Jasjit Singh Sidhu, Chandigarh V. ITO, Chandigarh

ITA 30/CHANDI/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9732 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Wrong claim; Difference of opinion; Assessment record; Change of opinion; Reassessment proceedings
• Section: 143(3); 244A; 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 30 & 31/CHD/2015 A.Y: 2008-09 & 2009-10 SHRI JASJIT SINGH SIDHU, VS THE ITO, QUITE OFFICE NO. 15, WARD 4(4), SECTOR 35-A, CHANDIGARH. CHANDIGARH. PAN: AMVPS7100A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI SUSHIL KUMAR,CIT-DR DATE OF HEARING : 20.07.2016 DATE OF PRONOUNCEMENT : 26.07.2016 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS) CHANDIGARH DAT ED 31.10.2014 FOR ASSESSMENT YEAR 2008-09 AND 200910. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. ITA 30/2015 (A.Y. 2008-09) 3. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGED TH E RE-OPENING OF ASSESSMENT UNDER SECTION 147/148 OF T HE 2 INCOME TAX ACT AND ADDITION OF RS. 18 LACS ON ACCOU NT OF DISALLOWANCE OF INTEREST. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSMEN T IN THIS CASE WAS INITIALLY COMPLETED UNDER SECTION 143 (3) OF THE ACT ON 30.11.2010. SUBSEQUENTLY IT WAS NOTICED THAT ASSESSEE HAD DECLARED INTEREST ON FDR OF RS. 21,17,554/- AND AFTER CLAIMING DEDUCTION OF RS. 18 LACS UNDER SECTION 57 OF THE ACT ON ACCOUNT OF INTEREST PAID TO UNION BANK OF INDIA ON OVERDRAFT, NET INTEREST I NCOME OF RS. 3,17,554/- WAS DECLARED. AS PER REPLY FILED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S, THE FDRS WERE PURCHASED OUT OF AGRICULTURE INCOME A ND OVERDRAFT WAS NOT TAKEN FOR ACQUIRING THE SAME AND SO THE ASSESSING OFFICER INFERRED THAT OVERDRAFT WAS U TILIZED FOR PERSONAL PURPOSES. THE ASSESSING OFFICER FORME D HIS REASONS TO BELIEVE THAT INTEREST CLAIMED OF RS. 1 8 LACS WAS NOT ALLOWABLE DEDUCTION OUT OF THE INTEREST ON FDR AND SO NOTICE UNDER SECTION 148 WAS ISSUED AFTER RECORDING REASONS. THE LD. CIT(APPEALS), THEREFORE , CONFIRMED THE RE-OPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE ACT AND DISMISSED THIS GROUN D OF APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE ON ACCOU NT OF CHALLENGING THE RE-OPENING OF THE ASSESSMENT RAISED TWO CONTENTIONS THAT THE REASONS FOR RE-OPENING OF THE ASSESSMENT HAVE NOT BEEN SUPPLIED TO THE ASSESSEE 3 DESPITE ASSESSEE MADE A REQUEST IN WRITING AND THAT THE SIMILAR ISSUE WAS CONSIDERED IN ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT THEREFO RE, ON MERE CHANGE OF OPINION, RE-OPENING OF THE ASSESS MENT IS NOT VALID. 6. ON THE OTHER HAND, LD. DR PRODUCED THE ASSESSMENT RECORD AND PLACED ON RECORD COPY OF THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT A ND OBJECTED TO BOTH THE SUBMISSIONS OF THE ASSESSEE AN D ALSO FILED WRITTEN SUBMISSION AND SUBMITTED THAT EV EN IF REASONS ARE NOT SUPPLIED TO THE ASSESSEE, RE-ASSESS MENT CANNOT BE QUASHED AND THAT ISSUE WAS NOT EXAMINED B Y ASSESSING OFFICER AT ORIGINAL ASSESSMENT STAGE, THEREFORE, THERE IS NO CHANGE OF OPINION. 