The A.C.I.T, Jalandhar V. Smt. Baljit Kaur, Sangha, Jalandhar

ITA 423/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5712 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 26-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: J S BHASIN
• Keywords: Unexplained investment; Tangible material
• Section: 80HHC; 80IB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO. 423(ASR)/2010 ASSESSMENT YEAR:2003-04 PAN :ALNPS8308K THE ASSTT. COMMR. OF INCOME-TAX, VS. SMT. BALJIT KA UR SANGHA, PROP. RANGE-IV, JALANDHAR. VILL. PATTI KHAS, VILL. KALASANGHIAN, DISTT. JALANDHAR. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. AMRIK CHAND, DR ASSESSEE BY: SH. J.S. BHASIN, ADV. ORDER PER MEHAR SINGH, AM, THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER OF THE CIT(A), JALANDHAR, DATED 20.08.2010, PASSED UNDER SECTION 250(6) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO IN SHORT THE ACT), FOR THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE CIT(A), HAS ERRED IN CANCELING THE A SSESSMENT ORDER HOLDING THAT THE A.O. HAS WRONGLY ASSUMED JURISDIC TION UNDER SECTION 147 OF THE INCOME-TAX ACT, 1961. 1A. WHILE DOING SO THE LD. CIT(A) HAS FAILED TO APP RECIATE THE FACTS THAT THERE IS TANGIBLE MATERIAL FOR INITIATION OF R EASSESSMENT PROCEEDINGS IN VIEW OF THE DECISION OF ITAT AMRITSA R BENCH, IN THE CASE OF SHITAL FIBRES LTD. WHEREIN IT HAS BEEN HELD THAT DEDUCTION UNDER SECTION 80IB OF THE INCOME-TAX ACT, 1961 IS TO BE COMPUTED AFTER NETTING THE DEDUCTION ALLOWABLE UNDER SECTION 80HHC OF THE ACT. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 3. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AN D DISPOSED OF. 3. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS THAT THE LD. CIT(A) ERRED IN CANCELING THE ASSESSMENT ORDER HOLD ING THAT THE AO HAS WRONGLY ASSUMED JURISDICTION UNDER SECTION 147 OF T HE ACT. IN THIS CASE, THE AO, ISSUED NOTICE U/S 148 OF THE ACT, ON 5.2.20 09 AFTER RECORDING REASONS FOR INITIATING PROCEEDINGS U/S 147 OF THE A CT. THE REASONS WHICH HAVE BEEN REPRODUCED IN THE APPELLATE ORDER UNDER A PPEAL, BRIEFLY ARE THAT DEDUCTION U/S 80IB WAS NOT ALLOWABLE ON VARIOUS IT EMS OF INCOME CREDITED TO P&L A/C SINCE THEY WERE NOT DERIVED FR OM THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE. SUCH INCOMES WERE DUTY DRAWBACK, FREIGHT OUTWARDS, INTEREST ON FIXED DEPOSIT AND EXPORT INCE NTIVES TOTALING RS.75,19,936/-. THE A.O. ALSO NOTED IN THE REASON S THAT DEDUCTION U/S 80IB HAD TO BE ALLOWED AFTER NETTING THE DEDUCTION ALLOWED UNDER SECTION 80HHC OF THE ACT. THUS, HE HELD THAT NO DEDUCTION U /S 80IB WAS ALLOWABLE TO THE ASSESSEE. THE AO ALSO NOTED THAT THE ASSESSEE HAD CONSTRUCTED A FACTORY BUILDING DURING THE FINANCIA L YEAR 2001-02 TO 2004- 05, WHOSE COST OF CONSTRUCTION WAS DECLARED AT RS.9 ,71,350/-. THE AO HAD ALSO REFERRED THE MATTER OF VALUATION OF COST O F CONSTRUCTION OF THE BUILDING TO THE DVO U/S 142A OF THE ACT. THE COST O F CONSTRUCTION IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2003-04 H AD BEEN WORKED OUT AT RS.19,45,400/- BY THE DVO AGAINST RS.16,88,730/- DECLARED BY THE ASSESSEE. THE DIFFERENCE OF RS.2,56,670/- WAS HELD BY THE AO IN THE REASONS RECORDED TO BE UNEXPLAINED INVESTMENT OF TH E ASSESSEE IN THE FACTORY BUILDING. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. IN THE RESULT, THE APPEAL FILE BY THE DECISION PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2011. (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 17 TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE: 2. THE 3. THE CIT(A), 4. THE CIT, 5. THE SR DR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.