Smt T.C.Usha, Kollam V. DCIT, Kollam

ITA 465/COCH/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58290 (ITAT-COCHIN)
• Duration Of Justice: 4 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 27-02-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 22-05-2007
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: T V HARIHARAN
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion; Set aside
• Section: 143(3); 80HHC; 147; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NO. 465/COCH/2007 ASSESSMENT YEAR: 2001-02 SMT. T.C. USHA, PROP: CHETHANA CASHEW CORPORATION, KOCHUPILAMMOODU, KOLLAM. [ PAN: ACDPC 7638P] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLLAM. (ASSESSEE -APPELLANT) (REVENUE -RE SPONDENT) ASSESSEE BY SHRI T.V.HARIHARAN, CA REVENUE BY SMT. VIJAYAPRABHA, JR. DR DATE OF HEARING 27/02/2012 DATE OF PRONOUNCEMENT 02/03/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26-02-2007 PASSED BY LD CIT(A)-1, KOCHI AND IT RELATES TO THE ASSESSM ENT YEAR 2001-02. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE RELAT ED TO THE FOLLOWING ISSUES:- (A) VALIDITY OF RE-OPENING OF ASSESSMENT U/S 147 O F THE ACT. (B) DEDUCTION U/S 80HHC OF THE ACT ON DEPB RECEIP TS. (C) SET OFF OF NEGATIVE PROFIT AGAINST OTHER POSIT IVE INCOME FOR THE PURPOSES OF DEDUCTION U/S 80HHC OF THE ACT. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE IS A CASHEW EXPORTER. THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS ORIGINALLY COMPLETED U/S 143(3) OF THE ACT. THERE AFTER THE AO NOTICED CERTAIN MISTAK ES IN THE COMPUTATION OF DEDUCTION U/S 80HHC OF THE ACT AND HENCE RE-OPENED THE ASSESSMENT U/S 147 OF THE ACT BY ISSUING I.T.A. NO. 465/COCH/2007 2 NOTICE U/S 148 OF THE ACT ON 20-01-2004. THE AO DE NIED DEDUCTION U/S 80HHC IN RESPECT OF DEPB RECEIPTS. FURTHER THE NEGATIVE EXP ORT PROFIT WAS SET OFF AGAINST THE POSITIVE INCOME FOR THE PURPOSE OF COMPUTING DEDUCT ION U/S 80HHC OF THE ACT. THE ASSESSEE COULD NOT SUCCEED ON THE ABOVE SAID TWO PO INTS IN THE APPEAL FILED BEFORE LD CIT(A) AND HENCE IT IS IN APPEAL BEFORE US. 4. BEFORE US, THE ASSESSEE HAS RAISED A GROUND CHALLENGING THE VALIDITY OF RE-OPENING OF THE ASSESSMENT ON THE FOLLOWING GROUNDS:- (A) THE AO DID NOT COMMUNICATE THE REASONS FOR RE- OPENING IN RESPONSE TO THE SPECIFIC LETTER FILED BY THE ASSESSEE. (B) ALL THE INFORMATION WAS ALREADY AVAILABLE ON RECORD AND HENCE THE RE-OPENING IS ONLY ON ACCOUNT OF MERE CHANGE OF OPINION. IN THIS REGARD, THE ASSESSEE HAS RELIED UPON THE DECISION OF DELHI HIGH COURT REPORT ED IN (2010) (321 ITR 544) AND ALSO ANOTHER DECISION OF DELHI HIGH COURT REPORTED IN (2010)(321 ITR 431). 4.1 WE HAVE HEARD THE PARTIES ON THIS ISSUE. A DMITTEDLY THE REOPENING OF ASSESSMENT HAS BEEN DONE WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. HENCE THE FIRST PROVISO TO SECTION 147 SHALL NOT APPLY TO THE INSTA NT CASE. THE AO HAS NOTICED CERTAIN MISTAKES IN THE COMPUTATION OF DEDUCTION U/S 80HHC OF THE ACT WHICH HAS RESULTED IN ESCAPEMENT OF INCOME AND HENCE HE HAS REOPENED THE ASSESSMENT. IT IS NOT SHOWN TO US THAT THE AO HAD TAKEN A PARTICULAR PLAUSIBLE VIEW I N THE ORIGINAL ASSESSMENT PROCEEDINGS, WHICH WOULD HAVE ENABLED US TO APPRECIATE THE ALLEG ATION OF THE ASSESSEE THAT THE PRESENT ACTION WAS ON ACCOUNT OF MERE CHANGE OF OPINION. IN VIEW OF THE FACTUAL POSITION DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE CASE L AW RELIED UPON BY LD A.R ARE DISTINGUISHABLE. WITH REGARD TO THE CLAIM OF NON-CO MMUNICATION OF REASONS FOR RE- OPENING, WE NOTICE THAT THE AO HAS NOTED THE FACT O F REQUEST FROM THE ASSESSEE SEEKING THE REASON BEHIND REOPENING OF ASSESSMENT. HOWEVER , THE AO DID NOT ELABORATE FURTHER WITH REGARD TO THE SUPPLY OF THE INFORMATION SOUGHT FOR. HOWEVER, ACCORDING TO THE LD D.R, THE REASON FOR REOPENING WAS COMMUNICATED TO T HE ASSESSEE. THE LD A.R DID NOT BRING ANY MATERIAL ON RECORD TO REFUTE THE SAID STA ND OF THE LD D.R. FURTHER THE LD A.R DID NOT DEMONSTRATE AS TO HOW THE NON-COMMUNICATION OF REASONS, IF ANY, HAS CAUSED I.T.A. NO. 465/COCH/2007 3 PREJUDICE TO THE ASSESSEE. AS CONTENDED BY LD D.R, THE ASSESSEE HAS NOT TAKEN ANY GROUND ON THIS ISSUE BEFORE LD CIT(A). UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THE CONTENTIONS OF THE ASSESSEE CHALLENGIN G THE VALIDITY OF RE-OPENING OF ASSESSMENT. 5. THE NEXT ISSUE RELATES TO THE TAXABILITY AS WELL AS DEDUCTION OF DEPB RECEIPTS U/S 80HHC OF THE ACT. BOTH THE PARTIES AGREED THAT THI S ISSUE NEEDS TO BE EXAMINED AFRESH IN THE LIGHT OF THE DECISION DATED 09-2-2012 RENDERED BY HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS. ACCORDINGLY, WE SET ASIDE TH E ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH A D IRECTION TO EXAMINE THIS ISSUE AFRESH IN ACCORDANCE WITH THE DECISION RENDERED IN THE CASE O F TOPMAN EXPORTS, REFERRED SUPRA. 6. THE NEXT ISSUE RELATES TO THE ISSUE OF SETTI NG OFF OF NEGATIVE PROFITS AGAINST POSITIVE INCOME FOR THE PURPOSE OF DEDUCTION U/S 80HHC OF TH E ACT. THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF IPCA LABORATORY VS. DCIT (266 ITR 521). WE NOTICE THAT THE LD CIT(A) H AS FOLLOWED THE SAID DECISION AND HENCE WE DO NOT FIND ANY REASON TO INTERFERE WITH H IS ORDER ON THIS ISSUE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 02-03-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 2ND MARCH, 2012 GJ COPY TO: 1. SMT. T.C. USHA, PROP: CHETHANA CASHEW CORPORATIO N, KOCHUPILAMMOODU, KOLLAM. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE, KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. I.T.A. NO. 465/COCH/2007 4 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN