KORES (INDIA) LTD, MUMBAI V. ACIT CEN CIR 41, MUMBAI

ITA 2513/MUM/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0426 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Reopening of assessment; Business income; Search and seizure; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 43B; 143(3); 142(1); 153A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS. 2512 & 2513/MUM/2014 (ASSESSMENT YEARS: 2006-07 & 2007-08) M/S. KORES (INDIA) LTD. 301/302 ASHFORD CHAMBERS L.J. ROAD, MAHIN WEST MUMBAI 400016 VS. ACIT, CENTRAL CIRCLE - 41 MUMBAI PAN AAACK5069Q APPELLANT RESPONDENT APPELLANT BY: SHRI MANI JAIN RESPONDENT BY: SHRI RAJESH KUMAR YADAV DATE OF HEARING: 10.01.2018 DATE OF PRONOUNCEMENT: 13.02.2018 O R D E R PER RAJESH KUMAR, AM THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THE ORDERS OF THE CIT(A)-38, MUMBAI DATED 29.01.2014 AND 30.01.20 14 FOR ASSESSMENT YEARS 2006-07 AND 2007-08 RESPECTIVELY. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLA NT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F A.O. IN RE- OPENING THE ASSESSMENT U/S 147 OF THE INCOME TAX AC T, 1961 BY EXTRACTING THE REASONS FROM THE RECORDS WHICH HAVE BEEN DULY DISCLOSED BY THE APPELLANT IN THE RETURN OF INCOME OR FINANCIAL STATEMENTS FILED DURING THE COURSE OF ASSESSMENT PR OCEEDINGS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLA NT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F A.O. IN PASSING THE IMPUGNED ORDER WHICH IS ILLEGAL OR OTHE RWISE VOID FOR THE WANT OF JURISDICTION. 3. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLAN T'S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F A.O. OF DISALLOWING A SUM OF RS. 31,37,000/- ON ACCOUNT OF MANUFACTURING AND OTHER EXPENSES CLAIMED BY THE APP ELLANT. ITA NOS. 2512 & 2513/MUM/2014 M/S. KORES (INDIA) LTD. 2 4. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLA NT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F A.O. OF DISALLOWING A SUM OF RS. 1,80,437/- BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961. 5. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLA NT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F A.O. OF DISALLOWING A SUM OF RS. 3,91,653/- BY INVOKING THE PROVISIONS OF SECTION 43B OF THE INCOME TAX ACT, 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TAX ACT (HEREINAFTER THE ACT) ON 22.12.2008 DETERMINING THE TOTAL INCOME AT ` 18,90,05,530/-. THEREAFTER THE CASE OF THE ASSESSEE WAS REOPENED UN DER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 DATED 15.03 .2011 BY RECORDING THE FOLLOWING REASONS: - ON VERIFICATION OF RECORDS, IT WAS OBSERVED THAT A N AMOUNT OF RS.31,37,000/- BEING CHARITY AND DONATIONS DEBITED IN P & L ACCOUNT UNDER THE HEAD MANUFACTURING AND OTHER EXPENSES IN SCHEDULE T. HOWEVER, DISALLOWANCE OF RS.15,84,648/- ONLY WAS MA DE IN THE COMPUTATION OF INCOME. THE BALANCE AMOUNT OF RS.15, 52,352/- NEEDS TO BE DISALLOWED. PROVISIONS FOR GRATUITY SHOWN IN SCHEDULE U OF P & L ACCOUNT AT RS.1,62,10,000/-, HOWEVER, THE DISALLOWANCE OF RS.1 ,58,18,347/- ONLY WAS MADE TO THE TOTAL INCOME. THE BALANCE AMOU NT OF RS.3,91,653/- NEED TO BE DISALLOWED. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT THE ASSESSEE FILED RETURN OF INCOME ON 27.04.2011 DECLARING TOTA L INCOME AT ` 14,51,63,125/-. SUBSEQUENTLY NOTICES UNDER SECTIONS 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE. AS REGARD S INCOME ESCAPED OF ` 31,37,000/-, THE AO OBSERVED FROM THE DETAILS FILE D BY THE ASSESSEE THAT THE SAID AMOUNT WAS SHOWN UNDER THE HEAD MANUFACTU RING THE OTHER EXPENSES AS CHARITY AND DONATION WHICH DID NOT PERTAIN TO THE BUSINESS OF THE ASSESSEE AND THEREFORE NOT INCURRED FOR THE PURPOSE OF BUSINESS AND ACCORDINGLY WAS DISALLOWED. AS REGARDS ` 1,80,437/- THE AO NOTED THAT THE SAID EXPENSES WERE NOT ALLOWABLE AS PER TAX AUDIT R EPORT. HOWEVER, THE ASSESSEE DID NOT DISALLOW THESE EXPENSES SUO MOTTO IN THE COMPUTATION OF INCOME. AFTER CONFRONTING THE ISSUE WITH THE ASSESS EE, THE AO ADDED THE ITA NOS. 2512 & 2513/MUM/2014 M/S. KORES (INDIA) LTD. 3 SAME UNDER SECTION 40(A)(IA) OF THE ACT ON THE GROU ND THAT THE ASSESSEE DID NOT OBJECT TO THE DISALLOWANCE. ON THE ISSUE OF PRO VISION FOR GRATUITY, THE ASSESSEE HAS MADE A PROVISION OF ` 1,62,10,000/- FOR GRATUITY DURING THE YEAR AND SUO MOTO DISALLOWED AN AMOUNT OF ` 1,58,18,347/-. ACCORDING TO THE AO THE SAID PROVISION IS NOT AN ALLOWABLE EXPEN SES UNDER SECTION 43B(B) OF THE ACT. THEREFORE HE ADDED THE DIFFERENC E BETWEEN THE SAID TWO AMOUNTS OF ` 3,91,653/- TO THE INCOME OF THE ASSESSEE AND FINALL Y ASSESSED THE INCOME AT ` 19,12,88,617/- BY FRAMING THE ASSESSMENT UNDER SECT ION 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DATED 24.11 .2011. ASSESSEE CHALLENGED THE REOPENING OF ASSESSMENT BEFORE THE F IRST APPELLATE AUTHORITY BY SUBMITTING THAT REOPENING WAS BASED UP ON CHANGE OF OPINION ON THE SAME FACTS WHICH WERE ALREADY AVAILABLE IN T HE ASSESSMENT RECORD. BY RELYING ON VARIOUS DECISIONS AS CITED BY THE CIT (A) IN PARA 4.2 OF HIS ORDER, THE CIT(A) DISMISSED THE APPEAL OF THE ASSES SEE BY OBSERVING AND HOLDING AS UNDER: - 5.0 I HAVE CAREFULLY EXAMINED THE FACTS OF THE CA SE, THE STAND TAKEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, T HE GROUNDS OF APPEAL AND THE WRITTEN SUBMISSIONS FILED BY THE APP ELLANT DURING THE APPEAL PROCEEDINGS. 5.1 THE ISSUE FOR WHICH THE ASSESSMENT IS RE-OPENED HAVE NOT BEEN EXAMINED BY THE ASSESSING OFFICER DURING THE ORIGIN AL ASSESSMENT. THE APPELLANT CONTENDS THAT THE REOPENING OF THE AS SESSMENT BY THE A.O IS BASED ON MERE CHANGE OF OPINION AND IT IS BA D IN LAW AND THE SAME REQUIRES TO BE QUASHED. IT IS TRUE THAT NO ASS ESSMENT CAN BE REOPENED BY MERE CHANGE OF OPINION. DURING THE COUR SE OF APPEAL PROCEEDINGS, THE APPELLANT PRODUCED A QUESTIONNAIRE ISSUED BY A.O. IN SUPPORT OF ITS CONTENTION THAT THE ISSUES UNDER DIS PUTE HAVE ALREADY BEEN EXAMINED BY THE A.O. I HAVE EXAMINED THE QUEST IONNAIRE ISSUED BY THE A.O AND I FIND THAT THE QUESTIONNAIRE ISSUED IS VERY GENERAL AND IS NOT VERY SPECIFIC TO ANY ISSUE AT HAND. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. INFOSYS TECHNOLOG IES LTD. (341 ITR 293), IN A CASE INVOLVING 263 PROCEEDINGS HELD THAT UNTIL OTHERWISE THE A.O GIVES SPECIFIC REASONS FOR ANY FINDING OR CONCL USION, IT WOULD NOT CONSTRUE THAT THERE WAS AN APPLICATION OF MIND BY T HE A.O. THE RELEVANT PORTION OF THE DECISION IS REPRODUCED HERE IN UNDER: 'WE ARE ALSO NOT IN A POSITION TO ACCEPT THE SUBMIS SION THAT THE MATERIALS HAD BEEN PLACED BEFORE THE ASSESSING AUTH ORITY AND, THEREFORE, THERE SHOULD BE A CONCLUSION THAT THE AU THORITY HAS ITA NOS. 2512 & 2513/MUM/2014 M/S. KORES (INDIA) LTD. 4 APPLIED HIS MIND TO THE SAME AND THERE WAS NO QUEST ION OF THE COMMISSIONER INTERFERING BY TAKING A DIFFERENT VIEW , ETC. THE ASSESSING AUTHORITY PERFORMS A QUASI-JUDICIAL F UNCTION AND THE REASONS FOR HIS CONCLUSIONS AND FINDINGS SHOULD BE FORTHCOMING IN THE ASSESSMENT ORDER. THOUGH IT IS U RGED ON BEHALF OF THE ASSESSEE BY ITS LEARNED COUNSEL THAT REASONS SHOULD BE SPELT OUT ONLY IN A SITUATION WHERE THE A SSESSING AUTHORITY PASSES AN ORDER AGAINST THE ASSESSEE OR A DVERSE TO THE INTERESTS OF THE ASSESSEE AND NO NEED FOR THE ASSES SING AUTHORITY TO SPELL OUT REASONS WHEN THE ORDER IS ACCEPTING TH E CLAIM OF THE ASSESSEE AND THE LEARNED COUNSEL SUBMIT THAT THIS I S THE LEGAL POSITION ON AUTHORITY, WE ARE AFRAID THAT TO ACCEPT A SUBMISSION OF THIS NATURE WOULD BE TO GIVE A FREE HAND TO THE ASSESSING AUTHORITY, JUST TO PASS ORDERS WITHOUT REASONING AN D TO SPELL OUT REASONS ONLY IN A SITUATION WHERE THE FINDING IS TO BE AGAINST THE ASSESSEE OR ANY CLAIM PUT FORTH BY THE ASSESSEE IS DENIED. WE ARE OF THE CLEAR OPINION THAT THERE CANNOT BE AN Y DICHOTOMY OF THIS NATURE AS EVERY CONCLUSION AND FINDING BY THE ASSESSING AUTHORITY SHOULD BE SUPPORTED BY REASONS, HOWEVER B RIEF IT MAY BE, AND IN A SITUATION WHERE IT IS ONLY A QUESTION OF COMPUTATION IN ACCORDANCE WITH THE RELEVANT ARTICLES OF A DOUBL E TAXATION AVOIDANCE AGREEMENT AND THAT SHOULD BE CLEARLY INDI CATED IN THE ORDER OF THE ASSESSING AUTHORITY, WHETHER OR NOT TH E ASSESSEE HAD GIVEN PARTICULARS OR DETAILS OF IT. IT IS THE D UTY OF THE ASSESSING AUTHORITY TO DO THAT AND IF THE ASSESSING AUTHORITY HAD FAILED IN THAT, MORE SO IN EXTENDING A TAX RELIEF T O THE ASSESSEE, THE ORDER DEFINITELY CONSTITUTES AN ORDER NOT MEREL Y ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE AN D THEREFORE, WHILE THE COMMISSIONER WAS JUSTIFIED IN EXERCISING THE JURISDICTION UNDER SECTION 263 OF THE ACT, THE TRIB UNAL WAS DEFINITELY NOT JUSTIFIED IN INTERFERING WITH THIS O RDER OF THE COMMISSIONER IN ITS APPELLATE JURISDICTION.' 5.2 SINCE IN THE CASE OF THE APPELLANT NOTHING CAME TO LIGHT ESTABLISHING APPLICATION OF MIND BY THE A.O. ON THE ISSUES UNDER DISPUTE IN THE ORIGINAL ASSESSMENT PROCEEDINGS, RE- ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT DO NOT SUFFER ANY IN FIRMITY. ACCORDINGLY, THE GROUND OF APPEAL FILED BY THE APPE LLANT IS HEREBY DISMISSED. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED A.R. OF THE ASSESSEE VEHEMENTLY SUBMIT TED BEFORE US THAT THE ORDER PASSED BY THE CIT(A) IS AGAINST FACT S AND LAW OF THE CASE AND THEREFORE SHOULD BE REVERSED AS THE VERY REOPENING PROCEEDINGS WERE NOT VALIDLY DONE BY THE AO. THE LEARNED A.R. SUBMITTED THAT THE ENTIRE ITA NOS. 2512 & 2513/MUM/2014 M/S. KORES (INDIA) LTD. 5 REASSESSMENT PROCEEDINGS WERE BASED UPON THE INFORM ATION AND RECORDS WHICH WERE AVAILABLE BEFORE THE AO AT THE TIME OF O RIGINAL ASSESSMENT AND THE AO AFTER RE-EXAMINATION OF THE SAME FORMED A BE LIEF THAT THE INCOME HAS ESCAPED ASSESSMENT. THUS THE RE-OPENING OF ASSE SSMENT BY THE AO IS A PATENT EXAMPLE OF CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER THE ACT. THE LEARNED A.R. ALSO SUBMITTED THAT ALL THE T HREE ADDITIONS, NAMELY, DONATION AND CHARITY OF ` 31,37,000/-, DISALLOWANCE UNDER SECTION 40(A)(IA) OF ` 1,80,437/- AND DISALLOWANCE ON ACCOUNT OF PROVISION FOR GRATUITY OF ` 3,91,653/- BEING THE DIFFERENCE BETWEEN THE TOTAL AMOUNT OF PROVISION FOR GRATUITY CREDITED DURING THE YEAR AND THE SUO MOTO DISALLOWANCE MADE BY THE ASSESSEE WERE BASED UPON THE RECORDS WHICH WERE AVAILABLE BEFORE THE AO AT THE TIME OF ASSESSMENT FRAMED UNDER SECTION 1 43(3) R.W.S. 153A OF THE ACT. THE LEARNED A.R. TOOK US TO THE STATEMENT OF COMPUTATION OF TOTAL BUSINESS INCOME, COPY OF WHICH IS AVAILABLE AT PAGE 1 OF THE PAPER BOOK, WHICH CLEARLY SHOWED THAT THE ASSESSEE HAS MADE DIS ALLOWANCE ON ACCOUNT OF GRATUITY OF ` 1,58,18,347/-, STATUTORY DISALLOWANCE UNDER SECTION 43B OF ` 1,11,44,023/- AND CHARITY AND DONATIONS OF ` 15,84,648/-. THE LEARNED A.R. FURTHER REFERRED TO PARA 4 OF THE ASSESSMENT O RDER PASSED UNDER SECTION 143(3) R.W.S. 153A DATED 22.12.2008 WHEREIN THE AO HAS MENTIONED THAT DETAILS OF PURCHASE, DETAILS OF MAJO R EXPENSES, DETAILS OF ADDITION TO FIXED ASSETS, CONFIRMATIONS FROM NEW DE POSITORS, DETAILS OF TDS MADE AND DETAILS OF FLATS SOLD WERE CALLED FOR EXAM INATION. THE LEARNED A.R. DREW OUR ATTENTION TO PARA 27 OF THE SAID ASSESSMEN T ORDER WHICH IS PLACED AT PAGE 16 OF THE PAPER BOOK WHICH COMMENCED WITH T HE WORDS ON VERIFICATION OF COMPUTATION INCOME, IT IS SEEN THAT ...... WHICH SHOWS THAT THE AO HAS EXAMINED THE STATEMENT OF TOTAL INCOME I N THE ORIGINAL ASSESSMENT PROCEEDINGS AND IN PARA 31 AT PAGE 17 OF THE PAPER BOOK THE AO FURTHER STATED THAT AN AMOUNT OF ` 1,11,44,023/- WAS OUTSTANDING UNDER SECTION 43B OF THE ACT ON THE DATE OF AUDIT A S STATED IN TAX AUDIT REPORT FORM 3CD CLAUSE NO. 21(1)(B). THE LEARNED A .R. SUBMITTED THAT THE AO HAS REVIEWED HIS OWN ORDER BY REOPENING THE ALRE ADY CONCLUDED ASSESSMENT ON THE BASIS OF INFORMATION AND RECORDS WHICH WERE AVAILABLE BEFORE HIM AT THE TIME OF ORIGINAL ASSESSMENT TO FO RM AN OPINION THAT ITA NOS. 2512 & 2513/MUM/2014 M/S. KORES (INDIA) LTD. 6 INCOME HAS ESCAPED ASSESSMENT WHICH IS NOTHING BUT A CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER THE ACT . IN DEFENCE OF HIS ARGUMENTS THE LEARNED A.R. RELIED ON A SERIES OF DECISIONS, VIZ.: - (I) CIT VS. KELVINATOR OF INDIA LTD. (2010) 187 TAXMAN 312 (SC) (II) OHM STOCK BROKERS (P.) LTD. VS. CIT (2013) 31 TAXMA NN.COM 354 (BOM) (III) J.V. GOKAL & CO. VS. ACIT (2015) 53 TAXMANN.COM 494 (MUM- TRIB) THE LEARNED A.R. FINALLY SUBMITTED BEFORE THE BENCH THAT IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT AND VA RIOUS OTHER HON'BLE HIGH COURTS ON THE ISSUE, THE ASSESSMENT PROCEEDING S SHOULD BE QUASHED AS VOID ABINITO BEING BASED UPON A CHANGE OF OPINIO N BY THE AO. 5. THE LEARNED D.R., ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW BY SUBMITTING THAT THE ASSESSMENT WAS RIGHTLY REOPENED UNDER SECTION 147 R.W.S 148 OF THE ACT AS THE INCOM E ON THREE ISSUES, VIZ., DONATION AND CHARITY OF ` 31,37,000/-, DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT OF ` 1,80,437/- AS AUDIT REPORT AND DISALLOWANCE ON ACCO UNT OF PROVISION FOR GRATUITY OF ` 3,91,653/- HAVE CLEARLY ESCAPED ASSESSMENT AND THEREFORE THE ORDER OF THE CIT(A) DESERVED TO BE UP HELD. THE LEARNED D.R. RELIED ON THE ORDERS OF THE HON'BLE SUPREME COURT I N THE CASES OF CIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. IN APPEAL (C IVIL) NO. 2830 OF 2007 AND RAYMOND WOOLLEN MILLS LTD. VS. ITO AND OTHERS 2 36 ITR 34 IN WHICH THE REOPENING OF ASSESSMENT WAS UPHELD BY THE HON'B LE APEX COURT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD INCLUDING THE IMPUGNED ORDER AN D CASE LAWS RELIED UPON BY THE RIVAL PARTIES. THE UNDISPUTED FACTS ARE THAT THE AO HAS REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE AC T AFTER RECORDING REASON TO BELIEVE THAT THREE ITEMS OF INCOME HAVE E SCAPED ASSESSMENT, WHICH ARE EXTRACTED IN PARA 3 ABOVE. A PERUSAL OF T HE REASONS TO BELIEVE REVEALS THAT THE RECORDS ON THE BASIS OF REASONS F OR RE-OPENING WERE RECORDED WERE AVAILABLE BEFORE THE AO EVEN AT THE T IME OF ORIGINAL ASSESSMENT PROCEEDINGS AS IS APPARENT FROM THE STAT EMENT OF COMPUTATION ITA NOS. 2512 & 2513/MUM/2014 M/S. KORES (INDIA) LTD. 7 OF TOTAL INCOME PLACED AT PAGE 1 OF THE PAPER BOOK AND ALSO FORTIFIED BY THE DISCUSSIONS BY THE AO HIMSELF IN THE ORIGINAL ASSES SMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT DATED 2 2.12.2008 IN PARAS 4, 6, 27 AND 31 OF THE ORIGINAL ASSESSMENT ORDER, A CO PY OF WHICH IS PLACED IN THE RECORD AT PAGES 3 TO 18 OF THE PAPER BOOK. THUS WE FIND THAT THE AO HAS RECORDED THE REASONS ON RE-EXAMINATION OF THE S AME RECORDS/INFORMATION WHICH WERE AVAILABLE AT THE TIM E OF FRAMING THE ORIGINAL ASSESSMENT PASSED UNDER SECTION 143(3) R.W .S. 153A OF THE ACT AS REFERRED TO ABOVE. AFTER EXAMINATION OF THE FACTS I N TOTALITY WE ARE OF THE CONSIDERED VIEW THAT A REVIEW BY THE AO OF HIS OWN ORDER IS NOT PERMISSIBLE UNDER THE ACT AS DECIDED BY THE HON'BLE SUPREME COU RT IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) AND VARIOUS OTHER DECISIONS. THE DECISION RELIED UPON BY THE REVENUE IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) AND RAYMOND WOOLLEN MILLS LTD. (SUPRA) DO NOT COME TO THE RESCUE OF THE REVENUE AS THE SAME WERE DISTINGUISHABLE ON FACTS AND NOT APPLICABLE TO THE PRESENT CASE. IN TH E CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. THE RETURN WAS PROCESSED UN DER SECTION 143(1) AND NO ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF TH E ACT AND THE HON'BLE APEX COURT HAS HELD THAT THE FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE AO POWERLESS TO INITIATE REASSESSMEN T PROCEEDINGS. IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. THE FACTS WERE O BTAINED BY THE REVENUE FROM THE SUBSEQUENT YEARS ASSESSMENT PROCEEDINGS. IN VIEW OF THE ABOVE SAID DISCUSSION AND THE RATIO LAID DOWN BY THE HON' BLE APEX COURT IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) WE ARE OF THE VIEW THAT THE REASSESSMENT PROCEEDINGS WERE INVALIDLY INITIATED A ND ACCORDINGLY QUASHED. SINCE WE HAVE QUASHED THE RE-ASSESSMENT PR OCEEDINGS, THE ISSUES RAISED ON MERITS NEED NO ADJUDICATION. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN ITA NO. 2513/MUM/2014 FOR A.Y. 2007-08 THE ASSES SEE HAS RAISED IDENTICAL ISSUES AS RAISED IN ITA NO. 2512/MUM/2013 EXCEPT VARIATION IN FIGURES. THEREFORE OUR OBSERVATIONS AND DECISION GI VEN IN THE ABOVE MENTIONED APPEAL IS MUTATIS MUTANDIS APPLICABLE TO THIS APPEAL ALSO. ITA NOS. 2512 & 2513/MUM/2014 M/S. KORES (INDIA) LTD. 8 9. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE AR E ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH FEBRUARY, 2018. SD/ - SD/ - (D.T. GARASIA) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 13 TH FEBRUARY, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -38, MUMBAI 4. THE CIT, CENTRAL-IV, MUMBAI 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.