Landbase India Ltd., Haryana V. DCIT, New Delhi

ITA 4027/DEL/2010

• Counselvise Citation: 402720114 RSA 2010
• Duration Of Justice: 4 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-03-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 31-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Assessee Lawyers: ROHIT JAIN; SHIKA SHARMA CAS
• Keywords: Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI N.K. SAINI AND SHRI I.C. SUDHIR ITA NO. 4027/DEL/2010 ASSESSMENT YEAR: 2000-01 LANDBASE INDIA LTD., VS. DCIT, PO HASASNPUR DIST. GURGAON, CIRCLE 4(1), TAURU, GURGAON (HR.) NEW DELHI. (PAN: AAACL0053F) (APPELLANT) (RESPONDENT) ITA NO. 3812/DEL/2010 ASSESSMENT YEAR: 2000-01 DCIT, VS. LANDBASE INDIA LTD., CIRCLE 4(1), PO HASASNPUR DIST. GURGAON, NEW DELHI. TAURU, GURGAON (HR.) (PAN: AAACL0053F) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI ROHIT JAIN & SHIKA SHARMA, CAS RESPONDENT BY: MS. SULEKHA VERM A, CIT(DR) DATE OF HEARING : 30 .03.2015 DATE OF PRONOUNCEMENT: 21 :05.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER ITA NO. 4027/DEL/2010 : THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER O N THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN UPHOLDING THE VALIDITY OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SEC. 143(3) READ WITH SEC. 147 OF THE INCOME-TAX ACT, 2 1961 (THE ACT), WITHOUT APPRECIATING THAT THE ORD ER OF ASSESSING OFFICER WAS BEYOND JURISDICTION, BAD IN LAW AND VOI D-AB-INITIO. 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT THE REASSESSMENT PRO CEEDINGS WERE INITIATED BY THE ASSESSING OFFICER ON A MERE CHANGE OF OPINION WITHOUT FORMING REASONABLE BELIEF OF ESCAPEMENT OF INCOME AND CONSEQUENTLY, THE REASSESSMENT ORDER WAS ILLEGAL AN D BAD IN LAW. 1.2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN HOLDING THAT THERE WAS NO CONSCIOUS APPLIC ATION OF MIND BY THE ASSESSING OFFICER AT THE TIME OF REGULAR ASSESS MENT PROCEEDINGS COMPLETED UNDER SEC. 143(3) OF THE ACT, EVEN THOUGH THE ENTIRE MATERIAL WAS AVAILABLE ON RECORD. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFI CER IN DISALLOWING THE DEDUCTION OF PROVISION FOR CONSTRUCTION AMOUN TING TO RS.2,77,52,000, CLAIMED BY THE APPELLANT DURING THE RELEVANT PREVIOUS YEAR. 2.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN HOLDING THAT THE LIABILITY ON ACCOUNT OF C ONSTRUCTION COST DID NOT ACCRUE TO THE APPELLANT DURING THE RELEVANT PRE VIOUS YEAR. 2.2 WITHOUT PREJUDICE, THAT THE CIT(A) ERRED ON FAC TS AND IN LAW IN NOT DIRECTING TO ALLOW THE EXPENSES IN RESPECT OF W HICH PROVISION WAS MADE IN THE SUBSEQUENT YEAR(S). GROUND NOS. 1 TO 1.2 2. IN THESE GROUNDS, VALIDITY OF REASSESSMENT FRAM ED UNDER SEC. 147 READ WITH 143(3) OF THE INCOME-TAX ACT, 1961 HAS BEEN QU ESTIONED ON SEVERAL 3 BASIS. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAD FILED RETURN OF INCOME ON 28.11.2000 DECLARING A LOSS OF RS.8,85,98 ,137. THE ASSESSMENT UNDER SEC. 143(3) OF THE ACT WAS ORIGINALLY COMPLET ED ON 28.3.2003 ASSESSING AT THE RETURNED LOSS. THEREAFTER, REASSES SMENT PROCEEDINGS WERE INITIATED UNDER SEC. 147 OF THE ACT VIDE NOTICE DAT ED 29.9.2004 ISSUED UNDER SEC. 148 OF THE ACT ON THE BASIS OF ALLEGED ESCAPEM ENT OF INCOME ON ACCOUNT OF PROVISIONS FOR CONSTRUCTION EXPENSES. IN THE REA SSESSMENT, THE ASSESSING OFFICER ASSESSED THE LOSS OF ASSESSEE AT RS.5,49,00 ,749 AGAINST THE LOSS OF RS.8,85,98,137 ASSESSED IN THE ORIGINAL ASSESSMENT. THE AGGRIEVED ASSESSEE QUESTIONED THE VALIDITY OF INITIATION OF REASSESSME NT AND THE ASSESSMENTS FRAMED IN FURTHERANCE THERETO BEFORE THE LEARNED CI T(APPEALS) BUT COULD NOT SUCCEED. 3. THE LEARNED AR CONTENDED THAT IN THE REASONS REC ORDED FOR INITIATION OF REOPENING PROCEEDINGS, THE ASSESSING OFFICER WAS HAVING REASON TO BELIEVE THAT AN INCOME OF RS.2,77,52,000 CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. HE SUBMITTED THAT ASSESSEE HAD CLAIMED AN EXPENSE OF RS.57,71,65,568.61 ON ACCOUNT OF CONSTRUCTION EXPEN SES (CIVIL WORK) WHICH INCLUDED AN AMOUNT OF RS.2,77,52,000 AS PROVISIONS FOR CONSTRUCTION. THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEE DINGS HAD EXAMINED THE ISSUE AS THE ASSESSEE HAD FILED ALL THE RELEVANT DE TAILS/DOCUMENTS ON THE ISSUE 4 OF PROVISIONS FOR CONSTRUCTION EXPENSES. THE LEARNE D AR REFERRED PAGE NO.9 OF THE PAPER BOOK I.E. COPY OF LETTER DATED 25.3.20 03 VIDE WHICH THE ASSESSEE HAS SUBMITTED DETAILS OF PROVISIONS MADE FOR CONSTR UCTION EXPENSES AS ON 31.3.2000 WITH COPIES OF BILLS SUBMITTED BY THE PAR TIES, BEFORE THE ASSESSING OFFICER. IN THE SAID LETTER, THE ASSESSEE HAD CATEG ORICALLY SUBMITTED THAT SINCE THE COMPANY WAS FOLLOWING ACCRUAL CONCEPT OF ACCOUN TING, IT WAS MANDATORY TO PROVIDE FOR EXPENSES. IT WAS ALSO CLARIFIED THAT SUCH PROVISION IS NOT AD HOC PROVISION BUT BASED ON INVOICES RECEIVED AND AG AINST WHICH PAYMENT HAS ALSO BEEN MADE SUBSEQUENTLY. THE AFORESAID DETAILS WERE FILED ON THE SPECIFIC DIRECTIONS OF THE ASSESSING OFFICER. THE LEARNED AR ALSO REFERRED PAGE NO. 164 OF THE PAPER BOOK SHOWING THAT VIDE NOTE NO.(VI I) IN THE NOTES TO ACCOUNTS FORMING PART OF AUDITED FINANCIAL STATEMEN T FOR THE YEAR. IT WAS STATED REGARDING REVENUE REORGANIZATION FROM THE SA LE OF LAND AND CONSTRUCTED APARTMENTS LABURNUN PROJECTS ON THE B ASIS OF PERCENTAGE COMPLETION METHOD AND INCLUSION OF ESTIMATED COST I N THE PROFITS COMPUTATION. FROM THE ABOVE DETAILS/DOCUMENTS, IT I S APPARENT THAT ON THE ISSUE OF PROVISIONS FOR CONSTRUCTION EXPENSES, THE ASSESSEE HAD MADE ADEQUATE DISCLOSURES AND THE ASSESSING OFFICER, IN THE ORIGINAL ASSESSMENT PROCEEDINGS, HAD, IN FACT, MADE SPECIFIC INQUIRIES/ INVESTIGATIONS. IN SUPPORT, HE REFERRED PAGE NOS. 10 TO 81 OF THE PAPER BOOK I. E. DETAILS OF PROVISIONS FOR 5 CONSTRUCTION WORK AMOUNTING TO RS.2.77 CRORES ALONG WITH THE COPIES OF BILLS SUBMITTED BY THE PARTIES, BEFORE THE ASSESSING OFFI CER. THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND AND AFTER DUL Y CONSIDERING THE EXHAUSTED DETAILS/DOCUMENTS FURNISHED BY THE ASSESS EE, AGGRIEVED WITH THE CLAIM AND, THEREFORE, DID NOT MAKE ANY ADJUSTMENT/D ISALLOWANCE ON ANY OF THE AFORESAID ISSUES IN THE ORIGINAL ASSESSMENT ORD ER. THERE IS NOTHING TO SUGGEST, EITHER FROM THE REASONS RECORDED AND/OR FR OM THE ASSESSMENT ORDER THAT ANY NEW FACT/INFORMATION CAME TO THE NOTICE OF THE ASSESSING OFFICER SUBSEQUENT TO THE ORIGINAL ASSESSMENT. THE LEARNED AR CONTENDED THAT ON PERUSAL OF THE REASONS RECORDED BY THE ASSESSING OF FICER BEFORE INITIATING THE IMPUGNED ASSESSMENT PROCEEDINGS, IT IS CLEARLY EVID ENT THAT THE ASSESSING OFFICER HAS MERELY REAPPRAISED THE DETAILS FORMING PART OF THE ORIGINAL ASSESSMENT PROCEEDINGS. THUS, THE REASSESSMENT INIT IATED IS NOTHING BUT A CHANGE OF OPINION, HENCE, IT IS NOT VALID IN LAW. I N SUPPORT, HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT VS. FORAMER FRANCE 264 ITR 567 (S.C); II) CIT VS. KELVINATOR INDIA LTD. 320 ITR 561 (S .C); III) NYK LINE (INDIA) LTD. VS. DCIT 346 ITR 355 (BOMBAY); IV ) CIT VS. SHRI AMITAB BACHAN ITA NO. 4646/BOM /2010; V ) CIT VS. USHA INTERNATIONAL LTD. 348 ITR 485 (DEL.) (F.B); VII ) CIT VS. ORIENT CRAFT LTD. 555/2012 (DELHI) ; VIII) ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. VS. ACIT 325 ITR 6 471 (BOMBAY). 4. LEARNED AR SUBMITTED FURTHER THAT THE DECISIONS IN THE CASES OF GRUH FINANCE VS. JCIT 243 ITR 482 (GUJ.) AND CIT VS. S .R. TALWAR 305 ITR 286 (ALL.) RELIED UPON BY THE LEARNED CIT(APPEALS) HAVING DISTINGUISHABLE FACTS ARE NOT RELEVANT IN THE PRESENT CASE. 5. THE LEARNED CIT(DR) ON THE OTHER HAND TRIED TO J USTIFY ORDERS OF THE AUTHORITIES BELOW WITH THIS CONTENTION THAT NO OBJE CTION WAS RAISED BEFORE THE ASSESSING OFFICER AGAINST THE VALIDITY OF INITIATI ON OF REOPENING PROCEEDINGS. THE ASSESSEE PARTICIPATED IN THE REASSESSMENT PROCE EDINGS. SHE SUBMITTED THAT PROVISIONS FOR CONSTRUCTION CANNOT BE CLAIMED BY THE ASSESSEE EITHER IN MERCANTILE OR CASH SYSTEM OF ACCOUNTING. SHE FURTHE R POINTED OUT THAT THE DOCUMENTS SUBMITTED BEFORE THE ASSESSING OFFICER DU RING THE ORIGINAL ASSESSMENT PROCEEDINGS VIDE LETTER DATED 25.3.2003 BY THE ASSESSEE WERE DATED 11.4.2000, 22.6.2000, 25.8.2000 ETC. WHICH AR E AFTER THE CLOSURE OF FINANCIAL YEAR AS ON 31.3.2000. THE LEARNED CIT(APP EALS) SUBMITTED THAT THE LEARNED CIT(APPEALS) HAS RIGHTLY UPHELD THE VALIDIT Y OF REASSESSMENT FRAMED BY THE ASSESSING OFFICER. SHE PLACED RELIANC E ON THE FOLLOWING DECISIONS: 7 I) CIT VS. PVS BEEDIES (P) LTD. (1999) 103 TAXM AN 294 (S.C); II) CIT VS. FIRST LEASING CO. OF INDIA LTD. (2001) 118 TAXMAN 181 (MADRAS); IN REJOINDER THE LEARNED AR SUBMITTED THAT THE DOCU MENTS OF LATER DATED WERE RELATED TO THE TRANSACTIONS OF THE RELEVANT PR EVIOUS YEAR ONLY. 6. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THE REOPENING PROCEEDINGS WERE INITIATED ON THE FOLLOWING REASONS : THE ASSESSEE HAS CLAIMED AN EXPENSE OF RS.57,71,65 ,568.61 P ON ACCOUNT OF CONSTRUCTION EXPENSES (CIVIL WORK), WHIC H INCLUDES AN AMOUNT OF RS.2,77,52,000 AS PROVISION FOR CONSTRUC TION. UNDER THE INCOME-TAX ACT, 1961, A PROVISION MADE IN THE ACCOU NTS FOR AN ACCRUED OR KNOWN LIABILITY IS AN ADMISSIBLE EXPENDI TURE WHILE OTHER PROVISIONS MADE DO NOT QUALIFY FOR DEDUCTION. SINCE THIS LIABILITY HAS ACTUALLY NOT ARISEN AND INCURRED DURING THE PREVIOU S YEAR, THE SAME IS NOT AN ALLOWABLE DEDUCTION FOR THE ASSESSMENT YEAR 2000-01 . I HAVE REASON TO BELIEVE THAT AN INCOME OF RS.2,77, 52,000 CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YE AR 2000-01. ISSUE NOTICE U/S. 148 FOR THE A.Y. 2000-01. 7. ON PERUSAL OF THE ABOVE REASONS, WE FIND I T APPARENT THAT THE ASSESSING OFFICER HAS INITIATED REOPENING PROCEEDINGS MERELY ON REAPPRAISAL OF THE DETAILS FORMING PART OF THE ORIGINAL ASSESSMENT PRO CEEDINGS. IT IS EVIDENT FROM THE PAPER BOOK THAT VIDE LETTER DATED 25.3.200 3, THE ASSESSEE HAD FURNISHED DETAILS OF PROVISIONS MADE FOR CONSTRUCTI ON EXPENSES AS ON 31.3. 2000 WITH COPIES OF BILLS SUBMITTED BY THE PARTIES, BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. THUS, THERE IS NOTHING TO SUGGEST THAT ANY NEW FACT/INFORMATION HAD COME TO T HE NOTICE OF THE 8 ASSESSING OFFICER SUBSEQUENT TO THE ORIGINAL ASSESS MENT TO ACQUIRE JURISDICTION BY HIM TO INITIATE REOPENING PROCEEDIN GS UNDER SEC. 147 OF THE ACT. THE HON'BLE SUPREME COURT IN THE CASE OF CIT V S. KELVINATOR INDIA LTD. (SUPRA) AFFIRMING THE DECISION OF FULL BENCH OF THE HON'BLE DELHI HIGH COURT HAS BEEN PLEASED TO HOLD THAT SEC. 147 OF THE ACT D OES NOT POSTULATE CONFERMENT OF POWERS UPON THE ASSESSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS UPON HIS MERE CHANGE OF OPINION. THE HO N'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. USHA INTERNATIONAL (SU PRA) HAS BEEN AGAIN PLEASED TO HOLD THAT THE REASSESSMENT PROCEEDINGS W ILL BE INVALID IN CASE THE ASSESSMENT ORDER ITSELF RECORDS THAT THE ISSUE WAS RAISED AND IS DECIDED IN FAVOUR OF THE ASSESSEE. REASSESSMENT PROCEEDINGS IN THE CASES WILL BE HIT BY THE PRINCIPLES OF CHANGE OF OPINION. REASSESSMENT PROCEEDINGS WILL BE INVALID IN CASE AN ISSUE OR QUERY IS RAISED AND ANS WERED BY THE ASSESSEE IN ORIGINAL ASSESSMENT PROCEEDINGS BUT THEREAFTER THE ASSESSING OFFICER DOES NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER. IN S UCH SITUATIONS, IT SHOULD BE ACCEPTED THAT THE ISSUE WAS EXAMINED BUT THE ASS ESSING OFFICER DID NOT FIND ANY GROUND OR REASON TO MAKE ADDITION OR REJEC T THE STAND OF THE ASSESSEE. HE FORMS AN OPINION. THE REASSESSMENT WIL L BE INVALID BECAUSE THE ASSESSING OFFICER HAD FORMED AN OPINION IN THE ORIG INAL ASSESSMENT, THOUGH HE HAD NOT RECORDED HIS REASONS. THE EXPRESSION CH ANGE OF OPINION 9 POSTULATES FORMATION OF OPINION AND THEN A CHANGE T HEREOF. THE HON'BLE HIGH COURT HELD FURTHER THAT A DISTINCTION MUST BE DRAWN BETWEEN ERRONEOUS APPLICATION/INTERPRETATION/UNDERSTANDING OF LAW AND CASES WHERE FRESH OR NEW FACTUAL INFORMATION COMES TO THE KNOWLEDGE OF THE A SSESSING OFFICER SUBSEQUENT TO THE PASSING OF THE ASSESSMENT ORDER. AGAIN IN THE CASE OF CIT VS. ORIENT CRAFT LTD. (SUPRA), THE HON'BLE JURISDIC TIONAL DELHI HIGH COURT AFTER DISCUSSING THE ISSUE IN DETAIL HAS COME TO TH E CONCLUSION THAT IN THAT CASE THE REASONS DISCLOSED THAT THE ASSESSING OFFIC ER REACHED A BELIEF THAT THERE WAS ESCAPEMENT OF INCOME ON GOING THROUGH TH E RETURN OF INCOME FILED BY THE ASSESSEE AFTER HE ACCEPTED THE RETURN UNDER SEC. 143(1) WITHOUT SCRUTINY, AND NOTHING MORE. THIS IS NOTHING BUT A R EVIEW OF THE EARLIER PROCEEDINGS AND AN ABUSE OF POWER BY THE ASSESSING OFFICER. IN THAT CASE ALSO, THERE WAS NO WHISPER IN THE REASONS RECORDED, OF ANY TANGIBLE MATERIAL WHICH CAME TO THE POSSESSION OF THE ASSESSING OFFIC ER SUBSEQUENT TO THE ISSUE OF THE INTIMATION. THE HON'BLE HIGH COURT HEL D THAT IT REFLECTS AN ARBITRARY EXERCISE OF THE POWERS CONFERRED UNDER SE C. 147 OF THE ACT. ALMOST SIMILAR ARE THE FACTS OF THE PRESENT CASE BEFORE US . THOUGH IN THE PRESENT CASE, ORIGINAL ASSESSMENT WAS FRAMED UNDER SEC. 143 (3) OF THE ACT AFTER COMPLIANCE OF FURNISHING OF THE DETAILS OF PROVISIO NS MADE FOR CONSTRUCTION EXPENSES AS ON 31.3.2000 WITH COPIES OF BILLS SUBMI TTED BY THE PARTIES 10 MENTIONED THEREIN (VIDE LETTER DATED 25.3.2003 OF T HE ASSESSEE ) AS REQUIRED BY THE ASSESSING OFFICER DURING THE COURSE ORIGINAL ASSESSMENT PROCEEDINGS. THE ASSESSEE COMPANY WAS ALSO REQUIRED UNDER THE AC CRUAL CONCEPT OF ACCOUNTING TO PROVIDE FOR ALL EXPENSES RELATED TO T HE CONSTRUCTION OF THE FLATS TILL 31.3.2000. IN COMPLIANCE, THE ASSESSEE HAD SUB MITTED THAT THIS PROVISION MADE WAS NOT AN AD HOC PROVISION BUT WAS MADE BASED ON THE INVOICES SUBMITTED BY THE VARIOUS CONTRACTORS WHO WERE ENGAG ED IN THE CONSTRUCTION ACTIVITY AND PAYMENT WAS ALSO MADE BY THE ASSESSEE COMPANY AGAINST SUCH BILLS. IN THE PRESENT CASE ALSO, AS IT IS EVIDENT F ROM THE REASONS RECORDED THAT THERE IS NO WHISPER OF ANY TANGIBLE MATERIAL WHICH CAME TO THE POSSESSION OF THE ASSESSING OFFICER SUBSEQUENT TO FRAMING OF THE ORIGINAL ASSESSMENT. WE THUS RESPECTFULLY FOLLOWING THE RATIOS LAID DOWN IN THE ABOVE CITED DECISIONS BY THE LEARNED AR HOLD THAT THE INITIATION OF REOPE NING PROCEEDINGS IN THE PRESENT CASE BY THE ASSESSING OFFICER UNDER SEC. 14 7 OF THE ACT WAS NOTHING BUT A REVIEW OF EARLIER PROCEEDINGS AND THUS AN ARB ITRARY EXERCISE OF THE POWERS CONFERRED UNDER SEC. 147 OF THE ACT. WE THU S CONCUR WITH THE CONTENTIONS OF THE LEARNED AR THAT THE REASSESSMENT IMPUGNED WAS NOTHING BUT CHANGE OF OPINION WHICH IS NOT PERMITTED UNDER THE PROVISIONS OF THE LAW UNDER SEC. 147 TO ACQUIRE JURISDICTION BY THE ASSES SING OFFICER TO INITIATE REOPENING PROCEEDINGS. IT IS ALSO PERTINENT TO DIS CUSS OVER HERE THAT THE 11 DECISIONS RELIED UPON BY THE LEARNED CIT(APPEALS) I N THE CASES OF GRUH FINANCE VS. CIT (SUPRA) AND CIT VS. S.R. TALWAR (SU PRA), HAVING DISTINGUISHABLE FACTS ARE NOT HELPFUL TO THE REVENU E. THE LEARNED CIT(APPEALS) HAS REJECTED THE CONTENTION OF THE ASS ESSEE ON THE VALIDITY OF REASSESSMENT PROCEEDINGS ON TWO COUNTS. FIRSTLY THA T SUFFICIENCY OF REASONS FOR REOPENING AND ASSESSMENT DOES NOT CALL FOR DETE RMINATION AT THE STAGE OF REOPENING ASSESSMENT AND SECONDLY THOUGH THE MATERI AL WERE AVAILABLE ON RECORD, THERE WAS NO CONSCIOUS CONSIDERATION OF THE SAME BECAUSE THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFICER AT THE TIME OF REGULAR ASSESSMENT PROCEEDINGS, THEREFORE, THERE WAS NO CHA NGE OF OPINION BY THE ASSESSING OFFICER. AS DISCUSSED ABOVE, THE FACTUAL FINDING OF THE LEARNED CIT(APPEALS) THAT THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFICER IS CONTRARY TO THE RECORD. HOWEVER, IT HAS BEEN FAI RLY ADMITTED BY THE LEARNED CIT(APPEALS) THAT THE MATERIALS WERE ALREAD Y AVAILABLE ON RECORD. THE FACTS IN THE CASE OF GRUH FINANCE VS. JCIT (SUP RA) ARE DIFFERENT AS IN THE PRESENT CASE, THE ASSESSING OFFICER HAD, IN FACT, C ONSIDERED THE ISSUE OF ALLOWABILITY OF PROVISIONS FOR CONSTRUCTION EXPENSE S. SIMILARLY, IN THE CASE OF SR TALWAR (SUPRA), IT WAS FOUND THAT THERE WAS FAIL URE ON THE PART OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS NECESSARY FOR A SSESSMENTS. THE ISSUE RAISED IN THE GROUNDS UNDER CONSIDERATION ON THE VA LIDITY OF INITIATION OF 12 REOPENING PROCEEDINGS AND FRAMING OF REASSESSMENT I N FURTHERANCE THERETO IS THUS DECIDED IN FAVOUR OF THE ASSESSEE WITH THIS FI NDING THAT THE REASSESSMENT BEING INVALID IS QUASHED. THESE GROUNDS ARE ACCORDI NGLY ALLOWED. 9. GROUND NOS. 2 TO 2.2 : IN THESE GROUNDS, THE VALIDITY OF DISALLOWANCES MADE HAS BEEN QUESTIONED. SINCE HEREINABOVE WE HAVE , WHILE DECIDING THE GROUND NOS. 1 TO 1.2, HELD THAT THE INITIATION OF R EOPENING PROCEEDINGS AND FRAMING OF REASSESSMENT IN FURTHERANCE THERETO WERE INVALID AND THE VERY REASSESSMENT HAS BEEN QUASHED, THE OTHER GROUNDS DO NOT SURVIVE AS THE SAME HAVE BECOME ACADEMIC ONLY. 10. IN RESULT, THE APPEAL IS ALLOWED. ITA NO. 3812/DEL/2010 : 11. THE REVENUE HAS IMPUGNED THE VALIDITY OF THE RE LIEF GIVEN BY THE LEARNED CIT(APPEALS) WHILE DELETING THE DISALLOWANC ES MADE BY THE ASSESSING OFFICER. 12. IN THE ABOVE APPEAL PREFERRED BY THE ASSESSEE A GAINST THE SAME FIRST APPELLATE ORDER ON THE ISSUE OF VALIDITY OF THE REA SSESSMENT ORDER, WE HAVE HELD THE REASSESSMENT AS INVALID AND THE SAME HAS B EEN QUASHED AS SUCH THE 13 REMAINING GROUNDS RAISED BY THE REVENUE IN THE PRES ENT APPEAL HAVE BECOME INFRUCTUOUS. THESE GROUNDS ARE ACCORDINGLY REJECTED . 13. IN RESULT, THE APPEAL IS DISMISSED. 14. IN SUMMARY, THE APPEAL PREFERRED BY THE ASSESSE E IS ALLOWED AND THAT PREFERRED BY THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 21 .05.201 5 SD/- SD/- ( N.K. SAINI ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 /05/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 14 DATE DRAFT DICTATED ON COMPUTER 20 .05.2015 DRAFT PLACED BEFORE AUTHOR 20 .05.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 21.05.2015 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 22.05.2015 KEPT FOR PRONOUNCEMENT ON 21.05.2015 FILE SENT TO THE BENCH CLERK 22.05.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.