DCIT, New Delhi V. M/s JCB India Limited, New Delhi

ITA 4714/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0032 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 28-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JATIN JINDAL
• Assessee Lawyers: MRS BANITA DEVI
• Keywords: Business expenditure
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH NEW DELHI, BENCH NEW DELHI, BENCH NEW DELHI, BENCH D DD D BEFORE SHRI R. P. TOLANI, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO. 4714 /DEL/2010 (ASSESSMENT YEAR 2001-02) DCIT, CIRCLE 4(1), VS. M/S. JCB INDIA LTD., NEW DELHI B-1/1-1, 2 ND FLOOR, MOHAN COOP. INDL. ESTATE, MATHURA ROAD, NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAACB0078P APPELLANT BY: SHRI JATIN JINDAL, C.A. RESPONDENT BY: MRS. BANITA DEVI, SR. DR ORDER ORDER ORDER ORDER PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: 1. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGA INST THE ORDER OF LD. CIT(A) VII, NEW DELHI DATED 08.09.2010 FOR THE ASSESSMENT YEAR 2001-02. THE GROUNDS RAISED BY TH E REVENUE ARE AS UNDER: 1) THE ORDER OF THE LD. CIT(A) IS ERRONEOUS & CON TRARY TO FACTS AND LAW. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN QUASHING THE PROCE EDINGS U/S 147/148 OF THE INCOME TAX ACT, 1961. 2.1) THE LD. CIT(A) IGNORED THE FACT THAT THE CASE OF THE ASSESSEE WAS REOPENED BY THE ASSESSING OFFICER AFTE R FOLLOWING THE PROCEDURE LAID DOWN BY LAW. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS BEEN IN DELETING THE ADDITI ON OF `26,50,830/- MADE BY THE ASSESSING OFFICER U/S 37(1 ) OF THE ACT WITHOUT GOING INTO THE MERITS OF THE ADDITION. 3.1) THE LD. CIT(A) IGNORED THE FACT THAT THE CLUB EXPENSES WERE NOT INCURRED EXCLUSIVELY FOR BUSINESS PURPOSES . 2. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT IN THIS CASE, THE ASSESSMENT WAS COMPLETED AFTER SCRUTINY U/S 250/143(3) IN THE MONTH OF SEP 2004 DETERMINING THE INCOME OF ` 53,54,39,446/-. T HE ASSESSING OFFICER HAS ALSO OBSERVED THAT ON EXAMINATION OF RE CORDS, IT IS REVEALED THAT FOLLOWING INCOME WAS ESCAPED.: THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF ` 26,50 ,830/- ON ACCOUNT OF EXPENDITURE ON CLUB, WHICH IS IN THE NAT URE OF NON BUSINESS EXPENDITURE. HENCE, THE SAME IS DISALLOWA BLE. THEREAFTER, IT IS OBSERVED BY THE ASSESSING OFFICER THAT IN VIEW OF THE REASONS RECORDED U/S 148, A NOTICE U/S 148 WAS ISSU ED TO THE ASSESSEE ON 31.03.2008 AFTER PRIOR APPROVAL OF LD. CIT, DELHI II, NEW DELHI. THEREAFTER, THE ASSESSING OFFICER HAS MADE ADDITION OF ` 26,50,830/- IN THE ASSESSMENT ORDER PASSED ON 17.11 .2008. AGAINST THIS ORDER PASSED BY THE ASSESSING OFFICER, THE ASS ESSEE PREFERRED AN APPEAL BEFORE CIT(A). IN ADDITION TO THE GROUND ON MERIT, THIS GROUND WAS ALSO RAISED BY THE ASSESSEE BEFORE CIT(A ) THAT REOPENING IS NOT VALID IN VIEW OF THE PROVISIONS OF SECTION 1 47 AS THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ORIGINAL ASSESSME NT. LD. CIT(A) HAS HELD THAT IN ASSESSMENT YEAR 2002-03 ALSO SIMILAR I SSUE WAS DECIDED BY HIM IN FAVOUR OF THE ASSESSEE AS PER ORDER DATED 21.06.2010 IN APPEAL NO.121/09-10. IN THIS YEAR ALSO, IT WAS HEL D BY LD. CIT(A) THAT THE ASSESSING OFFICER HAS NOT SHOWN ANYWHERE IN THE REASONS THAT HOW AND IN WHAT MANNER, THE ASSESSEE COMPANY FAILED IN