7. IT IS WELL SETTLED LAW THAT THE VALIDITY OF THE RE- ASSESSMENT PROCEEDINGS SHALL HAVE TO BE TESTED ON EXAMINING THE REASONS RECORDED FOR RE-OPENING OF TH E ASSESSMENT. THE LD. DR PRODUCED THE COPY OF THE REASONS RECORDED BY ASSESSING OFFICER FOR RE-OPENIN G OF THE ASSESSMENT. SAME READ AS UNDER : SH. JASJEET SINGH SIDHU, Q.O. 15, SECTOR 35A, CHANDIGARH. PAN: AMVPS7100A ASSESSMENT YEAR 2008-09 THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON WAS FILED BY THE ASSESSEE ON 30.03.2009 DECLARING INCOM E AT RS.2,05,630/-. THE ASSESSEE ALSO DECLARED AGRICULTU RAL INCOME AT RS.30.00 LACS. ASSESSMENT IN THE CASE OF THE ASS ESSEE WAS 4 MADE U/S 143(3) WAS FRAMED ON 30.11.2010 BY ACCEPTI NG THE RETURNED INCOME. 2. IT IS NOTICED FROM THE INFORMATION AVAILABLE ON RECORD THAT THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 57 OF THE I.T.ACT, 1961 OF RS. 18,00,000/- (INTEREST PAID TO UBI ON OVERDRAFT) AGAINST THE INCOME OF INTEREST ON FDR DE CLARED AT RS.21,17,554/-, UNDER THE HEAD INCOME FROM OTHER SO URCES, WHICH IS NOT AN ADMISSIBLE DEDUCTION. SUB CLAUSE (A)(I) OF CLAUSE (1) OF SECTION 58 OF I.T.ACT CLARIFIES THAT THE FOLLOWING AMOUNT SHALL NOT BE DEDUCTIBLE IN COMPUTING THE INCOME CHARGEABLE UN DER THE HEAD 'INCOME FROM OTHER SOURCES' NAMELY: (A) IN THE CASE OF ANY ASSESSEE (I) ANY PERSONAL EXPENSES OF THE ASSESSEE. SINCE THE FDRS WERE MADE OUT OF AGRICULTURAL INCOME ONLY AS IS EVIDENT FROM THE REPLY DATED 22.10.2010_AND NO SUCH EXPENSES LIKE OVERDRAFT WHERE INCURRED BY THE ASSESSEE FOR A CQUIRING THE SAME, HENCE THE OVERDRAFT HAS BEEN TAKEN BY THE ASSESSEE FOR HIS PERSONAL USE. THIS DEDUCTION IS NOT ALLOWAB LE. 3. IN VIEW OF THE ABOVE FACTS OF THE CASE, I HAVE REAS ONS TO BELIEVE THAT THE INCOME TO THE TUNE OF RS. 18.00 LACS HAS ESCAPED ASSESSMENT IN TERM OF THE PROVISIONS OF SEC TION 147 OF THE I.T.ACT, 1961. 4. R.K. TO ISSUE NOTICE U/S 148 FOR THE YEAR UNDER CONSIDERATION. S D/- ITO 7(I) IN THIS CASE, THE ORIGINAL ASSESSMENT WAS FRAM ED UNDER SECTION 143(3) OF THE ACT ON 30.11.2010 AND T HE ASSESSING OFFICER NOTED IN THE ASSESSMENT ORDER THA T NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT ALONGWITH DETAILED QUESTIONNAIRES HAVE BEEN SERVED UPON ASSESSEE. IT IS ALSO NOTED IN THE ORIGINAL ASSESSMENT ORDER THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAD INCOME FROM OTHER SOURC ES AND AGRICULTURE. THE ASSESSEE FURNISHED REQUISITE INFORMATION AND DOCUMENTS WHICH WERE CALLED UPON 5 DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER EXAMINED THE DOCUMENTS AND INFORMATION CALL ED FOR AND AFTER CONSIDERING THE EXPLANATION OF THE AS SESSEE AND MATERIAL ON RECORD, ASSESSING OFFICER ACCEPTED THE RETURNED INCOME. THE ASSESSING OFFICER IN THE REAS ONS FOR RE-OPENING OF THE ASSESSMENT HAS REFERRED TO RE PLY OF THE ASSESSEE DATED 22.10.2010 FILED AT THE ORIGINAL ASSESSMENT PROCEEDINGS, COPY OF WHICH IS FILED AT P AGE 1 OF THE PAPER BOOK IN WHICH THE ASSESSEE FILED REPLY ON SIX POINTS INCLUDING THE INTEREST INCOME EARNED FRO M FDR AND PAYMENT OF INTEREST OF RS. 18 LACS CLAIMED AGAINST FDR. THE ASSESSEE HAS ALSO PLACED ON RECOR D COPY OF THE ACKNOWLEDGEMENT OF FILING OF THE RETURN AND COMPUTATION OF INCOME IN WHICH THE ASSESSEE DISCLOS ED ALL THESE FACTS REGARDING EARNING OF THE INTEREST O N FDR AND DEDUCTION CLAIMED OF INTEREST OF RS. 18 LACS. IT, THEREFORE, APPEARS THAT AT THE ORIGINAL ASSESSMENT STAGE, ASSESSING OFFICER AFTER CALLING THE REPLY OF THE AS SESSEE WITH REGARD TO INCOME FROM OTHER SOURCES AND AFTER EXAMINING THE REPLY OF THE ASSESSEE, HAS ACCEPTED T HE CLAIM OF THE ASSESSEE OF DEDUCTION OF RS. 18 LACS O N ACCOUNT OF INTEREST. 7(II) IT IS WELL SETTLED LAW THAT MERE CHANGE OF OPINION OF ASSESSING OFFICER, CANNOT BE A GROUND FOR RE- ASSESSMENT AND THAT AMENDMENT OF SECTION 147 W.E.F. 01.04.1989 HAS NOT ALTERED THE POSITION. WE RELY U PON DECISION OF FULL BENCH OF DELHI HIGH COURT IN THE C ASE OF 6 KELVINATOR OF INDIA LTD. 256 ITR 1, DECISION OF SUP REME COURT IN THE CASE OF KELVINATOR OF INDIA LTD. 320 I TR 561, DECISION OF GUJRAT HIGH COURT IN THE CASE OF G ARDEN SILK MILLS PVT. LTD. 237 ITR 668, DECISION OF CALCU TTA HIGH COURT IN THE CASE OF BURGER PAINTS INDIA LTD. 245 ITR 648 AND DECISION OF THE SUPREME COURT IN THE CA SE OF FORAMER FRANCE 264 ITR 566. HON'BLE SUPREME COU RT IN THE CASE OF INDIAN OIL CORPORATION 159 ITR 956 H ELD THAT, NO CASE UNDER SECTION 148 IS MADE OUT WHEN THE FACTS WERE KNOWN ALL ALONG WITH TO THE REVENUE WHIL E MAKING THE ORIGINAL ASSESSMENT. HON'BLE SUPREME COURT IN THE CASE OF ASSOCIATED STONE INDUSTRY LTD. 224 ITR 560 HELD THAT THE ASSESSEE SHALL HAVE TO DISCLO SE ONLY THE PRIMARY FACTS. 7(III) HON'BLE BOMBAY HIGH COURT IN THE CASE OF T ITANOR COMPONENTS LTD. V ACIT & OTHERS 343 ITR 183 HELD AS UNDER : 'WHERE A REASSESSMENT IS SOUGHT TO BE MADE AFTER FO UR YEARS THE POWER CONFERRED BY SECTION 147 OF THE INC OME-TAX ACT, 1961, DOES NOT PROVIDE A FRESH OPPORTUNITY TO THE ASSESSING OFFICER TO CORRECT AN INCORRECT ASSESSMEN T MADE EARLIER UNLESS THE MISTAKE IN THE ASSESSMENT SO MADE IS THE RESULT OF A FAILURE OF THE ASSESSEE TO FULLY AND TRU LY DISCLOSE ALL MATERIALS FACTS NECESSARY FOR ASSESSMENT. THERE IS A DIFFERENCE BETWEEN A WRONG CLAIM MADE BY AN ASSESSEE A FTER DISCLOSING ALL THE TRUE AND MATERIAL FACTS FULLY AND TRULY AND A WRONG CLAIM MADE BY THE ASSESSEE BY WITHHOLDING THE MATERIAL FACTS FULLY AND TRULY. IT IS ONLY IN THE LATTER CASE THAT THE ASSESSING OFFICER WOULD BE ENTITLED TO PROCEE D UNDER SECTION 147. 7 HELD, ALLOWING THE PETITION, THAT THE ASSESSING OFFICER HAD NOT RECORDED THE FAILURE ON THE PART OF THE PETITIO NER TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT YEAR 1997-98. WHAT WAS RECORDED WAS THAT THE PETITIONER HAD WRONGLY CLAIMED CERTAIN DEDUCTIONS WHIC H HE WAS NOT ENTITLED TO. THE REASSESSMENT PROCEEDINGS INITIATED IN THE YEAR 2004 WERE NOT VALID 7(IV) HON'BLE CALCUTTA HIGH COURT IN THE CASE O F DEBASHIS MOULIK V ACIT 370 ITR 660 HELD AS UNDER : HELD ACCORDINGLY, ALLOWING THE PETITION, (I) THAT DURI NG THE PROCEEDINGS FOR SECTION 143(3) ASSESSMENT, ALL INFORMAT ION, DOCUMENTS AND OTHER RECORDS RELATING TO THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR WERE BEFORE THE ASSESSI NG OFFICER. THE REASONS WHICH WERE ADVANCED SHOWED DISCOVERY OF NEW FACTS FROM THE EXISTING RECORDS. SO THE ASSESSING OFFICER WANTED TO CHANGE HIS OPINION REGAR DING THE ASSESSMENT AND TO REOPEN IT. THEREFORE, IT COULD NOT BE SAID THAT THERE WAS ESCAPEMENT OF INCOME OR THAT TH ERE WERE REASONS FOR BELIEVING THAT THERE WAS ESCAPEMENT OF INCOME . 7(V) HON'BLE DELHI HIGH COURT IN THE CASE OF TECH MAN BUILDWELL P. LTD. V ACIT 370 ITR 771 HELD AS UNDER : HELD, ALLOWING THE PETITION, THAT THE 'REASONS TO B ELIEVE' NOWHERE HIGHLIGHTED WHAT, IF AT ALL, WAS THE MATERIAL WHICH THE ASSESSING OFFICER CAME UPON OR BECAME AWARE OF SUBSEQUENT TO THE ORIGINAL ASSESSMENT. IN OTHER WOR DS, WHAT TRIGGERED THE ASSESSING OFFICER'S CURIOSITY TO IMPE L HIM TO RE- EXAMINE THE FILES AND DOCUMENTS PERTAINING TO A COM PLETED ASSESSMENT WAS UNKNOWN. NOR DID THE MATERIALS PLACE D IN THE ASSESSMENT SHOW THAT THE ASSESSEE HAD UNJUSTIFI ABLY 8 SUPPRESSED VALID OR RELEVANT INFORMATION WHICH WAS OTHE RWISE AVAILABLE. THE ADVERTENCE TO THE DISALLOWANCE OF A PROVISION FOR AN UNASCERTAINED LIABILITY POINTS TO THE ASSESSIN G OFFICER INDULGING IN WHAT AMOUNTED TO NOTHING BUT A MASKED REVIEW. WHAT APPEARED TO HAVE EXCITED THE ASSESSING OFFICER 'S MIND WAS THAT THE ORIGINAL ASSESSMENT ORDER WAS NOT FRAM ED PROPERLY AS IT OVERLOOKED CERTAIN MATERIALS WHICH L ED TO LOSS OF REVENUE. THE ASSESSING OFFICER IN THE FIRST INSTANC E DID NOT PERFORM HIS JOB PROPERLY FOR WHICH THE ASSESSEE COU LD NOT BE FAULTED. THE ASSESSING OFFICERS OMISSION WAS THE S OLE BASIS FOR ISSUING THE REASSESSMENT NOTICE AND, CONSEQUENT LY, PROCEEDING TO MAKE THE DEMAND. THEREFORE, THE NOTIC E AND THE DEMANDS ARISING CONSEQUENT TO THE NOTICE WERE QUASHED. 8. CONSIDERING THE ABOVE FACTS AND DISCUSSION, IT I S CLEAR THAT DURING THE ORIGINAL ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER EXAMINED THE ISSUE OF INCOME FROM OTHER SOURCES AFTER CALLING THE REPLY AND EXPLANATI ON OF THE ASSESSEE AND DEDUCTION OF INTEREST OF RS. 18 LA CS WHICH FACTS WERE DISCLOSED BY THE ASSESSEE IN THE COMPUTATION OF INCOME FILED ALONGWITH THE RETURN OF INCOME. THEREFORE, ASSESSEE DISCLOSED ALL THE PRIM ARY FACTS IN THE RETURN OF INCOME AS WELL AS AT THE ORI GINAL ASSESSMENT STAGE. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL THE MATERIAL FACTS FULLY A ND TRULY. THE ASSESSEE HAS NOT CONCEALED ANY FACTS FR OM THE REVENUE AUTHORITIES. THE ASSESSING OFFICER DID NOT DISCOVER ANY NEW FACT AGAINST THE ASSESSEE AND MERE LY CONSIDERING THE COMPUTATION OF INCOME FILED BY ASSE SSEE 9 AT ORIGINAL ASSESSMENT STAGE, CAME TO A DIFFERENT O PINION SUBSEQUENTLY. THE ASSESSING OFFICER WANTED TO CHAN GE HIS OPINION WHICH WAS ALREADY TAKEN BY THE ASSESSIN G OFFICER AT ORIGINAL ASSESSMENT STAGE. IT APPEARS T O US THAT THE SUBSEQUENT ASSESSING OFFICER WAS OF THE VI EW THAT ORIGINAL ASSESSMENT ORDER WAS NOT PROPERLY FRA MED BY GRANTING DEDUCTION TO ASSESSEE OF INTEREST. EVE N IF THAT WAS A PRESUMPTION OF THE ASSESSING OFFICER THA T THE ASSESSING OFFICER IN THE FIRST INSTANCE DID NOT PER FORM HIS JOB PROPERLY FOR WHICH THE ASSESSEE COULD NOT B E FAULTED. THE SUBSEQUENT ASSESSING OFFICER IS NOT L EGALLY AUTHORIZED TO RECORD REASONS FOR RE-ASSESSMENT ON M ERE CHANGE OF OPINION. ALL THE ABOVE DECISIONS SQUAREL Y APPLY TO THE FACTS AND CIRCUMSTANCES OF THE CASE THEREFORE, RE-OPENING OF THE ASSESSMENT ON MERE CHA NGE OF OPINION WOULD NOT BE VALID. IN THIS VIEW OF THE MATTER, WE SET ASIDE AND QUASH THE ORDERS OF THE AUTHORITIES BELOW FOR RE-OPENING OF ASSESSMENT AND DELETE THE ADDITIONS. 9. IN VIEW OF THE ABOVE FINDING, THERE IS NO NEED T O CONSIDER THE ISSUE OF NON SUPPLY OF REASONS TO THE ASSESSEE OR THE ADDITION ON MERITS BECAUSE THESE AR E LEFT FOR ACADEMIC DISCUSSION ONLY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 10 ITA 31/2015 ( A.Y. 2009-10 ) 11. THE FACTS ARE SAME. THE ASSESSEE IN THIS APPEA L ALSO CHALLENGED THE RE-OPENING OF THE ASSESSMENT UN DER SECTION 147/148 OF THE ACT AND ADDITION OF RS. 48,86,572/- ON ACCOUNT OF DISALLOWANCE OF INTEREST. THE ASSESSING OFFICER PASSED THE ORIGINAL ASSESSMENT OR DER UNDER SECTION 143(3) DATED 19.10.2011. THE ASSESSI NG OFFICER RECORDED THE REASONS FOR RE-OPENING OF ASSESSMENT AS UNDER : SH. JASJEET SINGH SIDHU, Q.O. 15,SECTOR 35A, CHANDIGARH. PAN: AMVPS7100A ASSESSMENT YEAR 2009-10 THE ASSESSEE E-FILED RETURN OF INCOME O N 29.03.2010 DECLARING INCOME AT RS. 3,51,060/- CLAIMING THEREBY A REFUND OF RS. 8,02,600/- ON THE BASIS OF TDS CREDIT SOUGHT AT RS. 8,44,400/-. THE ASSESSEE ALSO DECLARED AGRICULTURAL INCOME OF RS.30 .00 LACS, THE RETURN SO FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) O F THE I.T.ACT, 1961 AND A REFUND OF RS.8,74,830/- (INCLUDING INTERES T U/S 244A AT RS.72,234/-) WAS ISSUED ON 28.03.2011. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT U/S 143(3) WAS FRAMED ON 19.10.2011 BY ACCEPTING THE RETURNED INCOME. 2. IT IS NOTICED FROM THE 26AS DETAILS THAT RECEIPT S DURING THE YEAR WERE AS UNDER : I) RECEIPTS UNDER SECTION 1941 RS. 18,09,671/- II) RECEIPTS UNDER SECTION 194A RS. 52,16,096 / TOTAL : RS . 70,25,767/- HOWEVER, ON GOING THROUGH THE RENTAL INCOME DECLARE D IT IS NOTICED THAT THE RECEIPTS HAVE BEEN DECLARED FROM VARIOUS PROPERTIES AT RS. 4,91,618/- (4,730+1,27,189+1,94,946+1,64,753) AS AGAINST THE R ECEIPTS OF RS. 18,09,671/-. THUS, THE RECEIPTS FROM HOUSE PROPERTY HAS RESULTANTLY BEEN DECLARED LESS BY RS. L3,18,053/-. 3. IT IS FURTHER NOTICED FROM THE INFORMATIO N AVAILABLE ON RECORD THAT ASSESSEE HAS DECLARED INCOME FROM OTHE R SOURCES AT RS.3,40,244/- I.E. INTEREST ON FDR AT RS.52 ,26,816/- MINUS INTEREST PAID TO UBI AT RS. 48,86,572/-. THE INTEREST HAS BE EN PAID ON THE OD 11 RAISED AGAINST FDRS FOR USE IN THE BUSINESS BY WAY OF INVESTMENT IN HIMACHAL CHEMICALS 8S SILICATE WORKS, HIMACHAL CHEM ICALS & SILICATE WORKS UNIT-II (50% SHARE) AND HIM CH EMICALS & ALLIED INDS. (17% SHARE). THE ASSESSEE HAS DECLARED EXEMPT INCOME U /S 10 AT RS. 12,10,116/-. SINCE THE INTEREST HAS BEEN PAID ON THE INVESTMENT MADE TO EARN EXEMPT INCOME, NO DEDUCTION OF EXPEN DITURE I.E. INTEREST CLAIMED AGAINST INTEREST EARNED IN TH IS CASE IS ALLOWABLE IN VIEW OF THE PROVISIONS OF SEC. 14AOF THE I.T.ACT,19 61. 4. IN VIEW OF THE ABOVE FACTS OF THE CASE, I HAVE R EASONS TO BELIEVE THAT THE INCOME TO THE TUNE OF RS. 13,18,05 3/- + RS. 48,86,572/- HAS ESCAPED ASSESSMENT IN TERM OF THE P ROVISIONS OF SECTION 147 OF THE I.T.ACT, 1961. 5. NOTICE U/S 148 FOR THE YEAR UNDER CONSIDERATION IS ISSUED. SD/- ITO (19.06.12) 12. THE ASSESSEE IN THE COMPUTATION OF INCOME DISCLOSED THE INCOME FROM OTHER SOURCES I.E. INTERE ST ON FDR AND REDUCED THE INTEREST PAID IN A SUM OF RS. 48,86,572/-. THE ASSESSING OFFICER CONSIDERING EXPLANATION OF THE ASSESSEE AND MATERIAL ON RECORD ACCEPTED THE CLAIM OF ASSESSEE AT ASSESSMENT STAGE. COPY OF REPLY OF THE ASSESSEE FILED AT ORIGINAL ASSESSMENT STAGE IS FILED AT PAGE 6 OF THE PAPER BO OK. 13. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITT ED THAT ISSUE IS SAME AS HAVE BEEN CONSIDERED IN PRECE DING ASSESSMENT YEAR 2008-09. IT MAY BE NOTED HERE THAT THE ASSESSING OFFICER REOPENED THE ASSESSMENT WITH REGA RD TO OTHER ISSUE ALSO I.E. RENTAL INCOME BUT NO ADDIT ION HAVE BEEN MADE IN THE ASSESSMENT ORDER. THE ISSUE IS SAME, THEREFORE, FOLLOWING THE REASONS FOR DECISION FOR ASSESSMENT YEAR 2008-09, WE SET ASIDE AND QUASH THE 12 ORDERS OF AUTHORITIES BELOW FOR RE-OPENING OF THE ASSESSMENT AND DELETE THE ADDITIONS. THERE IS NO N EED TO CONSIDER OTHER ISSUES OF NON SUPPLY OF COPY OF REASONS UNDER SECTION 147 TO THE ASSESSEE OR THE ADDITION ON MERIT. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 15. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAI NI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH JULY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD