DCIT, New Delhi V. M/s. Dredging International India Pvt. Ltd., New Delhi

ITA 595/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4244 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 04-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tangible material; Difference of opinion; Change of opinion
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DLEHI BEFORE SHRI G.D. AGRAWAL, PRESIDENT AND SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER I.T.A. NO.595/DEL/2016 ASSESSMENT YEAR: 2004-05 DY. COMMISSIONER OF INCOME-TAX, VS M/S DREDGING INTER NATIONAL INDIA P.LTD. CIRCLE 7(2), NEW DELHI. E-13, UPPER GROUND FLOOR HAUZ KHAS MARKET, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.M. GUPTA RESPONDENT BY: SMT. RITU SHARMA ORDER PER K. NARSIMHA CHARY, JUDICIAL MEMBER CHALLENGING THE ORDER DATED 30/11/2015 IN APPEAL NO . 247/2015- 16 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS)-3 NEW DELHI (FOR SHORT HEREINAFTER CALLED LD. CIT(A) ), REVEN UE PREFERRED THIS APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN DREDGING AND MARINE ENGINEERING SERVICES INVOLVING DESIGNING, CONSTRUCTION, DEVELOPING, MODERNIZING, E XTENDING AND MAINTAINING PORTS AND HARBOURS. FOR THE ASSESSMENT YEAR 2004-05 THEY HAVE FILED THEIR RETURN OF INCOME ON 30/10/2004 DEC LARING A TOTAL INCOME OF RS.2,45,89,751/-AND THE ASSESSMENT UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT CALLED THE ACT) WAS COMPLETE BY WAY OF ORDER DATED 22/12/2006 DETERMINING A TOTAL INCOME O F RS.5,46,52,980/-. SUBSEQUENTLY BY ISSUANCE OF NOTICE DATED 30/03/2011 UNDER SECTION 148 OF THE ACT, LD. ASSESSING OFFICER SOUGHT TO REOPEN THE CONCLUDED ASSESSMENT, AND COMPLETED THE SAME BY MAKING AN ADD ITION OF RS. 35,99,990/-AS NOTIONAL LOSS ON THE FLUCTUATION IN T HE FOREIGN EXCHANGE. 3. IN APPEAL, LD. CIT(A) RECORDED THAT IN THE ORIG INAL ASSESSMENT VIDE LETTER DATED 18/12/2016 THE ASSESSEE MADE A DETAILE D SUBMISSIONS AND CONSIDERING THE SAME BY ORDER DATED 22/12/2006, LD. AO ACCEPTED THE CONTENTIONS RAISED BY THE ASSESSEE AND ALLOWED THE NET LOSS OF RS. 11,35,646/-ON ACCOUNT OF NET FOREIGN EXCHANGE LOSS, AND THAT THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE HAD NOT DISCLOSED THE FULL AND TRUE MATERIAL FACTS NECESSARY FOR THE ASSESSMEN T FOR THIS ASSESSMENT YEAR, AS SUCH, IN VIEW OF THE PRONOUNCEMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT, THE REASSESSMENT BY ISSU ING A NOTICE UNDER SECTION 148 OF THE ACT IS MERE CHANGE OF OPINION AND CONSEQUENTLY ASSESSMENT PROCEEDINGS ARE NULL AND VOID. ACCORDING LY LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. CHALLENGING THE SAME, REVENUE IS BEFORE US IN THIS APPEAL. 4. LD. DR PLACED ON THE ASSESSMENT ORDER. IT IS THE ARGUMENT OF THE LD. AR THAT DURING THE PROCEEDINGS UNDER SECTION 14 3 (3), BY LETTER DATED 18/12/2006 THE ASSESSEE MADE A DETAILED SUBMISSIONS AND PART B OF SUCH SUBMISSION ARE IN RESPECT OF THE ALLOWABILITY OF FOREIGN EXCHANGE LOSS OF RS. 11,35,646/-AND HAVING CONSIDERED THE SU BMISSIONS IN THIS RESPECT, LD. AO ALLOWED THE SAME AS SUCH WITHOUT SE CURING ANY TANGIBLE MATERIAL OR WITHOUT MAKING A GROUND THAT THE ASSESS EE DID NOT MAKE TRUE AND FULL DISCLOSURE OF THE FACTS, ITS NOT OPEN FOR THE LD. AO TO REOPEN THE CONCLUDED ASSESSMENT BEYOND THE PERIOD OF 4 YEARS F ROM THE END OF THE ASSESSMENT YEAR AND AS RIGHTLY HELD BY THE LD. CITA , IT IS A MERE CHANGE OF OPINION. 4. IT IS AN ADMITTED FACT THAT IN THIS MATTER THE O RIGINAL ASSESSMENT ORDER WAS PASSED ON 22/12/2006 FOR THIS ASSESSMENT YEAR 2004-05, AND THE NOTICE UNDER SECTION 148 WAS ISSUED ON 30/03/20 11, BEYOND THE PERIOD OF 4 YEARS FROM THE END OF THE ASSESSMENT YE AR. THERE IS ALSO NO DISPUTE THAT IN THE ORIGINAL ASSESSMENT VIDE LETTER DATED 18/12/2016 THE ASSESSEE MADE A DETAILED SUBMISSIONS AND CONSIDERIN G THE SAME BY ORDER DATED 22/12/2006, LD. AO ACCEPTED THE CONTENTIONS R AISED BY THE ASSESSEE AND ALLOWED THE NET LOSS OF RS. 11,35,646/ -ON ACCOUNT OF NET FOREIGN EXCHANGE LOSS. IT IS NOT THE CASE OF THE R EVENUE THAT ANY TANGEABLE MATERIAL HAS COME TO THE POSSESSION OF TH E LD. AO SUBSEQUENTLY OR THAT THE ASSESSEE FAILED TO FURNISH THE FULL AND TRUE MATERIAL PARTICULARS REQUIRED FOR PROPER ASSESSMENT . THE OBSERVATION OF THE LD. CIT(A) THAT IN THE ABSENCE OF ANY FOUNDATIO N TO BELIEVE THAT THE ASSESSEE IS GUILTY OF NOT PROVIDING TRUE AND FULL P ARTICULARS, AND ALSO IN THE ABSENCE OF ANY TANGIBLE MATERIAL COMING INTO TH E POSSESSION OF THE LD. ASSESSING OFFICER SUBSEQUENT TO THE PASSING OF THE ORDER UNDER SECTION 143 (3), REASSESSMENT BY ISSUING NOTICE UND ER SECTION 148 IS NOTHING BUT CHANGE OF OPINION. ON FACTS THERE IS NO DISPUTE. IN THE REASONS RECORDED BY THE LD. AO HE STATED THAT: THE ASSESSMENT PROCEEDINGS OF THE CASE WERE COMPLET ED ON 22 12.2006 AND ORDER UNDER SECTION 143 (3) WAS PASSED ON THE SAME DATE. LATER, DURING THE COURSE OF PERUSAL OF RECORDS, IT WAS REVEALED THAT THE ASSESSEE HAS CLAI MED AND WAS ALLOWED A DEDUCTION OF 5. IT IS, THEREFORE, CLEAR THAT THE REASON FOR THE OPENING OF THE CONCLUDED ASSESSMENT IS NOT ATTRIBUTABLE TO THE CON DUCT OF THE ASSESSEE AND IT IS NOT THE CASE OF THE REVENUE THAT ANY INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS, AS CONTEMPLATED UNDER PROVISO TO SECTION 147 OF THE ACT. WE, THEREFORE, C ONCUR WITH THE FINDINGS OF THE LD. CIT(A) THAT INASMUCH AS THE REQUIREMENTS OF THE PROVISO TO SECTION 147 OF THE ACT ARE NOT MET IN THIS CASE, TH E REASSESSMENT IS NOTHING BUT CHANGE OF OPINION AND CONSEQUENTLY SU CH PROCEEDINGS ARE NULL AND VOID. WE, ACCORDINGLY, DO NOT FIND ANY REA SON TO INTERFERE WITH THE ORDERS OF THE LD. CITA. GROUNDS OF APPEAL ARE F OUND TO BE DEVOID OF MERITS AND ACCORDINGLY DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 5T H DAY OF JANUARY, 2018. (G.D. AGRAWAL) (K. NARSIMHA CHARY) PRESIDENT JUDICIAL MEMBER DATED: 5 TH JANUARY, 2018 VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR