AROMA ORGANICS LIMITED, MUMBAI V. ITO ,WD- 14-(1)(2), MUMBAI

ITA 3037/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5798 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONI
• Assessee Lawyers: SEKHAR GUPTA
• Keywords: Depreciation; Transfer pricing; International transaction; Difference of opinion; Reason to believe; Unabsorbed depreciation; Change of opinion
• Section: 147; 148; 6; 139; 143(3); 142(1); 115JB; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 3037/MUM/2018 ASSESSMENT YEAR : 2008-09 M/S. AROMA ORGANICS LIMITED, 106-110, KRISHNA BHAVAN ANNEX, 22/B.S.D. MARG, GOVANDI, MUMBAI [PAN : AAACA5370J] VS. INCOME TAX OFFICER-14(1)(2), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SEKHAR GUPTA, AR RESPONDENT BY : SHRI VIJAY KUMAR SONI, DR DATE OF HEARING : 28-01-2019 DATE OF PRONOUNCEMENT : 01-02-2019 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME TAX(APPEALS)-22, MUMBAI, DATED 23-01-2018 FOR THE AY . 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: APPEAL NO 1: A) THE A.O. AND CIT (A) FAILED TO APPRECIATE THAT N OTICE U/S 148 IS TIME BARRED AND THEREFORE BAD IN LAW. B) YOUR APPELLANT PRAYS THAT THE NOTICE U/S 148 BE HELD TIME BARRED AND BAD IN LAW AND BE QUASHED APPEAL NO 2: ITA NO. 3037/MUM/2018 : 2 : A) YOUR APPELLANT SUBMITS THIS CASE ORIGINALLY WAS SELECTED FOR SCRUTINY U/S 142(1) AND ORDER WAS PASSED U/S 143(3) , THIS SPECIFIC POINT OF DEPRECIATION AND, MAT WAS DISCUSSED AND AR GUED BEFORE THE ASSESSING OFFICER ON 02/12/2012 ITSELF THERE BEING NO FURTHER QUERY. IT CANNOT BE SAID THAT THERE IS ANY OMISSION OR FAI LURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIA L FACTS NECESSARY FOR THE ASSESSMENT. B) BOTH THE CONDITIONS FOR ISSUING OF 148 ARE NOT S ATISFIED HENCE THE NOTICE U/S 148 ITSELF IS INVALID AS THERE IS NO PRI MA FACIE, NEW MATERIAL OR INFORMATION AS THE SAME MATTER HAS BEEN SPECIFICALLY DEALT WITH. C) YOUR APPELLANT PRAYS THAT THE NOTICE U/S 143 FOR REOPENING THE ASSESSMENT IS BAD IN LAW AND BE QUASHED, FURTHER TH E ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 OF THE I NCOME TAX ACT, 1961 BE QUASHED AND CANCELLED. APPEAL NO 3: A) YOUR APPELLANT SUBMITS THIS CASE ORIGINALLY WAS SELECTED FOR SCRUTINY U/S 142(1) AND ORDER WAS PASSED U/S 143(3) , THIS SPECIFIC POINT OF DEPRECIATION AND, MAT WAS DISCUSSED AND AR GUED BEFORE THE ASSESSING OFFICER ON 02/12/2012 ITSELF THERE BEING NO FURTHER QUERY. THE SAME WAS ACCEPTED BY THE ASSESSING OFFICER AND AN ORDER WAS PASSED ACCORDINGLY. REOPENING THE ASSESSMENT AMOUNT S TO RETHINKING AND REVISING THE ORDER AND AMOUNTS CLEAR LY TO CHANGE OF OPINION ON THE SAME MATER WHICH HAS BEEN DISCUSSED AND ACCEPTED. HENCE THERE IS NO CASE THAT THE INCOME HAS ESCAPED ASSESSMENT, THERE BEING NO NEW INFORMATION AND CONCEALMENT OF A NY FACTS. B) YOUR APPELLANT SUBMITS THAT THE REOPENING