M/s Om Prakash & Sons, Kapurthala V. The Dy Commissioner of Income Tax, Jalandhar

ITA 249/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0590 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISHRA
• Assessee Lawyers: J S BHASIN ADVOATE
• Keywords: Unexplained investment; Business income; Depreciation; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.249(ASR)/2016 ASSESSMENT YEAR:2008-09 PAN: AABFO2498R M/S. OM PARKASH & SONS, VS. DY. COMMR. OF INCOME T AX, KAPURTHALA. CIRCLE-IV, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN, ADVOATE RESPONDENT BY: SH. A.N. MISHRA, DR DATE OF HEARING: 22/06/2016 DATE OF PRONOUNCEMENT: 30/06/2016 ORDER PER A.D. JAIN, JM; THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2008-09, AGAINST THE ORDER, DATED 18.03.2016, PASSED BY THE LD. CIT( A)-1, JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE ORDER OF THE LD. CIT(A) SUSTAINING THE ASSESSMENT FRAMED BY THE A.O IS AGAINST THE LAW AND FACTS OF THE CASE . 2. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AN D FACTS OF THE CASE BY FAILING TO APPRECIATE THAT THE A.O HAD ERRONEOUS LY ASSUMED JURISDICTION U/S 147 OF THE ACT AND THEREIN FRAMED ASSESSMENT IN THE HANDS OF THE ASSESSEE FIRM U/SS. 143(3)/148 OF THE ACT. 3. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AN D FACTS OF THE CASE BY FAILING TO APPRECIATE THAT THE REASSESSMENT PRO CEEDINGS 2 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 INITIATED ON THE BASIS OF CHANGE OF OPINION BY TH E SUCCESSOR A.O, WHICH IS MERELY PROMPTED BY REAPPRAISAL OF THE FACT S ALREADY AVAILABLE ON RECORD, COULD NOT BE SUSTAINED IN TH E EYES OF LAW. 4. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AN D FACTS OF THE CASE IN OBSERVING THAT THE REASSESSMENT PROCEEDINGS HA D BEEN INITIATED BY THE A.O NOT ON THE BASIS OF A CHANGE OF OPINION, BUT RATHER ON THE BASIS OF A BELIEF THAT THE INCOME OF THE ASSESSEE FIRM HAS ESCAPED ASSESSMENT. 5. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND FACTS OF THE CASE BY LOOSING SIGHT OF THE JUDGMENTS OF THE HONBLE SU PREME COURT FURNISHED DURING THE COURSE OF THE APPELLATE PROCEE DINGS, WHEREIN IT WAS CONCLUDED THAT REASSESSMENT PROCEEDINGS CO ULD NOT BE INITIATED ON THE BASIS OF CHANGE OF OPINION. 6. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AN D FACTS OF THE CASE BY PROCEEDING WITH ON THE BASIS OF MISCONCEIVED FAC TS AND THEREIN CONCLUDING THAT THE AMOUNT SURRENDERED BY THE ASSES SEE FIRM DURING THE COURSE OF SURVEY PROCEEDINGS WAS NOT T O BE ASSESSED AS BUSINESS INCOME, BUT AS THE LATTERS UNEXPLAIN ED INCOME U/S 69A OF THE ACT. 7. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND FACTS OF THE CASE BY SUSTAINING THE ORDER OF THE A.O, WHEREIN THE LAT TER HAD DECLINED THE SET OFF OF LOSS OF RS. 11,28,380/- AS AGAINST THE SURRENDERED INCOME OF RS. 33 LAC OF THE ASSESSEE FIRM. 8. THAT THE LD. CIT(A) MISCONCEIVING THE SCOPE AND GAMUT OF THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF: KIM PHARMA (P) LTD. VS. CIT (2013) 258 CTR (P&H) 45 4, HAD THEREIN GRAVELY ERRED IN LAW AND FACTS OF THE CASE BY DRAWING ADVERSE INFERENCES IN THE HANDS OF THE ASSESSEE FIR M. 9. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND FACTS OF THE CASE BY UPHOLDING THE IMPROVING UPON OF THE IMPUGNED REASONS TO BELIEVE BY THE A.O, WHEREIN THE LATTER HAD JUSTIFI ED THE REASSESSMENT PROCEEDINGS BY REFERRING TO THE JUDG MENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF : KIM PHARMA (P) LTD. VS. CIT (2013) 258 CTR (P&H) 454, SPECIFICALLY WHEN NO SUCH REFERENCE OF THE SAID JUDGMENT WAS FOUND IN TH E REASONS TO BELIEVE. 10. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW A ND FACTS OF THE CASE IN FAILING TO APPRECIATE THAT THE REOPENING OF A CO NCLUDED 3 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 ASSESSMENT BY THE A.O, ON THE BASIS OF A SUBSEQUENT CONTRARY VIEW OF A NON JURISDICTIONAL HIGH COURT OR THAT OF A NON JURISDICTIONAL TRIBUNAL, ON THE BASIS OF REAPPRAISAL OF THE FACTS ALREADY AVAILABLE ON RECORD, CANNOT BE SUSTAINED IN THE EYES OF LAW . 11. ANY OTHER GROUND AS MAY BE ALLOWED TO BE RAISED AT THE TIME OF HEARING OF THE APPEAL. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF FERTILIZERS & GOOD S HANDLING, STORAGE & TRANSPORTATION HAD FILED ITS RETURN OF INCOME FOR T HE YEAR UNDER CONSIDERATION ON 18.09.2008 DECLARING THEREIN AN INCOME OF RS.21, 77,123/- WHICH WAS STATED TO BE PROCESSED UNDER SECTION 143(1) OF THE ACT AT THE SAME INCOME. IT HAD BEEN NOTICED THAT A SURVEY OPERATION UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE CASE OF THE ASSESSEE BY THE ASSESSING OFFICER O N 29.06.2007. DURING THE COURSE OF SURVEY, THE SURVEY TEAM HAD NOTICED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE INCOMPLETE AND ALSO NOTICED CERTAIN O THER DISCREPANCIES IN THE BOOKS OF ACCOUNT. SOME INCRIMINATING DOCUMENTS WERE ALSO FOUND DURING THE COURSE OF SURVEY, THE ENTRIES ON WHICH WERE NOT FOU ND TO BE REFLECTED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FIRM IN THE REGULAR COURSE OF BUSINESS. WHEN THE DISCREPANCIES NOTICED DURING SUR VEY OPERATION WERE CONFRONTED, THE PARTNERS OF THE ASSESSEE FIRM COULD NOT EXPLAIN THE DISCREPANCIES SATISFACTORILY AS POINTED OUT BY THE SURVEY TEAM. AS A RESULT OF DISCREPANCIES AS NOTICED BY THE SURVEY TEAM, THE AS SESSEE CAME FORWARD TO SURRENDER A SUM OF RS.33,00,000/- FOR TAX DURING A. Y. 2008-09 IN ADDITION TO ITS NORMAL INCOME, THE DETAILS OF WHICH IS AS UNDER :- 4 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 SR. NO. PARTICULAR OF INCOME SURRENDERED AMOUNT SURRENDERED 1 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BUILDING RS.25,00,000/- 2 ON ACCOUNT OF UNEXPLAINED DISCREPANCY IN CASH RS.8,00,000/- TOTAL RS.33,00,000/- IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE AS SESSEE DECLARED TOTAL INCOME IN THE RETURN AT RS.21,71,720/- WHICH INCLUDED SURR ENDERED INCOME OF RS.33,00,000/- WHICH HAD BEEN DISCLOSED BY THE ASSE SSEE FIRM DURING THE COURSE OF SURVEY. IT WAS FURTHER NOTICED THAT THE A SSESSEE HAD CREDITED THE SURRENDERED INCOME TO THE PROFIT AND LOSS ACCOUNT B Y TREATING IT AS BUSINESS INCOME AND SET OFF THE CURRENT YEARS BUSINESS LOSS AGAINST THIS INCOME. IT WAS AGAIN NOTICED THAT AS A RESULT OF SET OFF OF CURREN T YEAR'S BUSINESS LOSS AGAINST SURRENDERED INCOME, THE NET TAXABLE INCOME WAS DEC LARED AT RS.21,71,720/-. THE ASSESSMENT IN THIS CASE WAS ORIGINALLY COMPLETE D BY THE ASSESSING OFFICER VIDE ORDER UNDER SECTION 143(3) OF THE ACT DATED 21 .05.2010 AT AN ASSESSED INCOME OF RS.21,71,720/-, I.E., AT THE RETURNED INC OME. IN OTHER WORDS, RETURNED INCOME HAD BEEN ACCEPTED AS SUCH AND THE A SSESSING OFFICER ALLOWED SET OFF OF BUSINESS LOSS OF THE YEAR UNDER CONSIDER ATION AGAINST SURRENDERED INCOME OF RS.33,00,000/-. 5 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 2.1 LATER ON, THE ASSESSMENT IN THE CASE OF ASSESS EE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUE OF NOTICE UNDER SEC TION 148 OF THE ACT DATED 20.03.2013 ON THE GROUND THAT THE THEN ASSESSING OF FICER HAD INCORRECTLY ALLOWED SET OFF OF CURRENT YEARS BUSINESS LOSS AGA INST SURRENDERED INCOME WHICH WAS STATED TO BE TAXABLE UNDER SECTION 69/69A OF THE ACT. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE F IRM AGAIN FILED ITS RETURN OF INCOME DECLARING THEREIN SAME INCOME WHICH WAS DECL ARED IN THE ORIGINAL RETURN OF INCOME. IN VIEW OF THE ASSESSING OFFICER, THE ASSESSEE WAS NOT ENTITLED TO SET OFF OF CURRENT YEARS BUSINESS LOSS AGAINST SURRENDERED INCOME OF RS.33,00,000/- AS THE SAME CANNOT BE TREATED AS BUS INESS INCOME AND HAD TO BE ASSESSED UNDER DEEMING PROVISIONS OF SECTION 69A OF THE ACT. THE ASSESSING OFFICER, THEREFORE, DENIED THE SET OFF OF CURRENT Y EARS BUSINESS LOSS TO THE ASSESSEE AGAINST SURRENDERED INCOME. WHILE DOING SO , THE ASSESSING OFFICER HAS RELIED ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S KIM PHARMA (P) LIMITED DATED 27.04.2011. THE RE ASSESSMENT IN THIS CASE WAS ULTIMATELY COMPLETED BY THE ASSESSING OFFICER V IDE ORDER UNDER SECTION 143(3) OF THE ACT DATED 30.03.2014 AT AN ASSESSED I NCOME OF RS.33,00,000/-. WHILE COMPLETING, THE ASSESSMENT, THE ASSESSING OFF ICER HAD DISALLOWED THE SET OFF OF CURRENT YEARS BUSINESS LOSS CLAIMED BY THE ASSESSEE AGAINST SURRENDERED INCOME OF RS.33,00,000/-. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. 6 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 4. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT IN THE ASSESSMENT ORDER DATED 21.05.2010, PASSED U/S 143(3) OF THE AC T, THE AO ACCEPTED THE RETURNED INCOME OF THE ASSESSEE; THAT WHILE DOING S O, THE AO DULY TOOK INTO CONSIDERATION A DISCLOSURE OF RS.33 LACS MADE BY TH E ASSESSEE FIRM DURING THE SURVEY CONDUCTED ON 29.06.2007 ON THE BUSINESS PREM ISES OF THE ASSESSEE, AS CREDITED IN THE PROFIT & LOSS ACCOUNT, AS WELL AS T HE BUSINESS LOSS SUFFERED BY THE ASSESSEE DURING THE YEAR, ON THE BASIS OF WHICH IT WAS, THAT THE RETURNED INCOME WAS REFLECTED BY THE ASSESSEE AT RS.21,77,62 0/-; THAT THE NOTICE DATED 20.03.2013, ISSUED UNDER SECTION 148 OF THE ACT, WA S PASSED ON THE SAME FACTS, WITHOUT ANY FRESH MATERIAL HAVING BEEN BROUG HT ON RECORD, THUS, REVIEWING THE CASE ON THE PREMISE THAT SET OFF OF S URRENDERED INCOME ALLOWED AGAINST NORMAL INCOME/LOSS INCURRED DURING THE YEAR , WAS IN CONTRAVENTION OF THE DECISION OF THE HONBLE GUJRAT HIGH COURT, IN T HE CASE OF FAKIR MOHAMMAD HAJI HASAN VS. CIT, 247 ITR 290 (GUJ.) FOLLOWED BY THE ITAT CHANDIGARH BENCH IN KIM PHARMA (P) LTD., IN ITA NO.189/CHD/20 10, DATED 30.04.2010; THAT THUS, THE INITIATION OF THE REASSESSMENT PROCE EDING WAS AN OBVIOUS CASE OF CHANGE OF OPINION, WHICH IS NOT SUSTAINABLE IN LAW; THAT VIDE ORDER DATED 30.03.2014, THE AO WRONGLY CALCULATED THAT THE AMOU NT OF RS.33 LACS SURRENDERED BY THE ASSESSEE FIRM COULD NOT BE SET O FF AGAINST THE BUSINESS LOSSES, WHICH WAS UNDISPUTEDLY SUFFERED BY THE ASS ESSEE FIRM DURING THE YEAR UNDER CONSIDERATION; THAT, THEREFORE, THE REASSESSM ENT OF THE ASSESSEES INCOME MADE AT RS.33 LACS, BY DISALLOWING THE SET OFF OF BUSINESS LOSS OF RS.11,28,380/-, AS UPHELD BY THE LD. CIT(A) IS UNSU STAINABLE IN LAW. 7 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 5. THE LD. DR, ON THE OTHER HAND, STRONGLY RELIED O N THE IMPUGNED ORDER. 6. IN THIS REGARD, THE LD. CIT(A) HAS HELD AS FOLLO WS: 6.2. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER MADE BY HIM IN THE REASSESSMENT ORDER. I HAVE ALSO CONSI DERED RELEVANT PARAS OF STATEMENT OF FACTS RELIED UPON BY THE ASSESSEE. I H AVE FURTHER CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LD. ARS OF THE ASSESSEE AS WELL AS OTHER MATERIAL BROUGHT BY THE A SSESSEE ON RECORD. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I A M OF THE OPINION THAT THEASSESSING OFFICER WAS HAVING A PRIMA FACIE REASO N TO BELIEVE THAT THE INCOME OF THE ASSESSEE TO THE EXTENT OF BUSINESS LO SS WHICH HAS BEEN ALLOWED TO BE SET OFF AGAINST SURRENDERED INCOME HA S ESCAPED INCOME. IT HAS ALSO BEEN NOTICED THAT THE ASSESSMENT HAS ALSO BEEN REOPENED WITHIN A PERIOD OF FOUR YEARS AND AS SUCH REOPENING CANNOT BE SAID TO BE INVALID. I AM ALSO OF THE OPINION THAT THE ASSESSMENT HAS NOT BEEN REOPENED IN THIS CASE ON THE BASIS OF CHANGE OF OPINION RATHER THE A SSESSING OFFICER WAS HAVING A FIRM BELIEF THAT THE INCOME OF THE ASSESSE E HAS ESCAPED ASSESSMENT. THE VIEW POINT OF THE ASSESSING OFFICER WAS ALSO SUPPORTED BY DECISION OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF M/S FAKIR MOHMED HAJI HASAN REPORTED AT 247 ITR 290 (GUJ) AND ALSO BY THE DECISION OF HONOURABLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S KIM PHARMA. I AM FURTHER OF THE OPINION THAT THE JU DICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE ARE DISTINGUISHABLE ON FACTS AND HAVE NO APPLICATION IN THE CASE OF THE ASSESSEE. UNDER SUCH CIRCUMSTANCES, THE ACTION OF THE ASSESSING OFFICER IN REOPENING THE AS SESSMENT IN THE CASE OF THE ASSESSEE CANNOT BE SAID TO BE UNJUSTIFIED. 6.3. IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICE R IS FULLY JUSTIFIED IN REOPENING THE ASSESSMENT IN THIS CASE. IN THE RESUL T, GROUNDS NO. 2, 3, 4, 5, 6, 7 AND 8 OF APPEAL TAKEN BY THE ASSESSEE ARE DISM ISSED. 7. HAVING HEARD THE RIVAL CONTENTIONS ON THIS ISSUE IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE FIND THAT THE FOLLOWI NG REASONS (APB-12) WERE RECORDED FOR REOPENING THE COMPLETED ASSESSMENT OF THE ASSESSEE: 8 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 REASONS FOR ISSUE OF NOTICE U/S 148 OF THE I.T.ACT . 1961 THE FACTS OF THE CASE, IN BRIEF ARE THAT THE ASSESS EE FILED ITS RETURN OF INCOME ON 10.09.2008 FOR THE ASSESSMENT YEAR 2008-0 9 DECLARING INCOME OF RS. 21,71,620/-. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF FERTILIZER & GOODS HANDLING, STORAGE & TRANSPORTATI ON. BRIEF FACTS OF THE CASE ARE SURVEY U/S 133-A WAS CONDUCTED AT THE BUSI NESS PREMISES OF THE ASSESSEE ON 28/29.06.2007 AND ASSESSEE SURRENDERED THE ADDITIONAL INCOME OF RS. 33,00,000/- AS UNDER:- RS. 25,00,000/- ON ACCOUNT OF BUILDING RS. 8,00,000/- ON ACCOUNT OF CASH IN HAND. THE ASSESSEE WAS ALLOWED TO SET OFF HIS SURRENDERED INCOME WITH THE NORMAL INCOME/LOSS INCURRED DURING THE YEAR. THIS H AS BEEN DONE IN CONTRAVENTION OF HONBLE GUJRAT HIGH COURT IN THE C ASE OF FAKIR MOHMAD HAJI HASAN VS. COMMISSIONER OF INCOME TAX 247 ITR 2 90 AND CHANDIGARH ITAT ORDER IN KIM PHARMA (P) LTD. IN ITA NO. 189/CH D/2010 ORDER DATED 30.04.2010. THEREFORE, I HAVE REASONS TO BELIEF THAT THE INCOME TO THE TUNE OF RS.11,28,380/- ADJUSTED U/S 70 & 71 OFTHE INCOME T AX ACT, 1961 WITHIN THE MEANING OF EXPLANATION 2(B) APPENDED TO SECTION 147 OF THE INCOME TAX ACT,1961. THEREFORE, INCOME TO THE EXTEND OF RS. 11 ,28,380/- HAS ESCAPED ASSESSMENT FOR THE ASSTT. YEAR 2008-09. ACCORDINGLY , NOTICE U/S 148 IS TO BE ISSUED. DATED:-20.03.2013 SD/- (SHRI RAJ SINGH) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-IV, JALANDHAR. 8. IN THE ORIGINAL ASSESSMENT, THE OBSERVATIONS MAD E BY THE AO IN THE ORDER PASSED ON 25.05.2010 (APB 11) ARE AS FOLLOWED: 2. AT THE TIME OF SURVEY ASSESSEE OFFERED RS. 33 L AKH AS ADDITIONAL INCOME OVER AND ABOVE THE NORMAL BOOK RE SULTS. THE RETURNED INCOME INCLUDES OTHER INCOME OF RS.1449850 .76 AFTER NETTING THE OTHER INCOME, THE ASSESSEE WAS ASKED TO EXPLAIN THE DECLARATION OF TAXABLE INCOME TO BE LESS THAN THE D ECLARED INCOME OF 9 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 RS. 33 LAKH BY RS. 1128380/- AND ALSO THE LOSS FROM TRADING RESULTS AS PER QUERY NO. 2 OF THE QUESTIONNAIRE DATED 7:4.2 010. ASSESSEE FURNISHED ITS REPLY ON 22.4.2,010 IN PARA-2 OF THE REPLY. ASSESSEE EXPLAINED THAT SALE OF FERTILIZERS FOR THE YEAR UND ER ASSESSMENT IS ONLY RS. 19148020/- AS COMPARED TO SALE OF RS. 4,03 ,49,932 FOR THE PRECEDING ASSESSMENT YEAR. SALE IS, THEREFORE, LESS BY RS. 2 , 12,01,912/-. G.P RATIO FOR THE YEAR UNDER ASSESSMEN T IS (-) 0.028% AND THIS ALONE RESULTED IN TRANSFER OF LOSS TO PROF IT AND LOSS ACCOUNT BY RS. 5363/-. HOWEVER, G.P. RATIO W.R.T. SALES PLU S HANDLING AND TRANSPORTATION CHARGES ETC FORMING OTHER INCOME OF RS. 1499850.76 IS 5.06% AS COMPARED TO 3.45% FOR THE PRECEDING YEAR. OTHER INCOME COMPRISES THE INCENTIVES GIVEN BY PRINCIPALS TO THE ASSESSEE TO STAY IN MARKET. ON THE ISSUE OF G.P. DECLINE ASSESSEE SU BMITTED THAT STOCK REGISTERS ARE MAINTAINED AND IT DOES NOT CALL FOR A NY ADVERSE VIEW. 2.1. ASSESSEE FURTHER STATED THAT IN THE PRECEDING ASSESSMENT YEAR ALSO AGAINST OTHER INCOME OF RS. 273447/-+ G.P. OF RS. 447284 ET PROFIT WAS ONLY RS. 2,40,381/- WHICH MEANS THAT DUR ING THE PRECEDING YEAR ALSO ASSESSEE SUFFERED TRADING LOSS AND THE NET PROFIT OF RS. 2,40,381 WAS ONLY OUT OF OTHER INCOME OF HAN DLING AND TRANSPORTATION CHARGES IN THE FORM OF INCENTIVES BY THE PRINCIPALS. 2.2 ASSESSEE FURTHER SUBMITTED THAT IT WAS THE SECO ND YEAR OF THE START OF THE BUSINESS AT JALANDHAR AND INTEREST OF RS. 1102168/- WAS PAID ON DEPOSITS AND CLAIMED THE EXPENSES WHERE AS DURING THE PRECEDING ASSESSMENT YEAR NO INTEREST ON DEPOSITS W AS CLAIMED. DEPRECIATION CLAIMED DURING THE YEAR IS AT RS. 6,87 ,733/- AS AGAINST RS.349070/- FOR THE PRECEDING ASSESSMENT YEAR. G.P. SALES RATIO FOR THE PRECEDING A.Y. IS 1.11% AND G.P. WAS AT RS. 447 284. FOR THE YEAR UNDER ASSESSMENT THERE IS A LOSS OF 0.028% AND IN COMPARISON TO PRECEDING A.Y. G.P. RATIO COMES (-) 1.138 AND IT RESULTED IN TRANSFER OF LOSS OF RS. 217904 TO THE PROFIT AND LOSS ACCOUN T. ASSESSEE IN ITS BID TO ESTABLISH AT JALANDHAR DURING THE YEAR UNDER ASSESSMENT SOLD ITS GOODS AT LESS PRICES THAN THE PURCHASE PRICES ( LEAVES 36 TO 41L OF THE REPLY FILED ON 22.04.10 ARE BILLS OF PURCHASE A ND SALE). THE RECEIPT OF RS. 1449850.76 IN THE SHAPE OF INCENTIVE WAS GIVEN BY THE PRINCIPALS. HOWEVER, DURING THE YEAR UNDER ASSESSME NT NO INTEREST WAS PAID TO PARTNERS ON THEIR CAPITA! ACCOUNT. EXPL ANATION OFFERED BY THE ASSESSEE APPEARS TO BE REASONABLE AND DOES NOT CALL FOR ANY ADVERSE VIEW. INCOME RETURNED BY THE ASSESSEE IS AC CEPTED. 9. IT IS, THUS, THAT THE ASSESSEE IS CORRECT IN CON TENDING THAT THE ORIGINAL SCRUTINY ASSESSMENT ORDER WAS PASSED BY THE AO AFTE R DULY TAKING INTO 10 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 CONSIDERATION ALL THE FACTS OF THE CASE, THE MATERI AL ON RECORD, THE CONTENTION MADE BY THE ASSESSEE AND THE APPLICABILITY OF THE P ROVISIONS OF LAW. THE DISCLOSURE OF RS. 33 LACS MADE BY THE ASSESSEE DURI NG THE SURVEY, AS CREDITED IN THE PROFIT & LOSS ACCOUNT, AS BUSINESS INCOME, WAS CLEARLY TAKEN INTO CONSIDERATION. THE BUSINESS LOSS SUFFERED BY THE AS SESSEE WAS ALSO KEPT IN MIND AND IT WAS ON THIS BASIS THAT THE RETURNED INC OME WAS ACCEPTED. 10. A PERUSAL OF THE REASONS RECORDED FOR REOPENING THE COMPLETED ASSESSMENT OF THE ASSESSEE EVINCE THAT NO FRESH MAT ERIAL WAS IN POSSESSION OF THE AO WHILE RECORDING THE SAID REASONS. 11. EVEN THE LD. CIT(A) HAS ACKNOWLEDGED THE FACTUM OF THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P) LTD. VS. CIT, 258 CTR (P&H) 454, THOUGH PERCEIVED TO GO AGA INST THE ASSESSEE. STILL, THE LD. CIT(A) HOLDS, WRONGLY, THAT THOUGH IT WAS A CAS E OF A MERE CHANGE OF OPINION WHILE REOPENING THE COMPLETED ASSESSMENT. 12. NOW, IT IS TRITE THAT REASSESSMENT PROCEEDINGS CANNOT BE RESORTED TO IN ORDER TO REVIEW A COMPLETED ASSESSMENT, ON A MERE CHANGE OF OPINION. LEGAL SUPPORT IN THIS REGARD COMES FROM, INTER-ALIA, CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 (SC) AND CIT VS. ITW INDIA LTD., 126 ITR 429 (P&H). 13. FOR THE ABOVE DISCUSSION, THE VERY REOPENING OF THE COMPLETED ASSESSMENT OF THE ASSESSEE IS HELD TO BE INVALID. C ONSEQUENTLY, ALL THE 11 ITA NO.249(ASR)/2016 ASSESSMENT YEAR 2008-09 PROCEEDINGS PURSUANT THERETO CULMINATING IN THE IMP UGNED ORDER ARE ALSO QUASHED. NOTHING ELSE SURVIVES FOR ADJUDICATION. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH J UNE, 2016. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/06/2016. /SKR/ COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE:M/S. OM PARKASH & SONS, KAPURT HALA. (2) THE DCIT, CIRCLE IV, JALANDHAR. (3) THE CIT(A), JLR (4) THE CIT, JLR (5) THE SR DR, I.T.A.T. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.