M/s. Poddar Dewki Ltd., Kolkata V. ITO, Ward - 5(2). Kolkata, Kolkata

ITA 413/KOL/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7227 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 10-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G N SINGH
• Assessee Lawyers: S K ROY
• Keywords: Business income
• Section: 148; 2

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : K OLKATA [ ( (( ( ) )) ) . . . . , ,, , ! ! ! ! . .. .'# '#'# '#. .. . , , , , $% $% $% $% ] ]] ] [BEFORE HONBLE SRI N. VIJAYAKUMARAN JM & HONBLE SRI C. D. RAO, AM] !' !' !' !' / I.T.A NOS. 413, 414 & 415/KOL/2011 () *+ () *+ () *+ () *+/ // / ASSESSMENT YEARS : 2001-02, 2002-03 & 2003-04 M/S. PODDAR DEWKI LIMITED -VS.- INCOME TAX OFFICER, WARD-5(2), KOLKATA [PAN : AABCP 7795 B] KOLKATA. [ -. -. -. -. /APPELLANT ] ]] ] [ /0-. /0-. /0-. /0-./ // / RESPONDENT ] ]] ] -. -. -. -. / FOR THE DEPARTMENT : 1 11 1 /SHRI G. N. SINGH /0-. /0-. /0-. /0-. / FOR THE ASSESSEE : 1 11 1 / SHRI S. K. ROY 2 3 #% 2 3 #% 2 3 #% 2 3 #% /DATE OF HEARING : 12.10.2011 4* 3 #% 4* 3 #% 4* 3 #% 4* 3 #% /DATE OF PRONOUNCEMENT : $5 /ORDER PER BENCH THESE THREE APPEALS ARE FOR THE ASSESSMENT YEARS 2 001-02, 2002-03 & 2003-04 OF THE ASSESSEE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-V I, KOLKATA DATED 14.12.2010. IN ALL THE APPEALS GROUND NOS. 1 TO 4 ARE RELATING TO THREE ASSESSMENT YEARS. FIRST, WE DEAL WITH VALIDITY OF REOPENING. 2. BY RELYING ON THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO & OTHERS REPORTED IN 259 ITR 1 9 (SC), LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE CONTENDED THAT SECTION 148 NOTICE IS I LLEGAL, INVALID AND WITHOUT JURISDICTION. LD. COUNSEL FURTHER CONTENDED THAT ASSESSING OFFICER DI D NOT DISCLOSE THE REASONS RECORDED FOR ISSUANCE OF NOTICE UNDER SECTION 148. FURTHER CONTE NTION OF THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE WAS THAT THE REASONS TO BE GIVEN IN VERBATIM AND HENCE, THE REASONS GIVEN BY THE ASSESSING OFFICER IS NOT SUFFICIENT TO MEET THE OBJ ECTION FOR REASSESSMENT PROPOSAL. [ITA NO. 413, 414 & 415/KOL/2011] 2 3. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THE REOPENING IS WITHIN JURISDICTIONAL VALIDITY WHICH IS IN ACCORDAN CE WITH LAW AS LAID DOWN BY THE HONBLE SUPREME COURT RATIO IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. [2007] 294 ITR 500 (SC). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. IT IS NOT DISPUTED FACT T HAT THE ORIGINAL ASSESSMENT IS AN INTIMATION UNDER SECTION 143(1) AS THE RETURN WAS PROCESSED UNDER TH AT SECTION ONLY FOR ALL THE THREE YEARS. THEREAFTER, ASSESSING OFFICER WAS OF THE OPINION TH AT BASED ON THE REGULAR ASSESSMENT COMPLETED FOR THE SUBSEQUENT ASSESSMENT YEAR 2004-05, THE LOA N AMOUNT BORE NO RELATIONSHIP TOWARDS ACQUISITION OF HOUSE PROPERTY. HENCE, INTEREST ON S UCH LOAN WAS NOT ALLOWED AND ON THE BASIS OF ABOVE OBSERVATION, ASSESSING OFFICER SLAPPED UNDER SECTION 148 NOTICE ON THE ASSESSEE. THAT BEING THE FACTUAL POSITION, THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUPRA) IS DIRECTLY ON THE P OINT AS RELIED BY THE LD. DEPARTMENTAL REPRESENTATIVE. HENCE, WE REJECT THE CONTENTION OF THE ASSESSEE AND CONFIRM THE ORDER OF LD. CIT(A) ON THE ISSUE OF REOPENING 5. COMING TO THE MERITS AS RIGHTLY POINTED OUT BY T HE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE, THE ASSESSEE IS SHOWING INCOME FOR THE RE LEVANT ASSESSMENT YEAR AS INCOME FROM HOUSE PROPERTY, BUSINESS INCOME AS WELL AS LONG TERM CAPITAL GAIN ON SALE OF SHARES. IT IS CONTENTION OF THE ASSESSEE THAT ASSETS SIDE OF THE ASSESSEE, THERE ARE TWO MAIN INVESTMENT, ONE ON HOUSE PROPERTY AND THE OTHER ONE ON SHARES AND THE UTILIZATION OF BORROWED MONEY ON THESE TWO INVESTMENTS. 5. AFTER DULY CONSIDERING THE RIVAL SUBMISSIO N, WE ARE OF THE VIEW THAT NEITHER THE LD. CIT(A) NOR THE ASSESSING OFFICER HAS DELIBERATED ON THE UTILIZATION OF THE BORROWED FUND IN ACQUIRING HOUSE PROPERTY AND IN MORE PARTICULAR, TH E APPLICATION OF BORROWED FUNDS WHETHER THEY WERE USED IN ACQUIRING SHARES NOT DELIBERATED UPON AND THAT BEING THE POSITION SITTING AS A SECOND APPELLATE AUTHORITY, WE COULD NOT ADJUDICATE THE IS SUE. HENCE, WE REVERSE THE FINDINGS OF THE AUTHORITIES BELOW AND REMIT BACK TO THE FILE OF ASS ESSING OFFICER WITH A DIRECTION TO PASS A SPEAKING ORDER ON THE FACTUAL POSITION OF UTILIZATI ON OF THE BORROWED FUNDS WHERE IT WAS ON THE HOUSE PROPERTY ALONE OR IN THE SHARE PURCHASE ALSO. AS RIGHTLY POINTED OUT, THAT THE TRIBUNAL ALSO [ITA NO. 413, 414 & 415/KOL/2011] 3 IN THE EARLIER OCCASION AS ENCLOSED IN ASSESSEES P APER BOOK AT PAGES 32 TO 36, B BENCH, KOLKATA VIDE ORDER DATED 04.08.2009 IN ASSESSEES O WN CASE, REMITTED THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. HENCE , THE SAME DIRECTION WILL BE ISSUED IN THESE THREE ASSESSMENT YEARS. HENCE, WE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. IT IS NE EDLESS TO MENTION THAT THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH AFTER GIVING SUFFICIENT OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE SHOULD ALSO COOPERATE WITH THE DEPARTMENT DURING ASSESSMENT PROCEEDINGS. 6. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. $5 $5 $5 $5 6 7 89 6 7 89 6 7 89 6 7 89 ORDER PRONOUNC ED IN THE COURT ON 14.10.2011. SD/- SD/- [ . .. .'# '#'# '#. .. . , ,, , $% $% $% $% ] [ . . . . , ,, , ] [ C. D. RAO ] [ N. VIJAYAKUMARA N ] ACCOUNTANT MEMBER JUDICIAL MEMBER (#%) DATED : 14TH OCTOBER, 2011. $5 3 /(( :$*/ COPY OF THE ORDER FORWARDED TO: 1. -. /APPELLANT- M/S. PODDAR DEWKI LIMITED, 28/2, SHA KESPEARE SARANI, KOLKATA-700 017. 2 /0-. / RESPONDENT : INCOME TAX OFFICER/WARD-5(2), P-7, C HOWRINGHEE SQUARE, KOLKATA-700 069. 3. (5/ THE CIT, 4. (5 ()/ THE CIT(A), KOLKATA. 5. @(7 /(/ DR, KOLKATA BENCHES, KOLKATA [0 /(/ TRUE COPY] $5 / BY ORDER, B / ! /DEPUTY/ASSTT REGISTRAR. [KKC CD (E (F /SR.PS]