Appeal details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 88414 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 8 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-02-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
I
Next Hearing Date
12-02-2015
Assessment Year
2002-2003
Appeal Filed On
29-05-2013
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL I BE NCH, MUMBAI , !' $ $ $ $ % & ' , !' ( BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I .T.A. NO. 4282/MUM/2013 ( ) ) ) ) / ASSESSMENT YEAR : 2002-03 THE DCIT 10(1), ROOM NO.607, 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 / VS. M/S. ICICI BANK LTD. ICICI BANK TOWERS, BANDRA KURLA COMPLEX, MUMBAI 400051 '* ./ +, ./ PAN/GIR NO. : AAACI 1195H ( *- / APPELLANT ) .. ( ./*- / RESPONDENT ) REVENUE BY SHRI KISHAN VYAS ASSESSEE BY MS. AARTI VISSANJI 0 %1 / DATE OF HEARING :12.02.2015 23) 0 %1 / DATE OF PRONOUNCEMENT:18.02.2015 !& / O R D E R PER N.K.BILLAIYA, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-7, MUMBAI DATED 4/12/2012 PERTAINING TO ASS ESSMENT YEAR 2002- 03. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN LAW IN HOLDING THAT THE REOPENI NG OF ASSESSMENT DONE BY THE AO IS NOT CORRECT IN VIEW OF SECTION 147 R.W . EXPLANATION-1 AND EXPLANATION 2(C)(I) , (III) AND (IV) OF THE INCOME TAX ACT, 1961 (THE ACT). ./I .T.A. NO. 4282/MUM/2013 ( ) ) ) ) / ASSESSMENT YEAR : 2002-03 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ORIGINAL RETURN WAS FILED ON 31/10/2002 DECLARING TOTAL INCOME AT RS.35 1.21 CRORES. THE ASSESSMENT WAS COMPLETED ON 25/2/2005 DETERMINING T HE TOTAL INCOME AT RS.899.06 CRORES. THEREAFTER ASSESSMENT WAS REOPEN ED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 OF T HE ACT DATED 26/03/2007. THE REASONS FOR REOPENING OF THE ASSES SMENT READ AS UNDER: THE ASSESSEE COMPANY HAD CLAIMED DEDUCTION OF RS.3,39,96,92,465/- AS MISC. EXPENDITURE. THIS AM OUNT WAS NOT PASSED TO THE P&L A/C. THE AO DISALLOWED ONLY RS.2,42,22,50,540/- ON ACCOUNT OF ISSUE EXPENSES ON RUPEE LOAN/DEBENTURE/FIXED DEPOSITS AND FOREIGN CURRENCY LOAN AND BALANCE AMOUNT OF RS.97,74,41,925/- REMAINED TO BE DISALLOWED. AS THIS EXPENDITURE WAS NOT ROUTED THROUGH THE P&L A/C. THE SAME WAS NOT SUBJECTED TO SCRUTINY OF THE STATUTORY AUDI TORS OF THE ASSESSEE COMPANY NOR THE RELEVANT EVIDENCES FOR ALL OWABILITY OF THE SAME WERE SUBMITTED BEFORE THE ASSESSING OFFICER FO R PROPER VERIFICATION. 2.1 THEREAFTER, THE ASSESSEE ATTENDED THE PROCEEDI NGS AND REPLIED TO THE QUERIES OF THE AO. AFTER CONSIDERING REPLIES FILED BY THE ASSESSEE, THE AO FINALLY COMPLETED THE ASSESSMENT BY MAKING A DDITION ON ACCOUNT OF MISCELLANEOUS EXPENSES AT RS.97.74 CRORES. 2.2 AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFO RE LD. CIT(A). BEFORE LD. CIT(A) IT WAS STRONGLY CONTENDED THAT TH E REOPENING WAS ERRONEOUS AND BAD IN LAW AND NOT IN ACCORDANCE WITH THE SETTLED PRINCIPLES OF THE LAW. IT WAS EXPLAINED TO LD. CIT(A) THAT TH E COMPLETE DISCLOSURE WAS MADE BY THE ASSESSEE UNDER THE HEAD NOTES FORM ING PART OF ACCOUNTS WHERE THE CLAIM OF SUCH EXPENSES HAS BEEN DETAILED. . IT WAS CONTENDED THAT THE ASSESSEE HAD PROPER DISCLOSURE ON THE RELE VANT ISSUE. AFTER ./I .T.A. NO. 4282/MUM/2013 ( ) ) ) ) / ASSESSMENT YEAR : 2002-03 3 CONSIDERING THE FACTS AND THE SUBMISSIONS THE LD. CIT(A) OBSERVED AS UNDER: I ALSO FIND THAT THE DETAILS RELATED TO THE CLAIM MADE BY THE APPELLANT BANK WERE ANNEXED WITH THE RETURN OF INCO ME IN THE FORM OF STATEMENT 11 & 14 FILED BY THE APPELLANT BANK. H ENCE, I AM OF THE CONSIDERED VIEW THAT ISSUE INVOLVED IN THIS APP EAL, WHICH RESULTED REOPENING OF ASSESSMENT WAS VERY WELL DELI BERATED BY THE A.O. AT THE TIME OF ORIGINAL ASSESSMENT PASSED U/S 143(3) OF THE ACT AS PER PARA-7 OF THE ASSESSMENT ORDER AND ALSO DULY DISCLOSED BY THE APPELLANT BANK. IN VIEW OF THE SAME AND ALSO AF TER TAKING NOTE OF APEX COURT DECISION IN THE CASE OF CIT VS. KELVI NATOR INDIA LTD. REPORTED IN 325 ITR PAGE 56 & THE DECISION OF JURIS DICTIONAL HIGH COURT DECISION, WHICH HAS BEEN TAKEN NOTE BY THE HO NBLE BOMBAY HIGH COURT IN THE APPELLANTS OWN CASE ITSELF BY IT A NO.1237 OF 2011 DATED 09/107/2012, I HAVE NO HESITATION TO HOL D THAT REOPENING OF ASSESSMENT IS MERELY BASED ON CHANGE O F OPINION IN THE APPELLANTS CASE, WHICH IS NOT BASED ON ANY TAN GIBLE MATERIAL IN THE POSSESSION OF THE A.O. HENCE, IN THIS BACKGROU ND OF THE APPELLANTS CASE, I CONSIDER IT PROPER AND APPROPRI ATE TO HOLD THAT REOPENING OF ORIGINAL ASSESSMENT, WHICH WAS PASSED BY THE A.O. IS NOT JUSTIFIED. HENCE THE REASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) R.W.S 147 IS ANNULLED. THUS, APPELLANTS THI S GROUND OF APPEAL IS ALLOWED. 3. AGGRIEVED BY THIS THE REVENUE IS BEFORE US. LD . DR STRONGLY SUPPORTED THE ASSESSMENT ORDER. 4. LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE LOWER AUTHORITIES. 5. IN THE NOTES FORMING PART OF ACCOUNTS IT IS PROV IDED AS UNDER: 1. THE BOARD OF ICICI LIMITED AT ITS MEETING ON O CTOBER 25, 2001 DECIDED TO MERGE ICICI LIMITED WITH ICICI BANK LIM ITED, SUBJECT TO SEVERAL APPROVALS INCLUDING THOSE OF THE RESERVE BANK OF INDIA, SHAREHOLDERS AND THE HIGH COURTS, WHICH HAVE SINCE BEEN RECEIVED. THE APPOINTED DATE OF THE MERGER IS MARCH 30, 2002 AND ICICI LIMITED HAS CEASED TO EXIST WITH EFFECT FROM THE APPOINTED DATE. ./I .T.A. NO. 4282/MUM/2013 ( ) ) ) ) / ASSESSMENT YEAR : 2002-03 4 ACCORDINGLY THE ACCOUNTS OF ERSTWHILE ICICI LIMITED HAVE BEEN PREPARED FOR THE PERIOD ENDED MARCH 29, 2002 FOR CO MPLIANCE WITH REQUIREMENTS OF 1NCONE TAX ACT, 1961 BY THE MERGED ICICI BANK LIMITED. IN VIEW OF THE MERGER THE BALANCE OF DEFERRED REVEN UE EXPENDITURE AS ON MARCH 29, 2002 AGGREGATING TO RS.3 799 MILLIO N, WHICH WOULD HAVE BEEN AMORTISED TO THE PROFIT AND LOSS AC COUNT IN THE FUTURE, HAS BEEN WRITTEN OFF BY DIRECT DEBIT TO THE GENERAL RESERVE. FURTHER A PROVISION OF RS.7074.9 MILLION HAS BEEN M ADE AGAINST INVESTMENTS IN EQUITY SHARES TO ENSURE THAT THE INV ESTMENTS OF ICICI LTD. ARE VALUED IN ACCORDANCE WITH VALUATION NORMS APPLICABLE TO BANKS BY DIRECT DEBIT TO CAPITAL RESERVE/GENERAL RE SERVE. FIGURES THE PREVIOUS YEAR ARE NOT COMPARABLE WITH T HE CURRENT PERIOD FIGURES FOR 363 DAYS. 5.1 IT IS APPARENT THAT A DETAILED DISCLOSURE WAS MADE BY THE ASSESSEE IN RELATION TO THE CLAIM OF EXPENDITURE. REOPENING THE ASSESSMENT ON THE VERY SAME SET OF FACTS WHICH WERE VERY MUCH AVAILAB LE AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS IS NOTHING BUT A CH ANGE OF OPINION. IN OUR CONSIDERED OPINION ONE NEEDS TO GIVE A SCHEMA TIC INTERPRETATION OF THE WORDS REASON TO BELIEVE FAILING WHICH, SECT ION 147 WOULD GIVE ARBITRARY POWERS TO THE AO TO REOPEN THE ASSESSMENT ON THE BASIS OF MERE CHANGE OF OPINION, WHICH CANNOT BE PER SE R EASON TO REOPEN. THERE IS CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO REASSESS. THE AO HAS NO POWER TO REVIEW, HE HAS THE POWER TO RE-ASSESS. BUT ASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN CONDITIONS AND IF THE CONCEPT OF CHANGE OF OPINION IS REMOVED, THEN, IN THE GARB OF REOPENING OF ASSESSMENT, REVIEW WOULD TAKE PLACE. HONBLE SUPREME COURT IN THE CASE OF CIT VS.KELVINATOR OF INDIA IN DIA, 320 ITR 561 HAS HELD THAT THE AO MUST HAVE SOME TANGIBLE MATERIAL F OR REOPENING THE ./I .T.A. NO. 4282/MUM/2013 ( ) ) ) ) / ASSESSMENT YEAR : 2002-03 5 ASSESSMENT. IN THE CASE IN HAND, WE DO NOT FIND A NY NEW TANGIBLE MATERIAL EVIDENCE ON THE BASIS OF WHICH THE AO HAS REOPENED THE ASSESSMENT. LD. CIT(A) HAS RIGHTLY FOLLOWED THE DE CISION OF THE HONBLE SUPREME COURT (SUPRA). LD. CIT(A) HAS ALSO OBSERVE D ON SIMILAR FACTS THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CAS E IN ITA 1237 OF 2011 DATED 9/10/2012 FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT HAS QUASHED THE REOPENING PROCEEDINGS. WE, T HEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF LD. C IT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 18 TH DAY OF FEB. 2015. SD/- SD/- (AMIT SHUKLA ) (N.K. BILLAIYA) !' /JUDICIAL MEMBER !' / ACCOUNTANT MEMBER MUMBAI; 4! DATED : 18. 02.2015 . . ./ VM , SR. PS !& !& !& !& 0 00 0 .% .% .% .% 5)% 5)% 5)% 5)% / COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 78 .% , , / DR, ITAT, MUMBAI 6. 89 : / GUARD FILE. !& !& !& !& / BY ORDER, /% .% //TRUE COPY// ; ;; ; / < < < < + + + + (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
