ASSESSMENT BY THE AO VIDE HIS OR DER DATED 23RD JUNE, 2006 IS CLEARLY A CHANGE OF OPINION. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER REOPENING THE ASSESSMENT WAS NOT MAINTAINABLE. FROM THE ABOVE IT IS VERY CLEAR THAT ON ACCOUNT OF CHANGE OF OPINION THE BOMBAY HIGH COURT (UPH ELD BY SC) ALLOWED THE WRIT PETITION OF THE ASSESSEE ON ACCOUNT OF CHANGE OF OPINION AT THE STAGE OF DISPOSAL OF OBJECTIONS SUBMITTED BY THE ASSESSEE TO THE REASONS RECORDED. 8. IN VIEW OF THE FOREGOING REASONS, IN OUR CONSIDERED VIEW , THE REOPENING OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER IS BAD IN LAW . HENCE, WE ANNUL THE RE - ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON 11/11/2011 . 9. IN VIEW OF OUR DECISION IN GROUNDS NO. 1 TO 6 OF THE APPEAL OF THE ASSESSEE, THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERIT S HAVE BECOME INFRUCTUOUS AND ARE NOT BEING ADJUDICATED BY US. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON FRIDAY , THE 11 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 11 TH MARCH , 201 6 . 5 ITA NO. 23 / JODH /201 5 VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY I.T.A.T., JODHPUR .