The ITO, 2(2), Indore V. M/s. MAHAMAYA TEX FAB PVT LTD., Indore

ITA 595/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5872 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 17-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MEENA
• Assessee Lawyers: SHRI
• Keywords: Audit objection; Difference of opinion; Tax effect; Change of opinion
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO.595/IND/2014 A.Y. : 2006-07 ITO 2(2), INDORE. M/S.MAHAMAYA TEX FEB. PRIVATE LIMITED, VS. INDORE. APPELLANT RESPONDENT PAN NO. AABCV6704A APPELLANTS BY : SHRI R.R.MEENA, DR RESPONDENT BY : SHRI PANKAJ SHAH, CA O R D E R PER D.T.GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, INDORE, DATED 13.06.2014 FOR THE ASSES SMENT YEAR 2006-07. DATE OF HEARING : 03. 1 1 .2015. DATE OF PRONOUNCEMENT : 05.01.2016 ITO, INDORE VS. M/S.MAHAMAYA TEX FEB P.LTD., I.T.A.NO. 595/IND/2014 A.Y. 2006-07 2 2 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) 1. ERRED IN DELETING THE ADDITION OF RS. 45,30,000/- WITH TAX EFFECT OF RS. 16,37,893/- BY HOLDING IT AS CHANGE IN OPINION, WHEREAS THE CASE WAS RE-OPENED ON THE GROUND THAT THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF THE COMPANIES ACT AND HAD ACTED ILLEGALLY BY CALLING EXCESS SHARE APPLICATION MONEY WITHOUT AUTHORIZATION OF REGISTRAR OF COMPANIES. 2. ERRED IN DELETING THE ADDITION WHILE IGNORING THE FACTS FOUND DURING ASSESSMENT PROCEEDINGS. 3. ERRED IN DELETING THE ADDITION WITHOUT APPRECIATING THAT IF IN THE ORIGINAL ASSESSMENT THE ISSUE WAS CONSIDERED AND NO ADDITION WAS MADE, AND THEN THE CASE WAS RE-OPENED AS NEW FACTS CAME TO LIGHT WHICH WERE NOT CONSIDERED EARLIER; THEN THE DECISIO N TO RE-OPEN THE CASE CANNOT BE TERMED AS CHANGE IN OPINION ITO, INDORE VS. M/S.MAHAMAYA TEX FEB P.LTD., I.T.A.NO. 595/IND/2014 A.Y. 2006-07 3 3 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF TRADING OF MISC. ITEMS E .G. TEA, MILK AND PLY ETC. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS FILED ITS ORIGINAL RETURN OF INCOME ON 27.11.20 06 VIDE ACKNOWLEDGEMENT NO. 0012207734 DECLARING TOTAL INCO ME AT RS. 17,880/-. THE CASE WAS SELECTED FOR SCRUTINY AN D ORIGINAL ASSESSMENT WAS CONCLUDED ON 04.12.2008. THE ASSESSM ENT WAS REOPENED U/S 147 OF THE ACT AND FIRST REASSESSM ENT WAS CONCLUDED ON 15.06.2011. THE ASSESSMENT WAS AGAIN REOPENED AFTER A PERIOD OF FOUR YEARS VIDE NOTICE D ATED 28.03.2013. THE SECOND REASSESSMENT WAS CONCLUDED O N 21.02.2014 ASSESSING THE TOTAL INCOME AT RS. 48,65, 994/- AFTER MAKING THE ADDITION OF PENDING SHARE APPLICATION MO NEY FOR THE MERE REASON THAT AUTHORIZED CAPITAL IS NOT INCR EASED BEFORE TAKING APPLICATION MONEY. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) QUASHED THE REASSESSMENT BY OBSERVING AS UNDER :- 8. AS PER FACTS NARRATED ABOVE, SINCE IN THIS CASE SCRUTINY ASSESSMENT WAS ALREADY MADE IN WHICH NO ADDITION WAS MADE ON THE ISSUE OF SHARE CAPITAL EVE N ITO, INDORE VS. M/S.MAHAMAYA TEX FEB P.LTD., I.T.A.NO. 595/IND/2014 A.Y. 2006-07 4 4 AFTER CALLING THE RELATED DETAILS, THEREFORE, AN OP INION WAS FORMED & REOPENING OF SUCH SCRUTINY ASSESSMENT TANTAMOUNT TO CHANGE OF OPINION, WHICH IS NOT PERMITTED IN LAW AS HELD IN CASE OF KELVINAT OR OF INDIA LIMITED ( S. C. ), 320 ITR 561, PITAMPUR STEELS P.LTD.,(2008) 11 TTJ 696 (MP), AND GARDEN SILK MILLS P.LTD. (GUJ), 222 ITR 689. REOPENING MER ELY BASED ON AUDIT OBJECTION WHERE AO HIMSELF BELIEVES THAT NO SUCH ADDITION CAN BE MADE SINCE IT WAS EXPLAINED IN ORIGINAL ASSESSMENT, IS HELD TO BE BAD - IN-LAW IN CASES OF INDIA & EASTERN NEWS PAPER SOCIETY ( S. C.), 119 ITR 996, JAGAT JAYANTILAL PAR EKH (GUJ) 355 ITR 400 AND YASHWANT TALKIES (MP) 157 ITR 103. 9. IN VIEW OF THE AFORESAID FACTS AND DECISIONS CITED ABOVE, THE INVOKING OF PROVISIONS OF SECTION 147 OF INCOME-TAX ACT, 1961, AND REOPENING OF THE ASSESSMENT CANNOT BE SUSTAINED. AS THE REOPENING ITSELF CANNOT BE SUSTAINED, THERE WAS NO NEED TO ADJUDICATE ON THE MERIT OF THE ADDITIONS MADE. ITO, INDORE VS. M/S.MAHAMAYA TEX FEB P.LTD., I.T.A.NO. 595/IND/2014 A.Y. 2006-07 5 5 5. THE LD. DR RELIED UPON THE ORDER OF THE AO. 6. THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDE R OF THE CIT(A)-I. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. THE LD. DR DID NOT POINT OUT ANYTHING CON TRARY TO THE FINDING OF THE LD. CIT(A). WE UPHOLD THE ACTION OF THE LD. CIT(A). OUR INTERFERENCE IS NOT REQUIRED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 5 TH JANUARY, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 5 TH JANUARY, 2016. CPU* 1611