Ashley Investments Ltd., CHENNAI V. DCIT, CHENNAI

ITA 430/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61292 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-07-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 29-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI IRS
• Keywords: Retrospective amendment; Question of law; Reason to believe
• Section: 115JB; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER ITA NO.430(MDS)/2012 ASSESSMENT YEAR:2003-04 M/S.ASHLEY INVESTMENTS LTD., 1-SARDAR PATEL ROAD, GUINDY, CHENNAI-600 032. PAN AAACA9311K. VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE I(1), CHENNAI. (APPELLANT) (RESPONDENT) AND ITA NOS.431 & 432(MDS)/2012 ASSESSMENT YEARS : 2003-04 & 2007-08 M/S.ASHLEY HOLDINGS LTD., THE DEP UTY COMMISSIONER 1, SARDAR PATEL ROAD, VS. OF INCO ME-TAX, GUINDY, CHENNAI-600 032. COMPANY C IRCLE I(1), PAN AAACA9326J. CHENNAI . (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAROJ KUMAR PA RIDA, ADVOCATE RESPONDENT BY : SHRI T.N.BETGERI, IRS, JCIT DATE OF HEARING : 19 TH JULY, 2012 DATE OF PRONOUNCEMENT : 19 TH JULY, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THESE THREE APPEALS ARE FILED BY THE ASSESSEES. THE RELEVANT ASSESSMENT YEARS ARE 2003-04 AND 2007-08. - - ITA 430 TO 432 OF 2012 2 M/S.ASHLEY HOLDINGS LIMITED HAS FILED TWO APPEALS F OR THE ASSESSMENT YEARS 2003-04 AND 2007-08. M/S.ASHLEY INVESTMENTS LIMITED HAS FILED ONE APPEAL FOR THE AS SESSMENT YEAR 2003-04. 2. THESE APPEALS ARE DIRECTED AGAINST THE ORDERS O F THE COMMISSIONER OF INCOME-TAX(APPEALS)-III AT CHEN NAI, ALL DATED 15-12-2011. THE APPEALS ARISE OUT OF THE RES PECTIVE ASSESSMENTS COMPLETED UNDER SECTION 143(3), READ WI TH SECTION 147 OF THE INCOME-TAX ACT, 1961. 3. IN THESE CASES, THE REASSESSMENTS HAVE BEEN MAD E FOR ADDING BACK THE PROVISION FOR DIMINUTION IN THE VALUE OF SHARES MADE BY THE ASSESSEES. THE FINANCE ACT, 200 9 HAS AMENDED THE PROVISIONS OF SECTION 115JB WITH RETROS PECTIVE EFFECT FROM 1-4-2001 STATING THAT ANY AMOUNT SET AS IDE TOWARDS PROVISION FOR DIMINUTION IN THE VALUE OF SHARES HAS TO BE ADDED BACK TO THE BOOK PROFIT. IT IS IN THE LIGHT OF THE ABOVE STATUTORY AMENDMENT THAT THE ASSESSING OFFICER HAS RECORDED H IS REASON TO BELIEVE ESCAPEMENT OF INCOME AND INITIATED THE R EASSESSMENT PROCEEDINGS. - - ITA 430 TO 432 OF 2012 3 4. FOR THE ASSESSMENT YEAR 2003-04, IT IS CLEAR TH AT THE REASSESSMENTS HAVE BEEN MADE AFTER THE EXPIRY OF FO UR YEAR PERIOD. THE ORIGINAL ASSESSMENTS HAVE BEEN COMPLET ED UNDER SECTION 143(3). THE ASSESSEES HAD FURNISHED ALL TH E NECESSARY DETAILS FOR COMPLETING THE ASSESSMENTS. THERE WAS N O OMISSION ON THE PART OF THE ASSESSEES. THEREFORE, SUCH ASSE SSMENTS CANNOT BE REOPENED UNDER SECTION 147 AFTER A PERIOD OF FOUR YEARS. IN VIEW OF THE ABOVE LEGAL POSITION, THE AS SESSMENTS MADE IN THE CASES OF M/S.ASHLEY HOLDINGS LIMITED AN D M/S.ASHLEY INVESTMENTS LIMITED FOR THE ASSESSMENT Y EAR 2003-04 ARE BAD IN LAW. ACCORDINGLY, THE INCOME-ES CAPING ASSESSMENTS IN THESE TWO CASES ARE SET ASIDE. 5. AS FAR AS THE APPEAL FOR THE ASSESSMENT YEAR 2007-08 IS CONCERNED, THE REASSESSMENT HAS BEEN MAD E WITHIN A PERIOD OF FOUR YEARS AND, THEREFORE, NO QUESTION OF LAW ARISES AGAINST THE VALIDITY OF THE REASSESSMENT. THE REAS ON POINTED OUT BY THE ASSESSING OFFICER IS SUSTAINABLE IN LAW, AS THE REOPENING HAS BEEN MADE IN THE LIGHT OF THE AMENDMENT OF LAW WITH RETROSPECTIVE EFFECT. THEREFORE, WE UPHOLD THE ASS ESSMENT FOR THE ASSESSMENT YEAR 2007-08. - - ITA 430 TO 432 OF 2012 4 6. IN RESULT, THE APPEALS FOR THE ASSESSMENT YEAR 2003-04 ARE ALLOWED AND THE APPEAL FOR THE ASSESSME NT YEAR 2007-08 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 19 TH OF JULY, 2012 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 19TH JULY, 2012. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.