SURYDARSHAN CO -OP HSG SOC. LTD, MUMBAI V. ITO 16(1)(2), MUMBAI

ITA 5092/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2047 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 16-10-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 09-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI , , ! ! ! ! , ' ' ' ' BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.AS. NO.5092 TO 5094/MUM/2012 ( !# $ / ASSESSMENT YEARS :2002-04 TO 2004-05) SURYADARSHAN CO - OP HSG SOC.LTD., 44/50, WALKESHWAR ROAD, WALKESHWAR, MUMBAI-400006. # # # # / VS. INCOME TAX OFFICER - 16(1)(2), MUMBAI. ( %& / APPELLANT) .. ( '(%& / RESPONDENT) % ./ ) ./PAN/GIR NO. :AAAAS8337B %& * / APPELLANT BY S/ SHRI FIROZE ANDHYARUJINA AND T K DOCTOR '(%& + * /RSPONDENT BY SHRI B S N RAJU # + , / DATE OF HEARING : 10.11.2015 -.$ + , /DATE OF PRONOUNCEMENT : 11.12.2015 / / / / / O R D E R PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE ASS ESSEE AGAINST THE THREE SEPARATE ORDERS DATED 31.5.2012 PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-1 [HEREINAFTER REFERRED TO AS THE CIT(A)], MUMBAI RELEVANT TO THE ASSESSMENT YEARS 2002-03 TO 2004-0 5. SINCE, THESE APPEALS PERTAIN TO THE SAME ASSESSEE AND COMMON GRO UNDS HAVE BEEN TAKEN THEREIN, WE HAVE HEARD THESE APPEALS TOGETHER AND THESE APPEALS ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITAS NO. 5092 TO 5094/MUM/2012 2 2. THE GROUNDS TAKEN IN ALL THE APPEALS ARE COMMON EXCEPT FIGURES, THEREFORE, FOR THE SAKE OF BREVITY, WE REPRODUCE BE LOW THE GROUNDS FOR THE ASSESSMENT YEAR-2003-04: 1 THE LEARNED ASSESSING OFFICER HAS ERRED IN REOP ENING ASSESSMENT IN ABSENCE OF 'NEW MATERIAL' UNDER SECTION 147, WHICH WAS PREVIOUSLY COMPLETED UNDER SECTION 143 (1). FUR THER THE LEARNED CIT(A) HAS ERRED BY STATING THAT RE-OPENING OF THE ASSESSMENT U/S. 147 & ASSESSMENT FRAMED THERE UNDER CANNOT BE CALLED ILLEGAL & BAD IN LAW. (A) RETURN OF INCOME WAS PROCESSED U/S 143(1) & ASSESSMENT REOPENED U/S 148. NO NEW REFERENCE MATERIAL WAS AVA ILABLE TO THE ASSESSING OFFICER ON THE BASIS OF WHICH BELIEF COUL D BE FORMED THAT THERE WAS ESCAPEMENT OF INCOME. THE AUDIT REPORT & SCHEDULES TO THE ACCOUNTS FILED WITH THE RETURN OF INCOME CLEARL Y STATED THAT ADVERTISEMENT INCOME IN INCOME & EXPENDITURE ACCOUNT WAS NET OF EXPENSES. 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN NO T PROVIDING THE COPY OF REASONS RECORDED PRIOR TO ISSUE OF NOTICE U NDER SECTION 148 TO COMPLETE REASSESSMENT UNDER SECTION 147 OF THE I NCOME TAX ACT, 1961. FURTHER THE LEARNED CIT (A) HAS ERRED BY JUST IFYING THIS ACT OF ASSESSING OFFICER. 3. THE LEARNED ASSESSING OFFICER HAS ERRED BY OBTAI NING APPROVAL OF ADDITIONAL C.IT.-16 (1),MUMBAI INSTEAD OF THE CH IEF COMMISSIONER OR COMMISSIONER BEFORE ISSUING NOTICE U/S 148. FURT HER THE LEARNED CIT (A) HAS ERRED BY STATING THAT APPROVAL IS TO BE OBTAINED IN CASE THE NOTICE IS ISSUED U/S 148 BEYOND 4 YEARS WHEREA S APPROVAL OF THE JOINT COMMISSIONER IS REQUIRED EVEN IF NOTICE IS I SSUED WITHIN FOUR YEARS. 4. THE LEARNED ASSESSING OFFICER & CIT (A) HAS ERRED BY NOT ALLOWING DEDUCTIONS AVAILABLE UNDER SECTION 57 (II) OF THE INCOME - TAX ACT, 1961. THE LEARNED ASSESSING OFFICER HAS DI SALLOWED THE TOTAL EXPENSES OF RS.12,64,503/- INCURRED FOR EARNI NG THE ADVERTISEMENT INCOME OF RS.17,55,000/- .THE LEARNED CIT (A) HAS GIVEN PARTIAL RELIEF BY ALLOWING EXPENSES OF RS 4,0 8,756/- BUT HAS ERRED BY DISALLOWING THE BALANCE EXPENSES (MAJOR RE PAIRS) OF RS.8,55,747/- /- BY TREATING IT AS CAPITAL EXPENDIT URE WHICH MUST BE CONSIDERED AS PER SECTION 57 OF THE INCOME TAX ACT, 1961. THESE ARE REPAIR EXPENSES INCURRED FOR STRENGTHENING THE SOCI ETY BUILDING DUE TO THE HOARDING DISPLAYED ON THE TERRACE. ITAS NO. 5092 TO 5094/MUM/2012 3 5. THE LEARNED ASSESSING OFFICER HAS ERRED BY NO T SIGNING EACH PAGE OF THE ASSESSMENT ORDER. THE LEARNED CIT (CA) HAS ERRED BY STATING THAT THERE IS NO SUCH REQUIREMENT. 6. THE LEARNED ASSESSING OFFICER & CIT(A) HAS ERRED BY NOT CONSIDERING THE FAVOURABLE CASE LAWS DECIDED BY THE SUPREME COURT & OTHER AUTHORITIES. 7. THE LEARNED ASSESSING OFFICER HAS ERRED IN NOT C ONSIDERING THE ORDER PASSED BY AO UNDER 143 R. W.S 147 FOR A. Y. 1999-00 HAVING SIMILAR FACTS. FURTHER THE LEARNED CIT (A) H AS ERRED BY JUSTIFYING THIS ACT OF ASSESSING OFFICER. 8. THE LEARNED-ASSESSING OFFICER ERRED BY STATING T HAT THE SOCIETY EVADES THE ACTUAL PAYMENT OF TAX BY RESORTING TO OB TAINING ARTIFICIAL CERTIFICATE FROM ENGINEER FOR STRUCTURAL REPAIRS ST ATING THAT THESE REPAIRS ARE INCURRED FOR PUTTING HOARDING. THE LEAR NED CIT(A) HAS ERRED BY NOT DEALING WITH THIS GROUND IN HIS ORDER. 9. THE LD. AO HAS ERRED IN NOT MAKING THE ALLOCATI ON OF EXP3NSES, WHICH ARE ELIGIBLE FOR DEDUCTION AGAINST TAXABLE INCOME OF ADVERTISING AND HOARDING CHARGES. 3. THE LEARNED. AR SUBMITTED THAT AT THE INSTANCE O F CLIENT, HE DOES NOT WANT TO PRESS GROUNDS NO.3, AND 5 TO 9, THEREFORE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 4. WITH REGARD TO THE GROUNDS NO.1 AND 2, THE LD. A R SUBMITTED THAT THESE GROUNDS ARE LEGAL IN NATURE. THESE GROUNDS P ERTAIN TO REOPENING OF THE ASSESSMENT IN QUESTION. HE HAS FORMALLY INFORM ED THAT IN THE EARLIER YEARS, THIS GROUND HAS ALREADY BEEN DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE. WITH REGARD TO THE GROUND NO.4, THE LD. AR SUBMITTED THAT THIS GROUND STANDS COVERED IN FAVOUR OF THE ASSESSE E BY THE DECISION OF THE TRIBUNAL IN THE ASSESSMENT YEAR 2000-01. 5. WE HAVE PERUSED THE ORDER OF THE TRIBUNAL FOR T HE YEAR 2000-01. WE FIND THAT THE ISSUE RELATING TO THE REOPENING O F THE ASSESSMENT U/S 147 OF THE ACT HAS BEEN DISCUSSED IN DETAILED BY T HE TRIBUNAL AND IT WAS FOUND THAT THE ASSESSING OFFICER (HEREINAFTER REFE RRED TO AS THE AO) HAD ITAS NO. 5092 TO 5094/MUM/2012 4 VALID REASONS TO BELIEVE THAT THE INCOME OF THE ASS ESSEE HAS ESCAPED ASSESSMENT AND THE SAID ISSUE HAS BEEN DECIDED AGAI NST THE ASSESSEE. HOWEVER, SO FAR AS THE ISSUE TAKEN VIDE GROUND NO.4 ON MERITS RELATING TO ALLOWABILITY OF THE EXPENDITURE INCURRED FOR EARNIN G THE ADVERTISEMENT INCOME HAS ALSO BEEN DEALT WITH BY THE TRIBUNAL, WH EREIN THE TRIBUNAL AFTER GOING THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, OBSERVED THAT IN THE EARLIER YEAR SUCH EXPENDITURE FOR DISPLAYIN G HOARDINGS AND THE REPAIRS DONE TO THE BUILDING DUE TO THE FIXING OF T HE HOARDINGS ETC HAS BEEN ALLOWED TO THE ASSESSEE. EVEN A REMAND REPORT WAS CALLED FOR BY THE LD. CIT(A) IN THE EARLIER YEARS, WHEREIN THE AO HAS ADMITTED THE EXPENDITURE INCURRED BY THE ASSESSEE AND WAS ALLOWE D AND GIVEN SET OFF OF THE SAME AGAINST THE HOARDING CHARGES RECEIVED B Y THE ASSESSEE. THE FACTS BEING IDENTICAL FOR THE YEAR UNDER CONSIDERA TION ARE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE T RIBUNAL FOR THE ASSESSMENT YEAR 2000-01, FOLLOWING THE SAME PRECED ENT, WE ALLOW GROUND NO.4 TAKEN BY THE ASSESSEE. 6. WITH REGARD TO THE ISSUE OF RE-OPENING OF THE AS SESSMENT, WE MAY POINT OUT THAT THE LEARNED. AR HAS RAISED THE CON TENTION THAT THE REASONS RECORDED BY THE AO FOR REOPENING OF THE ASSESSMENT SHOULD HAVE BEEN SUPPLIED TO THE ASSESSEE BEFORE THE CONCLUSION OF T HE ASSESSMENT. HOWEVER, HE HAS ADMITTED THAT THE ASSESSEE DID NOT MAKE ANY REQUEST FOR SUPPLY OF REASONS DURING ASSESSMENT PROCEEDINGS. T HE CONTENTION OF THE LD. A.R. HAS BEEN THAT EVEN THOUGH THE ASSESSEE DID NOT DEMAND THE COPY OF REASONS RECORDED, STILL IT WAS MANDATORY FOR THE AO TO SUPPLY THE COPY OF REASONS ALONG WITH NOTICE UNDER SECTION 148 OF T HE ACT. 7. AS POINTED OUT EARLIER THAT IN EARLIER YEARS THE ISSUE OF RE-OPENING HAS BEEN DECIDED AGAINST THE ASSESSEE. HOWEVER, SI NCE THE ONLY GROUND RAISED ON MERITS BY THE ASSESSEE IS COVERED IN FAVO UR OF THE ASSESSEE AND THE ASSESSEE HAS NOT PRESSED THE OTHER GROUNDS, HEN CE, WE DO NOT DEEM ITAS NO. 5092 TO 5094/MUM/2012 5 FIT AT THIS STAGE TO DELIBERATE ON THE ISSUE OF REO PENING. THIS ISSUE RAISED BY THE LD. A.R. AT THIS STAGE IS RENDERED ACADEMIC IN NATURE AND IS KEPT OPEN TO BE DECIDED IN AN APPROPRIATE CASE. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 11 TH DEC, 2015. -.$ 0 1#2 11 TH DEC , 2015 . + : SD/- SD/- ( , / RAJENDRA) ( /SANJAY GARG) /ACCOUNTANT MEMBER ! /JUDICIAL MEMBER MUMBAI: 11 TH DEC, 2015. . !# . ./ SRL , SR. PS / / / / + ++ + '!,;< '!,;< '!,;< '!,;< =<$, =<$, =<$, =<$, / COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. >, ( ) / THE CIT(A)- CONCERNED 4. >, / CIT CONCERNED 5.