M/s. Deogarh Resorts, JODHPUR V. ITO, JODHPUR

ITA 449/JODH/2010

• Counselvise Citation: 44923314 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 26-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Keywords: Difference of opinion; Change of opinion; Revenue expenditure; Reassessment proceedings
• Section: 143(3); 234B; 148; 154

Judgement Text

1 ITA 449-10 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 449/JODH/2010 ASSTT. YEAR : 2004-05. M/S. DEOGARH RESORTS, VS. THE INCOME-TAX OFFICER, PANCHWATI COLONY, JODHPUR. WARD 1(2), JODHPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT KOTHARI RESPONDENT BY : SHRI G.R. KOKANI DATE OF HEARING : 14.12.2011. DATE OF PRONOUNCEMENT : 15.12.2011. ORDER DATED : 15/12/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2004-05. 2. GROUND NOS. 1 TO 3 ARE AGAINST SUSTAINING PROCEE DINGS INITIATED UNDER SECTION 148 AND REMAINING GROUNDS ARE ON MERIT. 3. THE ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3) ORIGINALLY. THE ISSUE IN RESPECT OF EXPENDITURE OF RS. 4,27,591/- W AS ALLOWED AS REVENUE AND DEDUCTION UNDER SECTION 80HHD IN RESPECT OF GROSS INTEREST RE CEIVED ON FDR WAS ALSO ALLOWED. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UND ER SECTION 154 DATED 10.3.2008 WHEREBY IT WAS STATED THAT THE EXPENDITURE CLAIMED IN RESPECT OF BUILDING EXPENSES ARE 2 CAPITAL IN NATURE. A DETAILED REPLY WAS FILED BY T HE ASSESSEE, COPY OF WHICH IS PLACED AT PAGES 46 TO 54 OF THE PAPER BOOK. THEREAFTER, THE A SSESSING OFFICER ISSUED ANOTHER NOTICE UNDER SECTION 154 BY WHICH IT WAS STATED THAT DEDUC TION UNDER SECTION 80HHD HAS BEEN WRONGLY ALLOWED. AGAIN ASSESSEE FILED REPLY, COPY O F WHICH IS PLACED AT PAGE 55. HOWEVER, NO ORDER UNDER SECTION 154 WAS PASSED BY A SSESSING OFFICER. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 A FTER RECORDING THE REASONS THAT DEDUCTION ON ACCOUNT OF BUILDING EXPENDITURE AND DE DUCTION UNDER SECTION 80HHD IS WRONGLY ALLOWED. COPY OF REASONS RECORDED IS PLACED AT PAGES 60 AND 61. THEREAFTER, REASSESSMENT PROCEEDINGS WERE STARTED AND ADDITION OF RS. 4,27,591/- WAS MADE TREATING THE BUILDING EXPENDITURE AS CAPITAL IN NATURE AND D EPRECIATION ON THE SAME WAS ALLOWED AND IN RESPECT TO FDR INTEREST DEDUCTION UNDER SECT ION 80HHD WAS WITHDRAWN FOR RS. 43,473/-. INTEREST UNDER SECTION 234A, 234B AND 234 C WERE ALSO CHARGED. THE LD. CIT (A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFIC ER. 4. THE ASSESSEE RELIED UPON THE DETAILED WRITTEN SU BMISSIONS FILED BEFORE LD. CIT (A) AND IT WAS STATED THAT BOTH THE ISSUES HAVE ALREADY BEEN EXAMINED BY THE ASSESSING OFFICER DURING ORIGINAL ASSESSMENT PROCEEDINGS. T HEREFORE, NOW ISSUING NOTICE UNDER SECTION 154 OR ISSUING NOTICE UNDER SECTION 148 ARE ONLY ON ACCOUNT OF CHANGE OF OPINION, WHICH IS NOT PERMISSIBLE. 5. ON THE OTHER HAND, THE LD. D/R PLACED RELIANCE O N THE ORDERS OF ASSESSING OFFICER AND LD. CIT (A). 6. AFTER CONSIDERING THE SUBMISSIONS AND OTHER MATE RIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED ON LEGAL GROUND ITSELF . IT IS SEEN THAT ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AND ALL THE DETA ILS REQUIRED BY THE ASSESSING OFFICER 3 WERE FILED AND THEY WERE EXAMINED AND THEN ONLY THE EXPENDITURE CLAIMED ON BUILDING WAS TREATED AS REVENUE EXPENDITURE AND IN SIMILAR F ASHION THE DEDUCTION UNDER SECTION 80HHDWAS ALLOWED. NOW ISSUING NOTICE UNDER SECTION 154 OR UNDER SECTION 148, IN OUR VIEW, ARE ONLY ON ACCOUNT OF CHANGE OF OPINION AS T HERE WAS NO FRESH MATERIAL WITH THE ASSESSING OFFICER TO FORM A OPINION THAT ANY INCOME HAS ESCAPED ASSESSMENT. VARIOUS CASES RELIED UPON BY LD. A/R AS MENTIONED IN THE WR ITTEN SUBMISSIONS FILED BEFORE LD. CIT (A) GOES IN FAVOUR OF THE ASSESSEE. EVEN THE ISSUE IN RESPECT OF EXPENDITURE ON BUILDING IS A DEBATABLE THAT WHETHER THE EXPENDITURE IS REVENUE IN NATURE OR CAPITAL IN NATURE. A VIEW HAS BEEN EXPRESSED BY THE ASSESSING OFFICER WHILE P ASSING ASSESSMENT UNDER SECTION 143(3) THAT THE EXPENDITURES ARE REVENUE IN NATURE. THEREFORE, ISSUANCE OF NOTICE UNDER SECTION 148 WAS WITHOUT ANY MATERIAL. SIMILARLY IN RESPECT OF DEDUCTION UNDER SECTION 80HHD WHICH WAS EXAMINED DURING THE ORIGINAL ASSESS MENT PROCEEDINGS AND, THEREFORE, ISSUANCE OF NOTICE UNDER SECTION 148 ON THIS ISSUE WAS WITHOUT ANY MATERIAL. AS STATED ABOVE THAT THERE WAS NO FRESH MATERIAL WITH THE ASS ESSING OFFICER TO FORM AN OPINION THAT ANY INCOME HAS ESCAPED ASSESSMENT, THEREFORE, WE HO LD THAT ISSUANCE OF NOTICE UNDER SECTION 148 WAS BAD IN LAW AND ACCORDINGLY REASSESS MENT PROCEEDINGS ARE QUASHED. SINCE WE HAVE ALLOWED THE LEGAL GROUND IN FAVOUR OF THE A SSESSEE, THEREFORE, WE ARE NOT INCLINED TO DISPOSE OFF THE OTHER GROUNDS ON MERIT AT THIS S TAGE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 8. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15. 12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, 4 COPY FORWARDED TO :- M/S. DEOGARH RESORTS, JODHPUR. THE ITO WARD 1(2), JODHPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 449/JODH/2010) BY ORDER, AR ITAT JODHPUR.