DISCLOSING ALL MATERIAL FACTS FULLY AND TRULY. LD. CIT(A) HAS FOLLOWED HIS OWN ORDER PASSED BY HIM IN ASSESSMENT YEAR 2002-03 AND HELD IN THE PRESENT YEAR ALSO THAT REASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 147 IS WITHOUT THE AUTHORITY OF LAW AND THE SAME IS QUASHED BECAUSE THE FACTS AND CIRCUMSTANCES OF THE CASE ARE PERI MATERIA WITH THE CASE OF THE ASSESSEE IN ASSESSMENT YEAR 2002-03. NOW, THE REVENUE IS IN APPEAL BEFORE US. 3. LD. D.R. FOR THE REVENUE SUPPORTED THE ASSESSMEN T ORDER WHEREAS IT IS SUBMITTED BY THE LD. A.R. FOR THE ASS ESSEE THAT THE REASONS RECORDED BY THE ASSESSING OFFICER IN THE PR ESENT YEAR ARE AVAILABLE ON PAGE 18 OF THE PAPER BOOK AND IT CAN B E SEEN FROM THE SAME THAT THERE IS NO OBJECTION OF THE ASSESSING OF FICER IN THE REASONS THAT THE ASSESSEE FAILED TO DISCLOSE ALL MA TERIAL FACTS FULLY AND TRULY. IT IS ALSO SUBMITTED THAT ON PAGE 56-61 IS THE COPY OF THE TRIBUNAL ORDER IN THE ASSESSEES OWN CASE FOR THE A SSESSMENT YEAR 2002-03 IN I.T.A. NO. 3813/DEL/2010 DATED 11.10.201 0. IT IS SUBMITTED THAT IN THAT YEAR, THE TRIBUNAL HAS FOLLO WED THE JUDGEMENT OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF HARYA NA ACRYLIC MANUFACTURING CO. LTD. VS CIT 308 ITR 38 (DEL.). H E SUBMITTED THAT IN THE PRESENT YEAR ALSO, THE ISSUE INVOLVED IS SQU ARELY COVERED IN FAVOUR OF THE ASSESSEE BY THIS TRIBUNAL DEACON AND THAT OF THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND THE ORDERS OF AUTHORITIES BE LOW. WE FIND THAT IT HAS BEEN NOTED BY THE ASSESSING OFFICER ALSO IN THE ASSESSMENT ORDER THAT THE ASSESSMENT WAS COMPLETED BY HIM U/S 250/143(3) IN THE MONTH OF SEP 2004 AND HENCE, THE PROVISO TO SEC TION 147 IS APPLICABLE IN THE PRESENT CASE BECAUSE THE NOTICE U /S 148 WAS ISSUED BY THE ASSESSING OFFICER ON 31.03.2008 I.E. AFTER EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E. 2001-02. IT WAS HELD BY THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. LTD. VS CIT (SUPRA) THAT IN THE ABSENCE OF ANY OBJECTION IN THE REASONS RECORDED THAT ESCAPEME NT OF INCOME HAD OCCURRED BY REASON OF FAILURE ON THE PART OF TH E ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT, ANY ACTION BY THE ASSESSING OFFICER U/S 147 BEYOND FOUR YEARS PERIOD COULD BE WHOLLY WITHOUT JURISDICTION. IN THE PRESENT YEAR ALSO, WE HAVE SEEN THAT THERE IS NO WHISPER IN THE REASONS RECORDED BY THE ASSESSING OFFICER WHAT TO SPEAK OF ANY ALLEGATION, THAT THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT AND THAT BECAUSE OF THIS FAILURE, THERE HAS BEEN ESCAPEMENT OF INCOME CHARGEABLE TO T AX. UNDER THESE FACTS, THE TRIBUNAL DECISION IN THE ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2002-03 IS SQUARELY APPLICABLE AND ALSO THE JUDGEMENT OF HON'BLE HIGH COURT OF DELHI RENDERED I N THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. LTD. (SUPRA). RE SPECTFULLY FOLLOWINGS THE SAME, WE HOLD THAT THE ACTION TAKEN BY THE ASSESSING OFFICER U/S 147 BEYOND FOUR YEARS PERIOD IS WHOLLY WITHOUT ZJURISDICTION AND HENCE WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A). 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE CLOSE OF HEARING ON 30.03.2011. SD./- SD./- (R. P. TOLANI) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:30 TH MARCH, 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI