ADIT (IT) 2(1), MUMBAI V. DBS BANK LTD, MUMBAI

ITA 3935/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2826 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 05-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tangible material; Difference of opinion; Revised return; Change of opinion; Reassessment proceedings
• Section: 143(3); 148

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI N.K.BILLAIYA, AM AND SHRI AMARJIT SINGH , JM ITA NO.3819/MUM/2012 : ASST.YEAR 2003-2004 M/S.DBS BANK LIMITED 3 RD FLOOR, FORT HOUSE 221, DR.D.N.ROAD, FORT MUMBAI 400 001. PAN : AAACT4652J. / VS. THE ASST.COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION)-1(2) MUMBAI. ( / APPELLANT) ( / RESPONDENT) ITA NO.3935/MUM/2012 : ASST.YEAR 2003-2004 THE ASST.COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION)-1(2) MUMBAI. / VS. M/S.DBS BANK LIMITED 3 RD FLOOR, FORT HOUSE 221, DR.D.N.ROAD, FORT MUMBAI 400 001. ( / APPELLANT) ( / RESPONDENT) /REVENUE BY : SHRI K.RAVI RAMCHANDRAN (CIT-DR) ! '#$ /ASSESSEE BY : SHRI MADHUR AGARWAL / DATE OF HEARING : 20.10.2015 / DATE OF PRONOUNCEMENT : 28.10.2015. / O R D E R PER N.K.BILLAIYA (AM) : THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE RE VENUE AGAINST THE VERY SAME ORDER OF THE COMMISSIONER OF INCOME-T AX (APPEALS) 10, MUMBAI, DATED 30.03.2012 PERTAINING THE ASSESSMENT YEAR 2003-2004. SINCE BOTH THESE APPEALS WERE HEARD TOGETHER AND AR E DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.3819 & 3935/MUM/2012 M/S.DBS BANK LIMITED. 2 2. WE ARE TAKING ASSESSEES APPEAL IN ITA NO.3819/M UM/2012 FIRST AS THE ASSESSEE HAS CHALLENGED THE VERY JURISDICTION O F THE ASSESSING OFFICER FOR REOPENING A COMPLETED ASSESSMENT BY ISSUE OF NOTICE U/S 148 OF THE ACT. SINCE THIS ISSUE GOES TO THE ROOT OF THE MATTER, WE HAVE HEARD THE RIVAL CONTENTIONS AT LENGTH AND HAVE CAREFULLY PERUSED TH E ORDERS OF THE AUTHORITIES BELOW. 3. THE FACTS EMERGING OUT OF ASSESSMENT ORDER SHOW THAT THE NOTICE U/S 148 WAS ISSUED BY THE AO IS DATED 30.03.2010 AND SI NCE THE ASSESSMENT YEAR IS 2003-2004, UNDISPUTEDLY THE NOTICE IS ISSUE D AFTER FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE REASONS RE CORDED FOR THE REOPENING OF THE ASSESSMENT ARE EXHIBITED AT PAGE 2 7 OF THE PAPER BOOK. THE RELEVANT PORTION OF THE SAID NOTICE IS AS UNDER :- ON PERUSAL OF THE RECORDS, IT IS NOTICED THAT THE CLAIM ALLOWED IS NOT IN ORDER AS M/S.PSA SICAL TERMINALS LIMITED WAS APPROVED BY THE GOVERNMENT AS INFRASTRUCTURE ENTERPRISE VIDE NOTIFICATION NO.143/2004 DATED 28.04.04. THEREFORE, EXEMPTION PR OVIDED U/S 10(23G) IS APPLICABLE TO M/S.PSA SICAL TERMINAL LTD . W.E.F. 28.04.04 AND NOT APPLICABLE TO EARLIER PERIOD. THUS , THE DEDUCTION CLAIMED AND ALLOWED IN A.Y. 2003-04 IS NO T IN ORDER. THEREFORE, THE INCOME TO THE EXTENT OF RS.118,12,97 7 HAS ESCAPED THE ASSESSMENT. 3.1 WITH THESE OBSERVATIONS, THE COMPLETED ASSESSME NT WAS REOPENED BY ISSUE OF NOTICE U/S 148 OF THE ACT, WHICH HAS BEEN CHALLENGED BY THE ASSESSEE STATING THAT THERE WAS NO TANGIBLE MATERIA L AVAILABLE WITH THE AO FOR THE ISSUE OF THE NOTICE, AND HENCE, THE REASSESSMEN T PROCEEDINGS ARE BAD IN LAW. ITA NOS.3819 & 3935/MUM/2012 M/S.DBS BANK LIMITED. 3 3.2 THIS CLAIM OF THE ASSESSEE DID NOT FIND ANY FAV OUR WITH THE CIT(A), WHO WAS OF THE OPINION THAT SINCE THE ASSESSEE HAS NOT GIVEN COMPLETE DETAILS IN THE ASSESSMENT PROCEEDINGS, THE REASSESSMENT PROCEE DINGS IS VALID AND AS PER THE PROVISIONS OF THE LAW. 3.3 THE ORIGINAL RETURN WAS REVISED BY THE ASSESSEE BY FILING A REVISED RETURN OF INCOME AND IN THE COMPUTATION OF INCOME T HE ASSESSEE HAS DEDUCTED RS.1,18,12,997 AS INCOME EXEMPT U/S 10(23G ) BY REFERRING TO NOTE 5. THIS COMPUTATION OF INCOME IS EXHIBITED AT PAGE 25P OF THE PAPER BOOK AND THE NOTE 5 CAN BE FOUND AT EXHIBIT 25R, WHICH R EADS AS UNDER:- THE BANK HAS CLAIMED AN AMOUNT OF RS.1,18,12,977 A S EXEMPT UNDER SECTION 10(23G) FOR THE NET INCOME EARNED ON LONG TERM FACILITY GIVEN TO M/S.PSA SICAL TERMINALS LIMITED, WHICH HAS BEEN APPROVED VIDE NOTIFICATION NO.143/2004 DATED 2 8 TH APRIL, 2004 UNDER SECTION 10(23G) OF THE ACT. THE WORKING OF THE SAID AMOUNT AND THE COPY OF THE EXEMPTION CERTIFICATE IS PROVIDED IN ANNEXURE I. 3.4 IF THIS NOTE APPENDED TO THE COMPUTATION OF INC OME IS READ WITH THE REASONS FOR REOPENING, WE FIND THAT THE REASONS GIV EN BY THE AO ARE VERBATIM TO THIS NOTE 5 TO THE COMPUTATION OF INCOME, WHICH CLEARLY SHOWS THAT THERE WAS NO NEW TANGIBLE MATERIAL AVAILABLE WITH THE AO. THE AO HAS SIMPLY ADOPTED THE OBSERVATIONS GIVEN IN THE COMPUTATION O F INCOME. FURTHER WE FIND THAT IN ITS REPLY DATED 11.08.2005, WHICH IS P LACED AT PAGE 29 OF THE PAPER BOOK, THE ASSESSEE HAS EXPLAINED THAT THE LOA N GIVEN TO M/S.PSA SICAL TERMINALS LIMITED HAS BEEN GRANTED EXEMPTION U/S.10 (23G) VIDE NOTIFICATION NO.143/2004, DATED 28 TH APRIL, 2004. IT IS ALSO CLEARLY MENTIONED THAT IN THE RETURN OF INCOME FOR ASSESSMENT YEAR 2002-2003, THE SAME WAS ITA NOS.3819 & 3935/MUM/2012 M/S.DBS BANK LIMITED. 4 COMMUNICATED TO THE AO AND HE HAS ALLOWED THE NET A MOUNT AS EXEMPT IN THE ASSESSMENT MADE U/S 143(3) OF THE ACT. A PERUSA L OF THE NOTIFICATION OF THE CBDT, WHICH IS AT PAGE 25U OF THE PAPER BOOK SH OW THAT THE EXEMPTION IS GIVEN WITH EFFECT FROM ASSESSMENT YEAR 2000-2001 UP TO ASSESSMENT YEAR 2029-2030. THIS SHOWS THAT WHILE ALLOWING EXEMPTION IN ASSESSMENT YEAR 2002-2003, THE AO WAS WELL AWARE THAT THE CBDT HAS ALLOWED EXEMPTION FOR A PERIOD OF 30 YEARS. THEREFORE, THE VIEW TAKEN BY THE CIT(A) THAT NECESSARY DETAILS WERE NOT MADE AVAILABLE, IS ILL FOUNDED. 3.5 CONSIDERING THE AFOREMENTIONED FACTS IN TOTALIT Y IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT V. KELVINATOR OF INDIA LTD. [(2010) 187 TAXMAN 312 (SC)] , WE HAVE NO HESITATION TO HOLD THAT THE NOTICE ISSUED U/S 148 IS BAD IN LAW. WE ACCORDI NGLY SET ASIDE THE SAME AND DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 4. BEFORE PARTING THE LEARNED DR IN HIS WRITTEN STA TEMENT HAS RELIED UPON CERTAIN JUDICIAL DECISIONS TO SUBSTANTIATE HIS CLAI M THAT THIS IS NOT A CASE OF CHANGE OF OPINION. WE HAVE ELABORATELY DISCUSSED TH E FACTS OF THE CASE IN HAND AS WELL. THE FACTS ARE CLEARLY DISTINGUISHABLE , THEREFORE, THE RELIANCE PLACED ON THE JUDICIAL DECISIONS BY THE DR IS MISPL ACED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO.3935/MUM/2012 : REVENUES APPEAL : 6. SUB LETTO FUNDAMENTO CREDIT OPUS, MEANING THEREBY IF THE FOUNDATION IS REMOVED, THE SUPERSTRUCTURE WILL FALL. SINCE IN ITA NO.3819/MUM/2012, WE HAVE QUASHED THE REASSESSMENT PROCEEDINGS (THE FOUN DATION), THE ITA NOS.3819 & 3935/MUM/2012 M/S.DBS BANK LIMITED. 5 SUPERSTRUCTURE (THE REASSESSMENT ORDER) FALLS. THER EFORE, WE DO NOT FIND ANY REASON TO GO INTO THE MERITS OF THE CASE. 7. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DI SMISSED. ORDER PRONOUNCED ON THIS 28 TH DAY OF OCTOBER, 2015. !' # $ SD/- (AMARJIT SINGH) SD/- (N.K.BILLAIYA) ! / JUDICIAL MEMBER / ACCOUNTANT MEMBER ! MUMBAI; ! DATED : 28 TH OCTOBER, 2015. DEVDAS* (!$)*+ *,$ / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ' ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT, MUMBAI. 4. ) / CIT(A) - 10, MUMBAI 5. ',# ((-. , -. , ! / DR, ITAT, MUMBAI 6. #01 2 / GUARD FILE.