PODAR TEXTILES (DAMAN) P.LTD, MUMBAI V. ITO 2(2)(4), MUMBAI

ITA 5726/MUM/2009

• Counselvise Citation: 572619914 RSA 2009
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-06-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 26-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AARTI VISSANJI
• Keywords: Business income; Business expenditure; Bad and doubtful debts; Reason to believe
• Section: 148

Judgement Text

1 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001- -- -02) 02) 02) 02) IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI C CC C BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI P M JAGTAP , P M JAGTAP , P M JAGTAP , P M JAGTAP ,AM & AM & AM & AM & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM ITA NO. ITA NO. ITA NO. ITA NO. 5726/MUM/2009 5726/MUM/2009 5726/MUM/2009 5726/MUM/2009 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2001 2001 2001 2001- -- -02 0202 02) )) ) PADAR TEXTILES (DAMAN) P LTD PODAR CHAMBERS, 4 TH FLOOR SA BREVLI ROAD, FORT, MUMBAI VS THE INCOME TAX OFFICER WARD 2(2)(4), MUMBAI ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.AAACP2077K AAACP2077K AAACP2077K AAACP2077K A SSESSEE BY SMT AARTI VISSANJI REVENUE BY SHRI PARTMA SARATI NAIK PER PER PER PER VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO, , , , JM JMJM JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20.8.2009 OF THE CIT(A) FOR THE ASSESSMENT YEAR 2001-02. 2 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: I ) THE AUTHORITIES BELOW ERRED IN REOPENING THE ASSE SSMENT U/S 148 WITHOUT ANY REASONABLE BASIS AND GROUND AND OVERLOO KING TO THE FACT THAT THE LD ASSESSING OFFICER HAS NOT CONSIDERED THE SUB MISSION OF THE APPELLANT COMPANY THAT NOTHING HAS ESCAPED ASSESSME NT DURING THE YEAR AS PROVIDED U/ 147 OF THE I TACT, 191. II) THE AUTHORITIES BELOW ERRED IN DISALLOWING BAD DEBTS OF RS. 3,46,600/- WITHOUT APPRECIATING AND CONSIDERING THE FACT THAT THE BAD DEBT HAD ARISEN DURING THE YEAR UNDER CONSIDERATION AND HENCE TO BE ALLOWED AS BUSINESS LOSS. III) THE AUTHORITIES BELOW ERRED IN DISALLOWING TRA VELLING EXPENSES OF RS. 1,98,757/- WITHOUT APPRECIATING AND CONSIDERING ALL THE MATERIAL FACTS AND CIRCUMSTANCES OF THE CASE AND OVERLOOKING TO THE FA CT THAT THE SAME BEING INCURRED FOR THE PURPOSE OF THE BUSINESS OF THE APP ELLANT COMPANY IS AN ALLOWABLE BUSINESS EXPENDITURE. IV)THE AUTHORITIES BELOW ERRED IN DISALLOWING INTER EST OF RS. 5,17,436/- WITHOUT APPRECIATING AND CONSIDERING ALL THE MATERI AL FACTS AND CIRCUMSTANCES OF THE CASE AND OVERLOOKING TO THE F ACT THAT THE SAME HAS BEEN PAID/PROVIDED ON BORROWINGS MADE FOR THE PURPO SE OF BUSINESS OF THE APPELLANT COMPANY. THE APPELLANT THEREFORE, PRAYS T HAT THE LD ASSESSING 2 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001- -- -02) 02) 02) 02) OFFICER BE DIRECTED TO ALLOW THE EXPENSES AS BUSINE SS EXPENSES/BUSINESS LOSS. 3 GROUND NO.1, IS REGARDING THE VALIDITY OF REOPENI NG OF THE ASSESSMENT. 3.1 THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.1 0.2001, WHICH WAS PROCESSED U/S 143(1) ON 19.6.2002. SUBSEQUENTLY, P ROCEEDINGS U/S 147 WERE INITIATED BY ISSUING NOTICE U/S 148 ON 18.3.2008. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT MAINLY ON THE GROUND/REASON THAT THE INCOME ADMITTED BY THE ASSESSEE AS BUSINESS INCOME OUGHT TO HAVE BE EN ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND THEREFORE, TH E EXPENDITURE CLAIMED BY THE ASSESSEE, IN THE OPINION OF THE ASSESSING OFFIC ER ARE NOT ALLOWABLE. WHILE COMPLETING THE REASSESSMENT, THE ASSESSING OFFICER TREATED THE RENTAL INCOME ON SUB-LETTING OF THE PREMISES AS INCOME FROM OTHER SO URCES AND ALLOWED THE EXPENDITURE U/S 57(III) OF THE I T ACT. THE ASSESS EE CHALLENGED THE REASSESSMENT ORDER BEFORE THE CIT(A) BY TAKING THE OBJECTION OF VALIDITY OF THE REOPENING AS WELL AS ON MERIT. THE CIT(A) DISMISSED THE APPEAL O F THE ASSESSEE VIDE THE IMPUGNED ORDER. 4 BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITTE D THAT THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY RECORDING THE R EASONS THAT THE ASSESSEE ADMITTED THE COMPENSATION/RENTAL INCOME ON LETTING OUT OF THE HOUSE PROPERTY AS BUSINESS INCOME AND CLAIMED VARIOUS EXPENSES AGAINS T THE SAID INCOME. SINCE THE SAID INCOME BEING COMPENSATION/RENTAL INCOME FR OM LETTING OUT OF THE HOUSE PROPERTY SHOULD HAVE BEEN OFFERED FOR TAXATION UNDE R THE HEAD INCOME FROM HOUSE PROPERTY, THE ASSESSING OFFICER BELIEVED THA T THE INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC. 147. THE LD AR HAS FURTHER SUBMITTED THAT WHILE FRAMING THE REASSESSMENT, THE ASSESSING OFFICER TREATED THE INCOME BEING COMPENSATION FROM LETTING OUT OF THE HOUSE PR OPERTY UNDER THE HEAD INCOME FROM OTHER SOURCES. SHE HAS REFERRED THE REASSESSMENT ORDER AND 3 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001- -- -02) 02) 02) 02) SUBMITTED THAT WHEN NO ASSESSMENT WAS MADE ON THE I SSUE OF REOPENING OR REASSESSMENT THEN THE ASSESSING OFFICER IS BARRED T O ASSESS OR REASSESS THE SAID INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THUS, THE LD AR OF THE ASSESSEE HAS CONTENDED THAT THE REASSESSMENT IS BAD IN LAW. SHE HAS RELIED UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS JET AIRWAYS REPORTED IN 195 TAXMAN 117. 4.1 ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSING OFFICER, WHILE REOPENING THE ASSESSMENT WAS NOT HAVING COMP LETE RECORDS TO FIND OUT THE TRUE NATURE OF THE INCOME OFFERED BY THE ASSESSEE. HE HAS FURTHER CONTENDED THAT AT THE TIME OF REOPENING WHAT IS REQUIRED IS O NLY THE PRIMA FACIE BELIEF OF THE ASSESSING OFFICER THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. THE LD DR HAS SUBMITTED THAT WHEN THE ASSESSING OFF ICER FINALLY ASSESSED THE INCOME FROM OTHER SOURCES AND DISALLOWED THE EXPEND ITURE CLAIMED BY THE ASSESSEE, THEN, THERE IS NO INCONSISTENCY IN THE RE ASONS RECORDED BY THE ASSESSING OFFICER AND ASSESSMENT OF THE INCOME IN THE REASSESSMENT ORDER. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW . 5 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELE VANT RECORDS. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT BY RE CORDING THE REASONS AS UNDER: IN THE INSTANT CASE, RETURN OF INCOME FOR ASSESSME NT YEAR 2001-02 WAS FILED ON 30.10.2001 DECLARING TOTAL INCOME OF RS. ( -) 5,85,670/-. THE RETURN WAS PROCESSED U/S 143(1) ON 19.6.2002. ON PERUSAL OF RECORDS ESPECIALLY P&L ACCOUNT, IT I S OBSERVED THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS CREDITED INCOME OF RS. 23,08,157/- WHICH IS SOLELY ATTRIBUTABLE TO THE COMPENSATION BEING RENT RECEIVED ON LETTING OUT OF HOUSE PROPERTY. AGAINST THIS THE ASSESSEE HAS 4 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001- -- -02) 02) 02) 02) CLAIMED VARIOUS EXPENSES LIKE SALARY, ADMINISTRATIV E, SELLING EXPENSES AND INTEREST, FINANCE CHARGES AND LOSS ON SALE OF SHARE S. TAKING INTO CONSIDERATION FACTS OF THE CASE, IN TOT ALITY AND PROVISIONS OF LAW, IT NEEDS TO BE PLACED ON RECORD THAT COMPENSAT ION/RENT RECEIVED FROM LETTING OUT OF HOUSE PROPERTY OUGHT TO HAVE BEEN OF FERED FOR TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY, FOLLOWING THE LA W LAID DOWN BY THE APEX COURT IN THE CASE OF M/S SHAMBHOO INVESTMENT P LTD VS CIT REPORTED IN 263 ITR143 (SC). THE ASSESSEE BY OFFERING INCOME UNDER THE HEAD BUS INESS HAS CLAIMED EXCESSIVE AND INADMISSIBLE DEDUCTION BEING ADMINIST RATIVE EXPENSES OF RS. 16,14,033/-, PAYMENTS AND PROVISIONS FOR EMPLOY EES OF RS. 1,55,508/- ETC. CAUSING THEREBY ESCAPEMENT OF INCOME AT LEAST TO THAT EXTENT. IN VIEW OF THE ABOVE, I AM FULLY CONVINCED AND SATI SFIED THAT THE INCOME HAS ESCAPED WITHIN THE MEANING OF SEC. 147 OF THE A CT. 5.1 IT IS CLEAR FROM THE REASONS RECORDED BY THE AS SESSING OFFICER THAT THE ASSESSMENT WAS REOPENED MAINLY ON THE REASON THAT T HE ASSESSEE OFFERED THE RENTAL INCOME AS INCOME FROM BUSINESS; WHEREAS THE ASSESSING OFFICER HAD REASONS TO BELIEVE THAT THE SAID INCOME SHOULD HAVE BEEN OFFERED FOR TAXATION UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S SHAMBHOO INVESTMENT P LTD (SUPRA). THUS, IT IS MANIFEST FROM THE REASONS RECORDED BY THE ASSESSING OFFICER THAT THE ASSESSING OFFICER HAS FORMED AN OPINION TO BELIEV E THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT MAINLY ON THE REASON THA T THE INCOME SHOULD HAVE BEEN OFFERED UNDER THE HEAD INCOME FROM HOUSE PROP ERTY IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT CITED SUPRA. IT IS AN UNDISPUTED FACT THAT WHILE FRAMING THE REASSESSMENT, THE ASSESSING OFFIC ER, AFTER CONSIDERING THE FACTS AND THE CONTENTION OF THE ASSESSEE ASSESSED T HE SAID RENTAL INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND ALLOWED TH E EXPENDITURE U/S 57(III) OF THE I T ACT. THEREFORE, WHILE FRAMING THE ASSESSMEN T, THE ASSESSING OFFICER DID NOT ASSESS/REASSESS THE INCOME UNDER THE HEAD INCO ME FROM HOUSE PROPERTY WHICH WAS THE REASONS FOR REOPENING OF THE ASSESSME NT. THE HONBLE 5 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001- -- -02) 02) 02) 02) JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS JET AIRWAYS, CITED SUPRA, HAS OBSERVED IN PARAS 11 & 17 AS UNDER: 11. THE RIVAL SUBMISSIONS WHICH HAVE BEEN URGED ON BEHALF OF THE REVENUE AND THE ASSESSEE CAN BE DEALT WITH, BOT H AS A MATTER OF FIRST PRINCIPLE, INTERPRETING THE SECTION AS IT STANDS AND ON THE BASIS OF PRECEDENTS ON THE SUBJECT. INTERPRE TING THE PROVISION AS IT STANDS AND WITHOUT ADDING OR DEDUCT ING FROM THE WORDS USED BY PARLIAMENT, IT IS CLEAR THAT UPON THE FORMATION OF A REASON TO BELIEVE UNDER SECTION 147 AND FOLLOWING THE ISSUANCE OF A NOTICE UNDER SECTION 148, THE ASSESSI NG OFFICER HAS THE POWER TO ASSESSEE OR REASSESS THE INCOME, W HICH HE HAS REASON TO BELIEVE HAD ESCAPED ASSESSMENT AND ALSO A NY OTHER INCOME CHARGEABLE TO TAX. THE WORDS AND ALSO CANN OT BE IGNORED. THE INTERPRETATION WHICH THE COURT PLACES ON THE PROVISION SHOULD NOT RESULT IN DILUTING THE EFFECT OF THESE WORDS OR RENDERING ANY PART OF THE LANGUAGE USED BY PARLI AMENT OTIOSE. PARLIAMENT HAVING USED THE WORDS ASSESS OR REASSES S SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT, THE WORDS AND ALSO CANNOT BE READ AS BEING IN THE ALTERNATIVE. ON THE CONTRARY, THE CORR ECT INTERPRETATION WOULD BE TO REGARD THOSE WORDS AS BE ING CONJUNCTIVE AND CUMULATIVE. IT IS OF SOME SIGNIFICA NCE THAT PARLIAMENT HAS NOT USED THE WORD OR. THE LEGISLAT URE DID NOT REST CONTENT BY MERELY USING THE WORD AND. THE WO RDS AND, AS WELL AS ALSO HAVE BEEN USED TOGETHER AND IN CO NJUNCTION. THE SHORTER OXFORD DICTIONARY DEFINES THE EXPRESSIO N ALSO TO MEAN FURTHER, IN ADDITION, BESIDES, TOO. THE WORD HAS BEEN TREATED AS BEING RELATIVE AND CONJUNCTIVE. EVIDENTL Y, THEREFORE, WHAT PARLIAMENT INTENDS BY USE OF THE WORDS AND AL SO IS THAT THE ASSESSING OFFICER, UPON THE FORMATION OF REASON TO BELIEVE UNDER SECTION 147 AND THE ISSUANCE OF A NOTICE UNDE R SECTION 148(2) MUST ASSESS OR REASSESS (I) SUCH INCOME, A ND ALSO (II) ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPE D ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION. THE WO RDS SUCH INCOME REFER TO THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND IN RESPECT OF WHICH THE ASSESSING OF FICER HAS FORMED A REASON TO BELIEVE THAT IT HAS ESCAPED ASSE SSMENT. HENCE, THE LANGUAGE WHICH HAS BEEN USED BY PARLIAME NT IS INDICATIVE OF THE POSITION THAT THE ASSESSMENT OR R EASSESSMENT MUST BE IN RESPECT OF THE INCOME IN RESPECT OF WHIC H HE HAS FORMED A REASON TO BELIEVE THAT IT HAS ESCAPED ASSE SSMENT AND ALSO IN RESPECT OF ANY OTHER INCOME WHICH COMES TO HIS NOTICE SUBSEQUENTLY DURING THE COURSE OF THE PROCEEDINGS A S HAVING ESCAPED ASSESSMENT. IF THE INCOME, THE ESCAPEMENT O F WHICH WAS THE BASIS OF THE FORMATION OF THE REASON TO BEL IEVE IS NOT 6 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001- -- -02) 02) 02) 02) ASSESSED OR REASSESSED, IT WOULD NOT BE OPEN TO THE ASSESSING OFFICER TO INDEPENDENTLY ASSESS ONLY THAT INCOME WH ICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEE DINGS UNDER THE SECTION AS HAVING ESCAPED ASSESSMENT. IF UPON T HE ISSUANCE OF A NOTICE UNDER SECTION 148(2), THE ASSESSING OFF ICER ACCEPTS THE OBJECTIONS OF THE ASSESSEE AND DOES NOT ASSESS OR REASSESS THE INCOME WHICH WAS THE BASIS OF THE NOTICE, IT WO ULD NOT BE OPEN TO HIM TO ASSESS INCOME UNDER SOME OTHER ISSUE INDEPENDENTLY. PARLIAMENT WHEN IT ENACTED THE PROVI SIONS OF SECTION 147 WITH EFFECT FROM 1.4.1989 CLEARLY STIPU LATED THAT THE ASSESSING OFFICER HAS TO ASSESS OR REASSESS THE INC OME WHICH HE HAD REASON TO BELIEVE HAD ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH CAME TO HIS NO TICE DURING THE PROCEEDINGS. IN THE ABSENCE OF THE ASSESSMENT O R REASSESSMENT OF THE FORMER, HE CANNOT INDEPENDENTLY ASSESS THE LATER. 17. WE HAVE APPROACHED THE ISSUE OF INTERPRETATION THAT HAS ARISEN FOR DECISION IN THESE APPEALS, BOTH AS A MAT TER OF FIRST PRINCIPLE, BASED ON THE LANGUAGE USED IN SECTION 14 7(1) AND ON THE BASIS OF THE PRECEDENT ON THE SUBJECT. WE AGREE WITH THE SUBMISSION WHICH HAS BEEN URGED ON BEHALF OF THE AS SESSEE THAT SECTION 147(1) AS IT STANDS POSTULATES THAT UP ON THE FORMATION OF A REASON TO BELIEVE THAT INCOME CHARGE ABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOM E AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH COME S TO HIS NOTICE SUBSEQUENTLY DURING THE PROCEEDINGS AS HAVIN G ESCAPED ASSESSMENT. THE WORDS AND ALSO ARE USED IN A CUMU LATIVE AND CONJUNCTIVE SENSE. TO READ THESE WORDS AS BEING IN THE ALTERNATIVE WOULD BE TO REWRITE THE LANGUAGE USED B Y PARLIAMENT. OUR VIEW HAS BEEN SUPPORTED BY THE BACK GROUND WHICH LED TO THE INSERTION OF EXPLANATION 3 TO SECT ION 147. PARLIAMENT MUST BE REGARDED AS BEING AWARE OF THE INTERPRETATION THAT WAS PLACED ON THE WORDS AND AL SO BY THE RAJASHTAN HIGH COURT IN SHRI RAM SINGHS CASE (SUPR A). PARLIAMENT HAS NOT TAKEN AWAY THE BASIS OF THAT DEC ISION. WHILE IT IS OPEN TO PARLIAMENT, HAVING REGARD TO THE PLEN ITUDE OF ITS LEGISLATIVE POWERS TO DO SO, THE PROVISIONS OF SECT ION 147(1) AS THEY STOOD AFTER THE AMENDMENT OF 1.4.1989 CONTINUE TO HOLD THE FIELD. 7 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 ITA NO. 5726/MUM/2009 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001 (ASST YEAR 2001- -- -02) 02) 02) 02) 6 ACCORDINGLY, FOLLOWING THE DECISION OF THE HONBL E JURISDICTIONAL HIGH COURT, WE HOLD THAT THE REOPENING OF THE ASSESSMENT IS NOT SUSTAINABLE AND THE SAME IS SET ASIDE. ON MERIT; ON MERIT; ON MERIT; ON MERIT; 7 SINCE WE HAVE SET ASIDE THE REASSESSMENT BEING IN VALID; THEREFORE, WE DO NOT PROPOSE TO GO INTO THE MERITS OF OTHER ISSUES. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 30 TH , DAY OF JUNE 2011. SD/- SD/- ( (( ( P M JAGTAP P M JAGTAP P M JAGTAP P M JAGTAP ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 30 TH ,JUNE 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI