Maris Exports, CHENNAI V. ITO, CHENNAI

ITA 3085/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7777 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDA KUMAR
• Assessee Lawyers: S NAGARAJAN
• Keywords: Reopening of assessment; Business income; Difference of opinion; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.3085/MDS/2016 ( / ASSESSMENT YEAR: 2007-08) M/S. MARIS EXPORTS, 11, OLD NO.9, CATHEDRAL ROAD, GOPALAPURAM,CHENNAI-600 086. VS THE INCOME TAX OFFICER, BUSINESS WARD-XV(4), CHENNAI-34. PAN:AAFFM2945P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.NAGARAJAN, C.A. /RESPONDENT BY : MR. V.NANDAKUMAR, JCIT /DATE OF HEARING : 26 TH DECEMBER, 2016 /DATE OF PRONOUNCEMENT : 28 TH DECEMBER,2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 4, CHENNAI DATED 29.08.2016 IN ITA NO.119/2013- 14/A.Y.2007-08/CIT(A)-4 PASSED UNDER SECTION 143(3) R.W.S.147 & 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER, THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD REOPENED THE 2 ITA NO.3085MDS/2016 ASSESSMENT UNDER SECTION 147/148 OF THE ACT ON MERE CHANGE OF OPINION. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD MADE ADDITION OF RS.17,12,548/- BEING THE DIFFERENCE IN THE NET VALUE OF FINISHED GOODS OF RS.80,66,226/- AGAINST THE TOTAL SALES OF RS.63,53,678/- SINCE THE CLOSING STOCK DISCLOSED WAS NIL. III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT SETTING OFF THE LOSSES OF EARLIER YEARS RELATING TO THE EXPORT BUSINESS AGAINST THE INCOME ARISING OUT OF THE ADDITION MADE BY THE LD.A.O. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF EXPORT OF GARMENTS REGIS TERED AS 100% EOU FILED ITS RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2007-08 ON 14.11.2007 RETURNING LOSS. INITIALLY, TH E ASSESSMENT WAS COMPLETED BY THE LEARNED ASSESSING O FFICER UNDER SECTION 143(3) OF THE ACT ON 31.12.2009. THE REAFTER, THE LEARNED ASSESSING OFFICER REOPENED THE ASSESSME NT BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT ON 29.03.2012 FOR THE REASON THAT THE ASSESSEE HAD SHO WN TOTAL VALUE OF FINISHED GOODS IN FORM 3CD AS ` 1,07,76,320/- WHEREAS IN THE PROFIT & LOSS ACCOUNT THE EXPORT OF SALE WAS DISCLOSED AS ` 65,53,670/- ONLY, THUS THERE WAS ESCAPEMENT 3 ITA NO.3085MDS/2016 OF INCOME TO THE TUNE OF ` 44.22 LAKHS (RS.1,07,00,000 RS.65,53,670). 4. AT THE OUTSET, THE LEARNED AUTHORIZED REPRESENTA TIVE SUBMITTED BEFORE US THAT DURING THE COURSE OF ORIGI NAL SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT, THIS IS SUE WAS CONSIDERED AND AFTER DELIBERATING THE ISSUE, THE LE ARNED ASSESSING OFFICER HAD COMPLETED THE ASSESSMENT UNDE R SECTION 143(3) OF THE ACT ON 31.12.2009. HE FURTHE R SUBMITTED THAT THERE WAS NO OCCASION FOR THE LEARNE D ASSESSING OFFICER TO REVISIT THE FILE OF THE ASSESS EE BECAUSE NO NEW FACTS HAD EMERGED NOR BROUGHT TO THE NOTICE OF THE LEARNED ASSESSING OFFICER. HE THEREFORE PLEADED THA T REOPENING OF ASSESSMENT ONCE AGAIN UNDER SECTION 14 7 / 148 OF THE ACT IS BAD IN LAW AND THEREFORE, THE ORDER O F THE LEARNED ASSESSING OFFICER IS DESERVED TO BE QUASHED. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NO T CONTROVERT TO THE SUBMISSION OF THE LEARNED AUTHORI ZED REPRESENTATIVE. HE FURTHER COULD NOT EXPLAIN IN REG ARD TO THE NEW FACTS THAT WAS BROUGHT TO THE NOTICE OF THE LE ARNED 4 ITA NO.3085MDS/2016 ASSESSING OFFICER DUE TO WHICH HE HAD REOPENED THE ASSESSMENT. 6. AFTER HEARING BOTH SIDES, WE FIND MERIT IN THE C ONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THERE WERE NO FRESH F ACTS AGAINST THE ORIGINAL ASSESSMENT WHICH HAD SURFACED BEFORE T HE LEARNED ASSESSING OFFICER WHICH MADE HIM TO REVISIT THE FILE OF THE ASSESSEE. THEREFORE THERE IS NO DOUBT THAT THE ISSUE PONDERED BY THE LEARNED ASSESSING OFFICER IS NOTHIN G BUT RE- EXAMINATION OF THE SAME FACTS WHICH HAD BEEN ALREAD Y EXAMINED BY HIM DURING THE COURSE OF ORIGINAL SCRUT INY ASSESSMENT. IN THIS SITUATION, THE DECISION OF THE HONBLE APEX COURT IN THE CASE ACIT VS. ICICI SECURITIES P RIMARY DEALERSHIP LTD. REPORTED IN 24 TAXMANN.COM 310 (SC) CITED BY THE LEARNED AUTHORIZED REPRESENTATIVE SQUARELY A PPLIES TO THE CASE OF THE ASSESSEE. THE HONBLE APEX COURT ON THE IDENTICAL SITUATION HAS HELD AS FOLLOWS:- 7. IN THE FACTS OF THE PRESENT CASE, THERE IS NOTHING NEW WHICH HAS COME TO THE NOTICE OF THE REVENUE. THE ACCOUNTS HAD BEEN FURNISHED BY THE PETITIONER WHEN CALLED UPON. THEREAFTER THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT. 5 ITA NO.3085MDS/2016 NOW ON A MERE RELOOK, THE OFFICER HAS COME TO THE CONCLUSION THAT THE INCOME HAS ESCAPED ASSESSMENT AND HE IS OF COURSE JUSTIFIED IN HIS ANALYSIS. IN OUR VIEW, THIS IS NOT SOMETHING WHICH IS PERMISSIBLE UNDER THE PROVISO TO SECTION 147 OF THE ACT WHICH SPEAKS ABOUT A FAILURE ON THE PART OF THE ASSESSEE TO MAKE A PROPER RETURN. IN THE PRESENT CASE, NO SUCH CASE IS MADE OUT ON THE RECORD. 8. IN THE CIRCUMSTANCES, WE ALLOW THIS PETITION IN TERMS OF PRAYER (A) AND QUASH AND SET ASIDE THE NOTICE DATED 27 TH MARCH, 2006 DIRECTING REOPENING OF THE ASSESSMENT FOR THE YEAR 1999-2000. 7. FOLLOWING THE DECISION OF THE HONBLE APEX COURT CITED SUPRA, WE HEREBY QUASH THE ORDER OF THE LEARNED ASS ESSING OFFICER BY HOLDING THAT THE REOPENING OF THE ASSESS MENT BY THE LD.AO., IN THE CASE OF THE ASSESSEE IS BAD IN L AW BECAUSE THERE WAS NO FRESH MATERIAL AGAINST THE ORIGINAL AS SESSMENT THAT HAD COME TO THE KNOWLEDGE OF THE LD.A.O., TO INSTIGATE HIM TO REVISIT THE FILE OF THE ASSESSEE, HOWEVER HE HAD PICKED UP THE FILE OF THE ASSESSEE BASED ON THE ISSUE WHI CH WAS ALREADY CONSIDERED BY HIM AT THE TIME OF ORIGINAL A SSESSMENT UNDER SECTION 143(3) OF THE ACT AND HENCE IT IS ONL Y A MERE CHANGE OF OPINION. 6 ITA NO.3085MDS/2016 8. SINCE WE HAVE QUASHED THE ORDER OF THE LEARNED ASSESSING OFFICER BY HOLDING THAT THE REOPENING OF ASSESSMENT UNDER SECTION 147 / 148 IS BAD IN LAW, W E REFRAIN FROM ADJUDICATING OTHER ISSUES ON MERITS BECAUSE TH E SAME WOULD BE ONLY ACADEMIC. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 28 TH DECEMBER, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 28 TH DECEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .