ACIT-I, Kanpur V. M/S Uttar Pradesh cricket association, Kanpur

ITA 258/LKW/2011

• Counselvise Citation: 25823714 RSA 2011
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-12-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 06-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: RAKESH GARG SHRI C P AGARWAL
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.258/LKW/2011 A.Y.:2001 - 02 A.C.I.T. - 1, KANPUR. VS. M/S UTTAR PRADESH CRICKET ASSOCIATION, KAMLA TOWER, KANPUR. PAN:AAABU0035B (APPELLANT) (RESPONDENT) C.O.NO.18/LKW/2011 (IN ITA NO.258/LKW/2011) A.Y.:2001 - 02 M/S UTTAR PRADESH CRICKET ASSOCIATION, KAMLA TOWER, KANPUR. PAN:AAABU0035B VS. A.C.I.T. - 1, KANPUR. (OBJECTOR) (RESPONDENT) REVENUE BY SHRI Y. P. SRIVASTAVA, D. R. ASSESSEE BY SHRI RAKESH GARG, ADVOCATE SHRI C. P. AGARWAL DATE OF HEARING 17/12/2013 DATE OF PRONOUNCEMENT 0 7 /02/2014 O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT (A) - I, KANPUR DATED 02/02/2011 FOR ASSESSMENT YEAR 2001 - 2002. 2. FIRST WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE . IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2 1. BECAUSE THE REASSESSMENT PROCEEDINGS INITIATED U/S. 148 AND THE REASSESSMENT FRAMED U/S.147 ARE WITHOUT JURISDICTION, BAD IN LAW BE QUASHED. 2. BECAUSE THERE BEING NO MATERIAL, THE REASONS RECORDED ARE DEVOID OF BELIEF SUGGESTING ANY ESCAPEMENT OF INCOME, THE PROCEEDINGS INITIATED FOR AND REASSESSMENT BOTH ARE VOID ABINITIO, THE REASSESSMENT BE QUASHED. 3. BECAUSE THE ORIGINAL ASSESSMENT BEING FRAMED U/S. 143(3) AND A PERIOD OF 4 YEARS HAVE ELAPSED. THERE BEING NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT, THE ENTIRE ACTION U/S.147/148 IS BAD IN LAW AND BE QUASHED. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE DECISION OF LEARNED CIT ( A) ON THIS ISSUE IS AS PER PARA 8 OF HIS ORDER ON PAGE 6 AND AS PER THE SAME , IT CAN BE SEEN THAT THE ONLY OBJECTION OF THE AUTHORITIES BELOW IS THAT WITHOUT ACTUALLY PURCHA SING LAND AND BUILDING, IT CANNOT BE SAID THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WERE FOR SPORTS ACADEMY. HE SUBMITTED THAT ESTABLISHING OF THE SPORTS ACADEMY ON OWN LAND IS NOT ESSENTIAL. HE FURTHER SUBMITTED THAT THE DETAILS OF THE EXPENDITURE I NCURRED AMOUNTING TO RS. 13 , 24 , 556 / - IS ON PAGE NO. 10 AND AS PER THE SAME , IT CAN BE SEEN THAT ALL THE EXPENSES WERE INCURRED EITHER FOR REPAIR OR RENOVATION OF KAMLA CLUB GROUND , WHICH WAS TAKEN ON LEASE FOR SPORTS ACADEMY OR FOR ACQUIRING CERTAIN EQUIPMENTS FOR THE SAME PUR POSE AND THEREFORE, THESE OBJECTIONS OF THE AUTHORITIES BELOW ARE NOT VALID. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS ISSUE WAS DEC IDED VIDE PARA 8 BY LEARNED CIT(A) AND THE SAME IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 8. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SUBMISSIONS AND ARGUMENTS OF LD. A.R ON THIS ISSUE. IN A NUTSHELL, IT IS ARGUED THAT THE A.O HAS REOPENED 3 THE CASE ON PRESUMPTION AND APPELLANT HAS DISCLOSED ALL THE PRIMARY FACTS DURING THE COURSE OF REGULAR ASSESSMENT. THEREFORE, REASSESSMENT PROCEEDINGS BEYOND FOUR YEARS OF REGULAR ASSESSMENT ARE NOT VALID BECAUSE FAILURE ON THE PART OF ASSESSEE IS NOT ESTABLISHED. THE ARGUMENT OF THE APPELLANT ON THIS GROUND IS NOT CORRECT AND SAME IS DIS TINGUISHABLE ALSO FROM THE CASES RELIED UPON BY THE APPELLANT. THE PROCEDURAL PART OF THE ISSUE AND SERVICE OF NOTICE IS CLEARLY IN ORDER AS IS NOTED IN THE ASSESSMENT ORDER. THE A.O HAS APPLIED HIS MIND AND COME TO THE CONCLUSION THAT THE ENCASHMENT OF FD RS FOR THE PURPOSE OF OPENING SPORT ACADEMY, WITHOUT ACTUALLY PURCHASING SUCH LAND AND BUILDING WAS AGAINST THE STATED PURPOSE. THESE FACTS ARE ALSO ADMITTED BY THE APPELLANT WHICH HAS BEEN AGITATED IN OTHER GROUNDS OF APPEAL. HENCE, 'THE FAILURE TO PUT IN TO OPERATION THE PROVISIONS OF SEC. 143(31 WILL NOT MAKE THE ASSESSING OFFICER POWERLESS OR INELIGIBLE FOR INVOKING SEC. 147 SO LONG AS THE PRE - REQUISITE OF SEC. 147 ARE FULFILLED', AS PER AIPITA MARKETING P LTD. VS. ITO 2008 (MUM) 21 SOT. FOR THE PURPOSE OF CONSIDERING THE ISSUANCE OF NOTICES AND REOPENING OF ASSESSMENT, I DO NOT FIND ANY DISCREPANCY AND LACK OF MATERIAL FOR THIS PURPOSE. FURTHER, SUFFICIENCY OF REASONS IS NOT A GROUND TO BE CONSIDERED FOR REASSESSMENT PROCEEDINGS AS PER THE DECISIONS IN T HE CASE OF ' RAYMOND WOOLLEN MILLS LTD. VS ITO 236 ITR(SUPREME COURT). 6. THE CASE OF THE ASSESSING OFFICER AND LEARNED CIT(A) IS THAT THE ENCASHMENT OF FDR FOR THE PURPOSE OF OPENING OF SPORTS ACADEMY CANNOT BE SAID TO HAVE BEEN UTILIZED FOR THE SAID PURPOSE WITHOUT ACTUALLY PURCHASING LAND AND BUILDING FOR THE PURPOSE OF SPORTS ACADEMY. WE FAIL TO UNDERSTAND THE BASIS FOR SAYING SO THAT WITHOUT PURCHASING OWN LAND AND BUILDING, SPORTS ACADEMY CAN NOT BE ESTABLISHED. AS PER THE DETAILS OF THE EXPENSE S AVAILABLE ON PAGE NO. 10 OF THE PAPER BOOK, WE FIND THAT THE EXPENSES WERE INCURRED ON ACCOUNT OF RENOVATION OF KAMLA CLUB GROUND, RENOVATION OF DRESSING & CHANGING ROOM OF KAMLA CLUB, REPAIRING OF FOUNTAIN AT KAMLA CLUB, NEW TUBE WELL AT KAMLA CLUB , BOW LING MACHINE, XEROX FAX MACHINE, DIESEL GENERATING SET AND POWER ROLLER & ROTARY GRASS CUTTER. THIS IS NOT THE OBJECTION OF THE 4 AUTHORITIES BELOW THAT THE SE EXPENSES ARE NOT IN RELATION TO A SPORTS ACADEMY. THE ONLY OBJECTION OF THE AUTHORITIES BELOW IS THAT SINCE THE ASSESSEE HAS NOT PURCHASED ITS OWN LAND AND BUILDING, IT CANNOT BE SAID THAT THE ASSESSEE IS STARTING OR ESTABLISHING A SPORTS ACADEMY. WE DO NOT FIND ANY MERIT IN THIS OBJECTION BECAUSE IN OUR CONSIDERED OPINION, A SPORTS ACADEMY CAN BE ES TABLISHED AND RUN EVEN ON RENTED /LEASED PREMISES. WE, THEREFORE, HOLD THAT THE OBJECTION OF THE AUTHORITIES BELOW IS NOT VALID. HENCE, THE REOPENING IS ALSO NOT VALID BECAUSE THE SAME IS WITHOUT A VALID REASON. SINCE THE REOPENING ITSELF IS NOT VALID, T HE ASSESSMENT FRAMED BY THE ASSESSING OFFICER CONSEQUENT TO SUCH REOPENING IS LIABLE TO BE QUASHED. WE ORDER ACCORDINGLY. AS A RESULT, THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 7. NOW WE TAKE UP THE APPEAL OF THE REVENUE. SINCE WHILE DECIDING THE CROSS OBJECTION OF THE ASSESSEE, WE HAVE HELD THAT THE ASSESSMENT ORDER IS NOT VALID BECAUSE THE REOPENING WAS NOT VALID, THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL HAVE BECOME INFRUCTUOUS AND DISMISSED ACCORDINGLY. AS A RESULT, THE APPEAL OF THE RE VENUE IS DISMISSED. 8. IN THE COMBINED RESULT, THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 7 / 02/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW 5