ASST. CIT (OSD) 2(1), MUMBAI V. GTL LTD, MUMBAI

ITA 6971/MUM/2010

• Counselvise Citation: 697119914 RSA 2010
• Duration Of Justice: 4 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-11-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 07-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R N DSOUZA
• Assessee Lawyers: DR K SHIVARAM; NEELAM C JADHAV
• Keywords: Reopening of assessment; Depreciation; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 147; 143(3); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI , ,, , BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 6416/MUM/2010 (ASSESSMENT YEAR: 2002-03) M/S GTL LIMITED, GLOBAL VISION, ES-II, MIDC TTC INDUSTRIAL AREA, MAHAPE VILLAGE, NAVI MUMBAI -400 710 .: PAN: AAACG 3742 L VS ASST. COMMISSIONER OF INCOME TAX (OSD)-2(1), AAYAKAR BHAVAN, MUMBAI (APPELLANT) ! (RESPONDENT) ITA NO. : 6971/MUM/2010 (ASSESSMENT YEAR: 2002-03) ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -9, ROOM NO. 806, 8 TH FLOOR, OLD CGO ANNEXE BLDG., MUMBAI -400 020 VS M/S GTL LIMITED, GLOBAL VISION, ES-II, NAVI MUMBAI -400 710 .: PAN: AAACG 3742 L ITA NO. : 1246/MUM/2012 (ASSESSMENT YEAR: 2003-04) ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -9, ROOM NO. 806, 8 TH FLOOR, OLD CGO ANNEXE BLDG., MUMBAI -400 020 VS M/S GTL LIMITED, GLOBAL VISION, ES-II, NAVI MUMBAI -400 710 .: PAN: AAACG 3742 L (APPELLANT) ! (RESPONDENT) APPELLANT-ASSESSEE BY : DR. K. SHIVARAM & MS NEELAM C JADHAV RESPONDENT-REVENUE BY : SHRI R N DSOUZA '# $ %& /DATE OF HEARING : 18-11-2014 '() $ %& / DATE OF PRONOUNCEMENT : 02-01-2015 + , + , + , + , O R D E R , , , , PER VIVEK VARMA, JM: THE FOLLOWING APPEALS HAVE BEEN FILED AND SUBMITTED FOR OUR CONSIDERATION: ASST. YEAR APPEAL BY CIT(A) DT. OF CIT(A) ORDER 2002 - 03 ASSESSEE 4, MUMBAI 06.07.2011 2002 - 03 DEPARTMENT 4, MUMBAI 06.07.2011 2003 - 04 DEPARTMENT 4, MUMBAI 16.12.2011 M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 2 2. ASSESSMENT YEAR 2002-03 IS SUBJECTED TO CROSS APP EALS BY THE ASSESSEE AND THE DEPARTMENT, AND SINCE GOA FOR AS SESSMENT YEAR 2003-04 HAVE IDENTICAL ISSUES AS IN ASSESSMENT YEA R 2002- 03, ALL THE THREE APPEALS ARE TAKEN UP FOR DISPOSAL THROU GH THIS COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIEN CE AND BREVITY. ITA NO. 6416/MUM/2010 : ASSESSEE APPEAL : 3. THE FOLLOWING GROUNDS HAVE BEEN TAKEN: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEA RNED ASSESSING OFFICERS STAND IN REOPENING THE ASSESSME NT U/S 147 OF THE INCOME TAX ACT. THE APPELLANT PRAYS THAT THE REOPENING OF ASSESSMENT U/S 147 OF THE INCOME T AX ACT MAY BE DECLARED BAD IN LAW AND REASSESSMENT ORD ER MAY PLEASE BE CANCELLED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR OMIT ANY GROUNDS OF APPEAL BEFORE OR DURING THE HEARING OF THE APPEAL. ITA NO. 6971/MUM/2010 : DEPARTMENT APPEAL : 4. THE FOLLOWING GROUNDS HAVE BEEN TAKEN: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING RELIE F TO THE ASSESSEE TO THE EXTENT IMPUGNED IN THE GROUNDS ENUMERATED BELOW: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THA T NO EXPENSE OUT OF THE CORPORATE EXPENSE WAS INCURRED IN RELATION TO STP UNITS CLAIMING DEDUCTIO N U/S 10B OF THE I.T. ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AN D IN LAW, THE LD CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE CORPORATE EXPENSES CONSISTING OF CONNECTIVITY PERSONAL COST, ADMINISTRATIVE, SELLING AND MARKETING EXPENSE, DEPRECIATION ETC, WERE INCURRED IN RELATION TO CORPORATE OFFICE OF THE ASS ESSEE COMPANY MANAGING AND ADMINISTERING OVERALL BUSINESS OF THE ASSESSEE COMPANY MANAGING AND ADMINISTERING OVERALL BUSINESS OF THE ASSESSEE COMPANY INCLUDING BUSINESS OF STP UNITS REQUIRING THE ALLOCATION OF SUCH EXPENSES BETWEEN STP AND NON STP UNITS. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO RESTORED M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 3 5. IN THE DEPARTMENT APPEAL THE SOLE ISSUE PERTAINS TO COMPUTATION OF EXEMPTION U/S 10B BASED ON APPORTIONMENT OF EXPENSES BETWEEN ELIGIBLE AND NON ELIGIBLE UNITS. 6. THE AO IN THE ASSESSMENT ORDER HAD REDUCED THE QUALIFYING AMOUNT FROM RS. 85,52,55,883/- TO RS, 80,34,34,780/-, ALLOCATING RS. 5,18,21,103/- FOR EXPORT ORIENTED UNIT (EOU). 7. BEFORE THE CIT(A) THE ASSESSEE MADE DETAILED SUBMISSION BY GIVING THE LOCATION WISE UNITS OF THE ASSESSEE AND POINT ED OUT THAT IT HAD DISTINGUISHED ITS ELIGIBLE EOU AND NON ELIGIBLE EOU , WHICH ARE AS FOLLOWS: LOCATION OF EOU UNITS MAHAPE ELECTRONIC SADAN NO. II (3 FLOOR) & ELECTRONIC SADA N NO. IV, MIDC TTC INDUSTRIAL AREA, MAHAPE, NAVI MUMBAI 400 710 THE NON-EOU UNITS ARE LOCATED ALL OVER INDIA, WITH SEVERAL BRANCHES AS UNDER: LOCATION WISE DETAILS OF NON-EOU UNITS 1. KOLKATTA 2. JAMSHEDPUR 3. BHUBNESHWAR 4. DELHI 5. JAIPUR 6. LUCKNOW 7.GURGAON 8.CHANDIGARH 9.HIMACHAL 10. PUNJAB 11. CHATTISGARH 12. BANGALORE 13. HYDERABAD 14. PONDICHERRY 15. COCHIN 16. AHEMEDAHAD 17. BHOPAL 18. GOA 19. INDORE 20. NAGPUR 21. PUNE, PRABHAT ROAD 22. BALLARD ESTATE, MASJID, MUMBAI 23. MAHAPE ES II (OTHER THAN STP) IT IS TO BE NOTED THAT THE ASSESSEE IS CLAIMING IOB DEDUCTION ONLY IN RESPECT OF MAHAPE UNIT AS ALL OTHER UNITS ARE NO N-EOU UNITS. THE AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THA T THE M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 4 NOMENCLATURE CORPORATE EXPENSES IS ONLY FOR THE SAK E OF CONVENIENCE TO BRING THE EXPENSES INCURRED BY THE C OMPANY ON VARIOUS OCCASIONS UNDER ONE HEAD. AS MENTIONED ABOV E, THE COMPANY IS HAVING BRANCH OFFICES ACROSS INDIA. THE EXPENSES OF RS. 20,76,32,766/-, INCLUSIVE OF DEPRECIATION, WERE BOOKED UNDER VARIOUS HEADS IN VARIOUS LOCATIONS ALL OVER I NDIA. THESE COMMON EXPENSES WERE REFLECTED AS CORPORATE OFFICE EXPENSES IN THE PROFIT AND LOSS ACCOUNT PRESENTED TO THE LD AO. THERE WAS ABSOLUTELY NO NEED TO ALLOCATE THESE CORPORATE OFFI CE EXPENSES OVER EOU UNITS, SINCE THE EXPENSES WERE INCURRED A T VARIOUS LOCATIONS ACROSS INDIA WHICH DO NOT HAVE ANY CONNEC TION WITH EOU UNITS OF THE COMPANY WHICH ARE LOCATED AT MAHAP E (ES II & IV), NAVI MUMBAI OFFICE ONLY. LOCATION-WISE DETAILS OF THE SAID CORPORATE EXPENSES OF RS. 20,76,32,766/- ARE AS UND ER: LOCATION CONNECTIVITY PERSONNEL COSTS SELLING MARKETIN G EXP ADMIN & OTHER EXPS DEPRECIATIO TOTAL (RS) KOLKATTA 578,000 309,116 98,402 484,246 1,015,952 2,485,716 JAMSHEDPUR 1,013 32,000 1,520 7,480 15,693 57,706 DELHI 1,257,000 1,164,669 370,753 1,824,512 3,827,842 8,4 44,776 JAIPUR - 19,526 6,216 30,589 64,175 120,506 LUCKNOW - 15,872 5,053 24,864 52,165 97,953 BANGALORE 8,585 40,469 12,882 63,396 133,005 258,338 CHENNAI 68,213 321,545 102,358 503,716 1,056,800 2,052,631 HYDERABAD 36,206 170,670 54,330 267,363 560,929 1,089,498 PONDECHERY 2,802 13,208 4,205 20,691 43,410 84,315 AHMEDABAD 40,693 191,824 61,064 300,501 630,454 1,224,536 BARODA 2,941 35,700 4,412 21,714 45,557 110,324 NAGPUR 2,904 13,689 4,358 21,444 44,989 87,383 PUNE-OTHER THAN STP 223,552 1,803,795 367,422 1,650,822 3,463,439 7,509,030 MAHAPE ESII 2,897,000 11,828,766 3,497,282 19,739,471 41,413,575 79,376,094 TALOJA 629,239 2,966,148 944,223 4,646,618 9,748,643 18,93 4,871 TALOJA INFRA 13,506 63,665 20,267 99,734 209,243 406,415 BALLARD ESTATE MUMBAI 2,974,360 15,076,202 5,281,197 23,617,616 49,549,956 96,499,331 (MASJID, WADALA) - TOTAL 6,900,000 32,525,680 10,354,000 50,953,086 106,900,000 207,632,766 FROM THE AFORESAID BREAK-UP OF EXPENSES, IT IS ABUN DANTLY CLEAR THAT EXPENSES OF RS. 20,76,32,766/-, WHICH ARE INCU RRED AT VARIOUS BRANCHES OF THE COMPANY ALL OVER INDIA, HAV E NO CONNECTION WITH THE EOU UNITS LOCATED AT MAHAPE, NA VI MUMBAI. THEREFORE, IT WAS WRONG ON THE PART OF THE AO TO RE -LOCATE A PART OF THESE EXPENSES TO THE EOU UNITS OF THE COMPANY O N THE BASIS OF PERCENTAGE OF THE TURNOVER OF THE COMPANY VIS-- VIS THE TURNOVER OF STP UNITS. IT IS FURTHER SUBMITTED THAT THE EXPENSES OF RS. 20 ,76,32,766/- ALSO INCLUDE DEPRECIATION AMOUNTING TO RS. 10,69,00 ,000/-. THE DEPRECIATION COSTS WAS FOR THE ASSETS LYING IN COMM ON DIVISIONS AT VARIOUS ABOVE MENTIONED LOCATIONS. THE SAID DEPR ECIATION CAN BE APPORTIONED OVER NON EOU UNITS AND NOT ON THE EO U UNITS AS THESE ASSETS DID NOT FORM PART OF THE FIXED ASSETS OF THE EOU UNITS. THE ACTION OF THE AO IN APPORTIONING EVEN TH E DEPRECATION COST OVER THE EOU UNITS IS THEREFORE ABSOLUTELY UNW ARRANTED. IN THE LIGHT OF THE ABOVE, IT IS APPARENT THAT APPO RTIONING THE M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 5 CORPORATE OFFICE EXPENSES ON 100% EOU UNITS WAS NOT AT ALL REQUIRED, SINCE THE APPELLANT WAS RUNNING ALL THE U NITS SEPARATELY WITH SEPARATE PERSONNEL COSTS AND WITH S EPARATE BOOKS OF ACCOUNT. THE DEDUCTION U/S. IOB CLAIMED BY THE COMPANY WAS BASED ON THE CERTIFICATE ISSUED BY THE AUDITORS OF THE COMPANY 8. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED, I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT CAREFULLY. I HAVE ALSO GONE THROUGH THE CONTENTIONS OF THE A.O. THE EOU UNITS OF THE APPELLANT ARE LOCATED AT MAHAPE, NAVI MUMBAI. NON EOU UNITS ARE LOCATED ALL OVER THE COUNTRY. OBVIOUS LY, THE EXPENSES OF RS.20,76,32,766/- WHICH HAVE BEEN INCUR RED AT VARIOUS BRANCHES OF THE COMPANY ALL OVER INDIA HAVE NO CONNECTION WITH EOU UNITS WHICH ARE LOCATED AT MAHA PE, NAVI MUMBAI. THE A.O. HAS DRAWN INCORRECT CONCLUSION AND WRONGLY ALLOCATED PART OF THE EXPENSES TO THE EOU UNITS ON THE BASIS OF THE PERCENTAGE TURNOVER. THE SIMILAR ISSUE ALSO CAM E UP FOR ADJUDICATION BEFORE ME IN THE APPELLANT'S OWN CASE FOR A.Y. 2005-06 WHERE THE EXPENSES WERE RE-ALLOCATED BETWEE N NON- EOU AND EOU UNITS. AFTER DUE VERIFICATION OF FACTS, THE RE- ALLOCATION OF EXPENSES WERE DELETED BY MY APPELLATE ORDER NO.CIT(A)-4/ADDL. CIT RANGE 2(1)/I.T.-400/08-09 DAT ED 23.04.2010. FOLLOWING MY ORDER FOR AY 2005-06, THE DISALLOWANCE MADE BY THE AO IS THEREFORE HELD AS UN JUSTIFIED AND HENCE DELETED. THE APPELLANT IS THEREFORE ELIGI BLE FOR FULL CLAIM U/S.10B OF I. T. ACT AMOUNTING TO RS. 85,52,5 5,884/-. THE AO IS DIRECTED TO ALLOW DEDUCTION OF RS. 85,52,55,8 84/-. 9. THE CIT(A), THUS ALLOWED FULL ALLOWANCE OF DEDUCTION, U/S 10B OF THE INCOME TAX ACT, 1961, FOR THE UNIT CLAIMED BY THE ASSESSEE. 10. AGAINST THIS ORDER, THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 11. BEFORE US THE AR SUBMITTED THAT THE ORDER ON MERIT S IS CORRECT ON FACTS AND THEREFORE ORDER OF THE CIT(A) SHOULD BE SUSTAINED ON MERITS, WHEREAS, THE DR RELIED ON THE ORD ERS OF THE AO. 12. AFTER HEARING THE ARGUMENTS OF THE CONTESTING PARTIES , AND ALSO PLACING RELIANCE ON THE ORDER OF THE ITAT IN ASSESSEE OWN CASE IN ITA NO. 5245/MUM/2010 FOR ASSESSMENT YEAR 2005 -06, M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 6 WE DO NOT FIND ANY REASON TO DEVIATE OR DISTURB THE DEC ISIONS BASED ON FACTS, DULY EXAMINED BY THE REVENUE AUTHORITIES . WE, THEREFORE, REJECT THE GOA AS FILED BY THE DEPARTMENT AND AS A CONSEQUENCE, WE DISMISS THE APPEAL AS FILED BY THE DEPARTMENT. 13 . ON THE OTHER HAND, THE ASSESSEE HAS TAKEN A SOLITARY GROUND ON LEGALITY OF THE REASSESSMENT PROCEEDINGS THAT HAVE REACHED THE ITAT. 14. THE ASSESSEE HAS CHALLENGED THE REASSESSMENT PROCEEDINGS, INITIATED AFTER THE SIX YEAR OF CLOSE OF THE ASSESSMENT YEAR. THE FACTS ARE: RE TURN FILED 31.10.2002 143(1) 03.03.2003 148 NOTICE 03.11.2005 RETURN IN RESPONSE TO 148 14.10.2005 ASSESSMENT U/S 143(3)/148 29.12.2006 CIT(A) ORDER ON THE IMPUGNED ISSUE 13.12.2007 ORDER GIVING EFFECT TO CIT(A) ORDER 25.02.2008 NOTICE U/S 148 31.03 .2009 RETURN IN RESPONSE TO 148 24.04.2009 ASST. U/S 143(3) /148 22.12.2009 15. THE ASSESSEE HAS RAISED TWIN OBJECTIONS, I.E. NOTICE ISS UED AFTER SIX YEARS OF THE ASSESSMENT YEAR UNDER CONSIDERA TION AND INITIATION OF REOPENING OF REASSESSMENT PROCEEDINGS ON CHA NGE OF OPINION. 16. THE DR ARGUED THAT THE ACT HAS NOT INSERTED ANY E MBARGO ON ISSUE OF NOTICE U/S 148 AND ARGUED THAT THE DEPARTM ENT IS AT LIBERTY TO INITIATE PROCEEDINGS FROM AS MANY TIMES. 17. ON THE OTHER HAND, THE AR SUBMITTED THAT THE INITIAT ION OF PROCEEDINGS U/S 148 COULD BE DONE FOR AS MANY TIMES, BUT THE ACT HAS CERTAINLY LAID CERTAIN GUIDELINES ON WHICH THE DEPARTMENT CAN INITIATE REASSESSMENT PROCEEDINGS, FIRST AM ONGST WHICH IS TIME LIMIT FOR NOTICE, I.E. SECTION 149(1) M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 7 (A) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER CLAUSE (B) OR CLAUSE (C); (B) IF FOUR YEARS, BUT NOT MORE THAN SIX YEARS, HA VE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE FOR THAT YEAR; 18. THE AR POINTED OUT THAT THE ACT IS VERY CLEAR TO SA Y AND USE THE EXPRESSION, RELEVANT ASSESSMENT YEAR FOR THAT YEAR . 19. THUS ACCORDING TO THE AR, THE AO ERRED IN INITIATING T HE CURRENT REASSESSMENT PROCEEDINGS ON 31.03.2009, WHICH IS BEYOND SIX YEARS FROM THE END OF THE RELEVANT ASSESSME NT YEAR, WHICH IS ASSESSMENT YEAR 2002-03. 20. BESIDES THIS, THE AR ALSO SUBMITTED THAT AO RESORTED TO REOPENING TWICE ON THE SAME ISSUE, I.E. COMPUTATION OF EXEMPTION U/S 10B, WHICH CLEARLY FALLS WITHIN THE PURVIEW OF CHANGE OF OPINION AND IN ANY CASE ANY INITIATION THAT HAS T O BE LEGAL MUST HAVE THE FOUNDATION OF TANGIBLE MATERIAL, IF THE REOPENING IS AFTER THE FOUR YEARS PERIOD. 21. THE AR, PLACED RELIANCE ON DYNACRAFT AIR CONLIST U/S SNEHA JOSHI 355 ITR 102 (BOM) OHM STOCK BROKERS (P) LTD VS CIT 351 ITR 443 (BOM) ALLANASONS LTD. VS DCIT 107 DTR 62 (BOM) TITANOR COMPONENTS LTD VS ACIT 60 DTR 2 73 (BOM) 22. THE AR, THEREFORE, SUBMITTED THAT THE CURRENT INITIATION OF REASSESSMENT PROCEEDINGS IS BAD IN LAW. 23. WE HAVE HEARD THE RIVAL ARGUMENTS AND HAVE CONSIDER ED THE DATE CHART AND THE VARIOUS DECISIONS OF THE HONBLE BOMBAY HIGH COURT AND THE FACTS, WHICH SINGULARLY POINT TOWARDS O NE ISSUE, I.E. COMPUTATION OF ELIGIBILITY OF EXEMPTION U/S 10B. WE CERTAINLY CANNOT ACCEPT THE ARGUMENT OF THE CIT(A) THAT INITIAL INITIATION OF REASSESSMENT PROCEEDINGS WAS TO EXAMINE THE M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 8 ACCEPTABILITY OF CLAIM OF EXEMPTION U/S 10B AND THE CURREN T ONE IS TO RESTRICT THE EXEMPTION. THIS IS BECAUSE, THE AO HAD THE OCCASION TO EXAMINE THE DETAILS FILED BY THE ASSESSEE, WHICH WERE CONSIDERED NOT ONLY BY THE AO BUT ALSO BY THE CIT(A), WH O IN THE INITIAL PROCEEDINGS DIRECTED THE AO TO ALLOW THE DEDUCTION A S PER LAW. 22. IN THE CURRENT PROCEEDINGS ALSO, THE REVENUE AUTHOR ITIES EXAMINED THOSE VARY DETAILS TO COME TO A DIFFERENT CONCLUS ION. THIS, IN OUR VIEW, THE CASE WOULD CLEARLY FALL WITHIN THE RATIO LAID DOWN HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KELV INATOR OF INDIA, REPORTED IN 256 ITR 1 (DEL-FB), APPROVED BY THE HONBLE SUPREME COURT IN AS REPORTED IN 320 ITR 561 (SC). 23. THE HONBLE SUPREME COURT HAS EMPHASIZED THAT IT IS ESSENTIAL TO HAVE, REASON TO BELIEVE TO REOPEN THE PROCEEDINGS, THIS FACT, WE DO NOT FIND ANYWHERE IN THE ORDER OR NOTICE. THIS HAS SINCE BEEN FOLLOWED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SITARA DIAMOND (P) LTD VS DCIT REPORTED IN 2 62 CTR 299 (BOM). 24. ANOTHER MAJOR DISCREPANCY NOTICED DURING THE COURS E OF ARGUMENTS IS THAT THERE IS NO MENTION OF AUTHORIZATION OF A HIGHER AUTHORITY TO INITIATE THE CURRENT REASSESSMENT PROCEEDINGS. HONBLE BOMBAY HIGH COURT IN THE CASE OF DSJ COMMUNICATIONS VS DCIT, REPORTED IN 222 TAXMAN 129 (BOM), HELD THAT APPROVAL OF CIT IS MANDATORY. SINCE THERE IS NO MENTION OF THE APPROVAL SOUGHT FROM THE CIT ON THE REAS ONS, AS RECORDED BY THE AO TO INITIATE REASSESSMENT PROCEEDINGS , THE ENTIRE INITIATION HAS BEEN VITIATED AND BECOME BAD IN LAW. 25. CONSIDERING THE FACTS ALONG WITH THE DECISIONS OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE SUPREME COUR T IN THE CASE OF KELVINATOR OF INDIA LTD ( SUPRA ), WE ARE OF THE OPINION M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 9 THAT THE INITIATION OF REASSESSMENT PROCEEDINGS WAS BAD IN LAW, WHICH WE STRIKE IT DOWN AS NULL AND VOID AND THEREFORE ALL CONSEQUENTIAL PROCEEDINGS ARE ANNULLED. 26. IN THE RESULT, APPEAL AS FILED BY THE ASSESSEE IS ALLOWED. AS A RESULT, ITA NO. 6971/MUM/2010: BY THE DEPARTMENT IS DISMISSED ITA NO. 6416/MUM/2010 BY THE ASSESSEE IS ALLOWED ITA NO. 1246/MUM/2012 : DEPARTMENT APPEAL : 28. IN THE INSTANT APPEAL, GROUNDS ARE IDENTICAL TO THE G ROUND AS DISPOSED OFF BY US IN ITA NO. 6971/MUM/2010, WHEREIN, FOLLOWING EARLIER ORDER OF THE ITAT IN ITA NO. 5245/MUM/2010 FOR ASSESSMENT YEAR 2005-06 WE HAVE REJECTED THE GOA AND DISMISSED THE APPEAL FILED BY THE DEPARTMENT. 29. FOLLOWING THE SAME, WE REJECT THE GOA IN THE CURRENT YEAR AS WELL AND DISMISS THE APPEAL AS FILED. 30. IN THE RESULT, ITA NO. 6971/MUM/2010: BY THE DEPARTMENT IS DISMISSED ITA NO. 6416/MUM/2010 BY THE ASSESSEE IS ALLOWED ITA NO. 1246/MUM/2012 DEPARTMENT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JANUARY, 2015. SD/- SD/- ( ) ( ) + + + + + + + + (R C SHARMA) ( VIVEK VARMA ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 2 ND JANUARY, 2015 M/S GTL LIMITED ITA 6416/M/2010 ITA 6971/M/2010 ITA 1246/M/2012 10 %/ COPY TO:- 1) / THE APPELLANT. 2) ! / THE RESPONDENT. 3) THE CIT(A)-4, MUMBAI. 4) THE CIT- II, MUMBAI. 5) /#01 %' , , / THE D.R. G BENCH, MUMBAI. 6) 123 4 COPY TO GUARD FILE. +,' / BY ORDER / / TRUE COPY / / 5 / 6 , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *896' #.'. *CHAVAN, SR.PS