IS CHA NGE OF OPINION IN THE SAME SUBJECT MATTER HENCE THE ASSESSMENT IS BAD IN LAW AND BE QUASHED AND CANCELED. THE BASIS OF REASSESSMENT AMO UNTS TO RETHINKING AND REVISING THE ORIGINAL ORDER AND THAT WOULD AMOUNT TO CHANGE OF OPINION ON THE SAME ISSUE WHICH HAS ALREA DY BEEN DISCUSSED AND ACCEPTED. C) YOUR APPELLANT PRAYS THAT REASSESSMENT IS BAD IN LAW AND BE QUASHED AND THE ORIGINAL ORDER U/S 143(3) BE RESTOR ED BACK. APPEAL NO 4: A) YOUR APPELLANT SUBMITS THAT NET PROFIT OF RS, (- } 38,56,0637- BE ADOPTED AS PER THE PROFIT & LOSS ACCOUNT APPROVED B Y THE ANNUAL GENERAL MEETING. SECTION 115 JB DOES NOT REQUIRE AN Y ADDITION OR ITA NO. 3037/MUM/2018 : 3 : DEDUCTION TO BE MADE IF THE ACCOUNTS ARE SAME AS LA ID DOWN IN THE ANNUAL GENERAL MEETING & APPROVED BY THE MEMBERS B) AUDITED ACCOUNTS TO BE ACCEPTED IS ALSO AFFIRMED BY THE FOLLOWING DECISIONS- **KERALA HIGH COURT IN CIT VS. APOLLO TYRES LTD. (1 998) 149 CTR (KER) 538 : (1999) 237 TTR 706 (KER) : TC 524.2490 **APOLLO TYRES LTD. VS. CTT (2002) 174 CTR (SC) 521 ; (2002) 255 ITR 273 (SC) ON 2ND MAY, 2002. **SUTLEJ COTTON MILLS LTD. VS. ASSTT. CIT (1993) 46 TTJ (CAL) (SB) 310 **MALAYALA MANORAMA CO. LTD. VS. CIT (2008) 216 CTR (SC) 102 C) YOUR APPELLANT PRAYS THAT NET PROFIT AS PER THE ACCOUNTS AS LAID DOWN IN THE ANNUAL GENERAL MEETING & APPROVED BY TH E MEMBERS BE ADOPTED. APPEAL NO 5: A) YOUR APPELLANT SUBMITS THAT UNABSORBED DEPRECIAT ION IS DEDUCTABLE U/S 115JB OF RS. 73,90,914/- AS SECTION 115JB SPECIFICALLY PERMITS AMOUNT OF LOSS BROUGHT FORWARD S OR UNABSORBED DEPRECIATION TO BE REDUCED AS PER CLAUSE (I) TO (VI I) OF THE EXPLANATION OF SUB SECTION 2 B) YOUR APPELLANT PRAYS THAT THE AMOUNT OF BROUGHT FORWARD UNABSORBED DEPRECIATION OF RS. 73,90,914/- BE ALLOW ED IN DEDUCTION U/S 115JB C) YOUR APPELLANT PRAYS THAT THE ADDITION OF RS 73, 90,914/- BE DELETED IN FULL AND ALLOWED AS DEDUCTION U/S 115JB OF THE INCOME TAX ACT FOR THE AFORESAID ASSESSMENT YEAR 2008-09 AND M AT BE REWORKED APPEAL NO 6: A) YOUR APPELLANT SUMMITS THAT THE LEARNED ACIT HAS ERRED IN GRANTING TDS CREDIT OF ONLY RS.1,61,862/- AND NOT G RANTING FULL CREDIT OF TDS AS CLAIMED OF RS. 5,28,134/- WITHOUT ASSIGNI NG A COGENT REASON. B) YOUR APPELLANT PRAYS THAT TDS CREDIT CLAIMED OF RS. 5,28,134/- BE GRANTED IN FULL. ITA NO. 3037/MUM/2018 : 4 : YOUR APPELLANT PRAYS TO LEAVE, ADD, TO ALTER, AMEND , AND WITHDRAW ANY PART OF THE APPEAL WHICH MAY BE NECESSARY AT AN Y TIME. 3. IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT AT PAGE NO.1 OF THE ASSESSMENT ORDER, IT IS NOTED BY THE AO THAT EARLIER, THE ASSESSMENT WAS COMPLETED BY THE AO U/S. 1 43(3) OF THE INCOME TAX ACT (ACT), ON 27-12-2010 AND NOTICE U/S. 148 OF THE ACT WAS ISSUED BY THE AO ON 14-11-2014 AND THE ASSESSMENT YEAR INVOLVED IN THE PRESENT APPEAL IS AY. 2008- 09. HE SUBMITTED THAT THEREFORE, NOTICE ISSUED BY THE AO U/S. 148 OF THE ACT IS AFTER FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IT WAS ALSO SUBMITTED THAT UNDER THESE FACTS, THE PROVISO TO SECTION 147 OF THE ACT IS APPLICABL E. HE SUBMITTED THAT THEREFORE, IT SHOULD BE HELD THAT THE PROVIS O TO SECTION 147 IS APPLICABLE AND SINCE, THIS IS NOT THE A LLEGATION OF THE AO IN THE REASONS FOR REOPENING RECORDED BY HI M THAT THERE IS FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT AND ANY INCOM E HAS ESCAPED ASSESSMENT BECAUSE OF SUCH FAILURE OF THE ASS ESSEE. THEREAFTER, HE SUBMITTED THAT A COPY OF REASONS RECORDE D BY THE AO FOR REOPENING IS AVAILABLE ON PAGES 2 & 3 OF THE PAPER BOOK AND THE SAME IS ALSO REPRODUCED BY THE AO IN THE ITA NO. 3037/MUM/2018 : 5 : ASSESSMENT ORDER. HE POINTED OUT THAT IN THE REASONS RECO RDED BY THE AO, THERE IS NO ALLEGATION OF THE AO THAT ASSESSE E HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THE CURRENT YEAR. IT WAS SUBMITTED BY HIM THAT IN THE ABSENCE OF SUCH ALLEGATION OF THE AO, THE REOPE NING IS NOT VALID AND IN SUPPORT OF THESE CONTENTIONS, HE PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIL LTD., VS. ACIT [343 ITR 296] (BOM). 4. LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF THE L D. CIT(A). 5. I HAVE CONSIDERED THE SUBMISSIONS. I FIND THAT IN TH E FACTS OF THE PRESENT CASE, FIRST PROVISO TO SECTION 147 I S APPLICABLE. THIS PROVISO READS AS UNDER: SEC.147. IF THE ASSESSING OFFICER HAS REASON TO BE LIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, A SSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH H AS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURS E OF THE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT Y EAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT Y EAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON TH E PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) ITA NO. 3037/MUM/2018 : 6 : OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT Y EAR: PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IN A CASE WHERE ANY INCOME IN RELATION TO ANY ASSET (INCLUDIN G FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA, CHARGEABLE TO TAX, H AS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR: PROVIDED ALSO THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTERS WHICH ARE THE SUB JECT MATTERS OF ANY APPEAL, REFERENCE OR REVISION, WHICH IS CHARGEABLE TO TAX A ND HAS ESCAPED ASSESSMENT. EXPLANATION 1.PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DU E DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESS ARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT, NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED B Y THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSO N IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YE AR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TA X ; (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE A SSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAI MED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN ; (BA) WHERE THE ASSESSEE HAS FAILED TO FURNISH A RE PORT IN RESPECT OF ANY INTERNATIONAL TRANSACTION WHICH HE WAS SO REQUIRED UNDER SECTION 92E; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSES SED ; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RA TE ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXC ESSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR A NY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED; 4 [(CA) WHERE A RETURN OF INCOME HAS NOT BEEN FURNISH ED BY THE ASSESSEE OR A RETURN OF INCOME HAS BEEN FURNISHED BY HIM AND ON T HE BASIS OF INFORMATION OR DOCUMENT RECEIVED FROM THE PRESCRIBE D INCOME-TAX AUTHORITY, UNDER SUB-SECTION (2) OF SECTION 133C, I T IS NOTICED BY THE ASSESSING OFFICER THAT THE INCOME OF THE ASSESSEE E XCEEDS THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX, OR AS THE CASE MAY BE , THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOS S, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN;] ITA NO. 3037/MUM/2018 : 7 : (D) WHERE A PERSON IS FOUND TO HAVE ANY ASSET (INC LUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA. EXPLANATION 3.FOR THE PURPOSE OF ASSESSMENT OR REA SSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE IN COME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, N OTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASON S RECORDED UNDER SUB-SECTION (2) OF SECTION 148. EXPLANATION 4.FOR THE REMOVAL OF DOUBTS, IT IS HER EBY CLARIFIED THAT THE PROVISIONS OF THIS SECTION, AS AMENDED BY THE FINAN CE ACT, 2012, SHALL ALSO BE APPLICABLE FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2012. 5.1. AS PER THE SAID FIRST PROVISO TO SECTION 147, IF THE ORIGINAL ASSESSMENT WAS COMPLETED BY THE AO U/S. 143(3) OF THE ACT, AND THE NOTICE ISSUED BY THE AO U/S. 148 IS AFTER EXPI RY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEA R, HE HAS TO FULFILL THIS REQUIREMENT ALSO THAT THERE WAS FAIL URE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT. IN THE PRESE NT CASE, THE REASONS RECORDED BY THE AO FOR REOPENING ARE REPR ODUCED BY THE AO AT PARA NO. 2 OF THE ASSESSMENT ORDER, WHICH IS REPRODUCED HEREIN BELOW FOR READY REFERENCE: 2. SUBSEQUENTLY, IT IS NOTICED FROM THE COMPUTATIO N OF INCOME AS WELL AS PROFIT & LOSS ACCOUNT THAT THE ASSESSEE HAS REDUCED THE PRIOR PERIOD DEPRECIATION OF RS. 73,91,353/- AND INCOME T AX PERTAINING TO EARLIER YEARS OF RS. 439/- FROM THE NET PROFIT WHIC H IS NOT ALLOWED AS PER THE ACT. THEREAFTER, PROCEEDINGS U/S. 147 WAS INITIATED AND ACCORDINGLY NOTICE U/S. 148 WAS ISSUED ON 14.11.201 4, WHICH WAS DULY SERVED UPON THE ASSESSEE. IN RESPONSE, TO NOT ICE U/S. 148 THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COMPANY, SHRI JITENDRA S JOTSINGHANL, CA., ATTENDED AND SUBMITTED THE DETAIL S AND DISCUSSED THE CASE. THE A.R OF THE ASSESSEE COMPANY VIDE LETT ER DATED ITA NO. 3037/MUM/2018 : 8 : 13.02.2015, HAS STATED THAT THE RETURN FILED ON 25. 09.2008 MAY BE TREATED AS RETURN IN RESPONSE TO NOTICE U/S.148. TH E A.R OF THE ASSESSEE COMPANY HAS ASKED FOR THE REASONS FOR ISSU ING NOTICE U/S 14B AND THE SAME HAS BEEN DULY PROVIDED TO THE A. R . OF THE ASSESSES COMPANY, WHICH IS REPRODUCE AS UNDER: 'IN THIS CASE, RETURN OF INCOME WAS FILED ON 25.09.2 008 DECLARING TOTAL INCOME AT RS.16,99,790/-UNDER NORMAL PROVISIONS OF THE ACT AND BOOK PROFIT OF RS.19,35,026/- UNDER THE PROVISIONS OF SECTION 115J B OF THE ACT. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) ON 19.11.2008. THERE AFTER, THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT ORDER U/S 143( 3) WAS PASSED ON 27.12.2010 ACCEPTING THE RETURNED INCOME AS ASSESSED INCOME. SU BSEQUENTLY, IT IS NOTICED FROM THE COMPUTATION OF INCOME THAT THE ASSESSEE HAS R EDUCED THE PRIOR PERIOD DEPRECIATION OF RS.73,91,353/- AND INCOME TAX PERTA INING TO EARLIER YEARS OF RS.439/- FROM, THE NET PROFIT WHICH IS NOT ALLOWED AS PER THE ACT. FURTHER, IT IS SEEN FROM THE COMPUTATION OF INCOME THAT WHILE CALCUL ATING THE BONK PROFIT U/S 115JB, ASSESSEE HAS TAKEN THE NET PRO/IT AT (-) RS.3 8,56,063/- AND AFTER REDUCING THE PROVISION FOR TAXATION OF RS. 57,91,089/-, THE BO OK PROFIT WAS ARRIVED AT A FIGURE OF RS.19,35,026/-. THE CALCULATION IS REPRODU CED AS UNDER: CALCULATION OF BOOK PROFIT AS PER 115JB (MAT) NET PROFIT AS PER PROFIT & LOSS A/C AFTER PROVISION FOR TAXATION (-)RS.38,56,063/- LESS: BOOK DEPRECI ATION OF PREVIOUS YEARS PROVIDED THIS YEAR ADD: PROVISION FOR TAXATION (I) CURRENT & DEFERRED TAX (II) PROVISION OF F.B.TAX RS.57,01,219/- RS. 89,870/- RS. 57,91,089/- BOOK PROFIT FO R THE PURPOSE OF SECTION 115JB RS. 19,35,026/- FURTHER, IT IS SEEN THAT THE NET PROFIT AS PER PROF IT & LOSS A/C AFTER PROVISION FOR TAXATION IN REALITY STOOD AT RS. 35,34,851/- WHEREA S ASSESSEE ADOPTED THE NET PROFIT FIGURE OF (-)RS.38, 56,063/- AFTER REDUCTION OF 'PRIOR PERIOD DEPRECIATION OF RS. 73,9 1,353/- AND INCOME TAX OF RS.439/-.', WHICH IS NOT ALLOWABLE AS PER TH E PROVISIONS OF SECTION 115JB OF THE ACT AND AS WELL AS NORMAL PROV ISIONS OF THE INCOME-TAX ACT, 1961. ITA NO. 3037/MUM/2018 : 9 : IT IS PERTINENT TO MENTION HERE THAT ASSESSEE WHILE CALCULATING NET TAXABLE INCOME DISALLOWED THE 'PRIOR PERIOD DEPREDA TION OF RS.73,91,353/-. IN ITS COMPUTATION OF INCOME BUT W HILE CALCULATING BOOK PROFIT IT HAS NOT DISALLOWED THE SAME. AFTER APPLYING THE PROVISIONS OF SECTION 115JB OF T HE ACT, THE BOOK PROFIT SHOULD HAVE BEEN CALCULATED AS UNDER: CALCULATION OF 'BOOK PROFIT' AS PER 115JB OF THE AC T. NET PROFIT AS P ER PROFIT & LOSS A/C AFTER PROVISION FOR TAXATION RS. 35,34,851/- LESS: BOOK DEPRECIATION OF PREVIOUS YEARS PROVIDED THIS YEAR ADD.- PROVISION FAR TAXATION (I) CURRENT & DEFERRED TAX (II) PROVISION OF F.B.TAX RS.57,01,219/. RS. 89,870/- RS. 57,91,089/- BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB RS. 93,25,940/- DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS P AID THE, TAX OF RS-5,09,937/- ON THE TOTED INCOME OF RS.16,99,790/- DECLARED UNDER NORMAL PROVISIONS OF THE ACT WHEREAS THE TAX OF RS. 9,32,594/-, BEING THE HIGHER OF THE TWO, SHOULD HAVE BEEN PAID ON BOO K PROFIT OF RS.93,25,940/- AS PER THE PROVISIONS OF SECTION 115 JB OF THE ACT. THUS THE ASSESSEE HAS DELIBERATELY REDUCED THE BOOK PROFIT BY AN AMOUNT OF RS.73,90,914/- (RS. 93,25,940 (-) RS. 19, 35,026/-) AND UNDER PAID SHE TAX BY RS.4,22,657/- (RS.9,32,594/- U/S 115JB (-) RS.5,09,937/- UNDER NORMAL PROVISIONS) AND THEREBY MADE AN ATTEMPT TO ESCAPE FROM THE TAX LIABILITY WHICH IN I TSELF TANTAMOUNT TO CONCEALING THE PARTICULARS OF HIS INCOME OR DELIBER ATELY FURNISHING INACCURATE PARTICULARS OF SUCH INCOME WITHIN THE ME ANING OF THE SECTION 271(1)(C)OF THE I.T.ACT, 1961, FURTHER, ASSESSEE HAS FAILED TO FURNISH THE REPORT IN FORM NO.29B UNDER RULE 40B AS REQUIRED U/S 115JB OF THE I.T. ACT, 1961 IN RESPECT OF COMPUTING THE BOOK PROFITS OF THE COMPAN Y. MOREOVER REDUCTION OF PRIOR PERIOD DEPREDATION OF RS. 73,91, 353/- AND INCOME TAX OF RS. 439/- RESULTED IN LOWER BOOK PROFIT AND LOWER TAXES. IN VIEW OF THE ABOVE, I HAVE A REASON TO BELIEVE TH AT THE INCOME HAS ESCAPED THE ASSESSMENT WITHIN THE MEANING OF SECTIO N 147 ALONG WITH EXPLANATION 2(C) OF THE ACT.' ITA NO. 3037/MUM/2018 : 10 : 5.2. FROM THIS PARA, REPRODUCED FROM THE ORDER OF THE ASSESSMENT, IT IS SEEN THAT THE REASONS RECORDED BY THE A O FOR REOPENING ARE REPRODUCED BY HIM IN THIS PARA OF THE ASSESSMENT ORDER AND AS PER THE SAME, THIS IS NOT THE ALLEGATION OF THE AO THAT THERE WAS FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT. IN THE LIGHT OF THESE FACTS OF THE OF THE PRESENT CASE, THE JUDGMENT OF THE HON'BLE JURISDI CTIONAL HIGH COURT RENDERED IN THE CASE OF DIL LTD., VS. ACIT (SUPRA), IS CLEARLY APPLICABLE. HENCE, FOLLOWING THE SAME, I HOLD THAT THE REOPENING IS NOT VALID AND AS A CONSEQUENCES, THE RE- ASSESSMENT ORDER IS QUASHED. IN VIEW OF THIS, NO DEC ISION IS CALLED FOR ON MERITS. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF FEBRUARY, 2019 SD/- (A.K. GARODIA) /ACCOUNTANT MEMBER /MUMBAI; /DATED : 1 ST FEBRUARY, 2019 TNMM ITA NO. 3037/MUM/2018 : 11 : / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. # $ ( ) / THE CIT(A), MUMBAI 4. # $ / CIT, MUMBAI 5. '()*+ , #-*+#. , / DR, ITAT, MUMBAI 6. )/01 / GUARD FILE # / BY ORDER, ' //TRUE COPY// /# (DY./ASST. REGISTRAR) #-*+#., / ITAT, MUMBAI