ITO 12 (2)(2), MUMBAI V. M/S E WASTE RECYCLING PVT LTD., MUMBAI

ITA 7017/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9959 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 15-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 13; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY (JM) ITA NO. 7017 /MUM/2019 ASSESSMENT Y EAR: 2013 - 14 INCOME TAX OFFICER 12 (2)(2 ), ROOM NO. 1 46A , 1 ST FLOOR, AAYAKAR BHAVAN, M.K. CHURCHGA TE , MUMBAI - 400020 VS. M/S E WASTE RECYCLING PRIVATE LIMITED, D - 1102, PANCHSHEEL HIGHTS, MAHAVIR NAGAR, NEAX AXIS BANK, KANDIVALI (W), MUMBAI - 400067 PAN: AACCE5132A (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SAURABH KUMAR RAI (DR) ASSESSEE B Y : NONE DATE OF HEARING : 27 /05 /202 1 DATE OF PRONOUNCEMENT: 09 / 0 7 /202 1 O R D E R THIS IS AN A PPEAL BY THE REVENUE AGAINST ORDER DATED 23.08.2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 20, MUM BAI FOR THE ASSESSMENT YEAR 2013 - 14 . 2 . WHEN THE APPEAL WAS CALLED FOR HEARING NO ONE APPEARED ON BEHALF OF THE ASSESSEE TO RE PRESENT THE CASE. HOWEVER, CONSIDERING THE NATURE OF DISPUTE, I PROCEED TO DISPOSE OF THE APPEAL AFT ER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND WITH THE ASSISTANCE OF MATERIALS ON RECORD. 3 . BRIEFLY THE FACTS ARE, THE ASSESSEE IS A RESIDENT COMPANY STATED TO BE ENGAGED IN RECYCLING OF PLASTIC WASTE. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSES SEE FILED ITS RETURN OF INCOME ON 19.03. 2013 DECLARING TOTAL INCOME OF RS. 27,09,340/ - . ASSESSMENT I N CASE OF THE ASSES SEE WAS ORIGINALLY COMPLETED UNDER SECTION 143 (3) OF THE INCOME TAX ACT , 1961 VIDE ORDER DATED 02.03.2016 ACCEPTING THE INCOME RETURN ED . SUBSEQUENTLY, BEING OF THE VIEW THAT INTEREST 2 ITA NO. 7017 / MUM/2019 ASSESSMENT YEAR: 20 13 - 1 4 INCOME RS. 42,33,817/ - SHOWN BY THE ASSESSEE UNDER THE HAD IN COME FROM BUSINESS AND PROFESSION HAS TO BE ASSESSES UNDER THE H EAD INCOME FROM OTHER SOURCES, T HE ASSESSING OFFICER (AO) REOPEN ED THE ASSESSMENT UN DER SECTION 147 OF THE ACT. WHILE PARTICIPATING IN THE ASSESSMENT PROCEEDINGS , THOUGH , THE AS S ESSEE MADE DETAILED SUBMISSIONS JUSTIFYING ITS CLAIM THAT INTEREST INCOME HAS TO BE ASSESSED UNDER THE HEAD INCO ME FROM BUSINESS AND PROFESSION, H OWEVER, THE AO D ID NOT FOUND MERIT IN SUCH SUBMISSIONS. THUS, ULTIMATELY HE COMPLETED THE ASSESSMENT UNDER SECTION 143 (3 ) R.W.S. 147 OF THE ACT ASSESSIN THE INTEREST INCOME UNDER THE HEAD FROM OTHER SOURCES. AGAINST THE ASSESSMENT ORDER SO PASSED, ASSESSEE PREFERRED APPEA L BEFORE LEARNED COMMISSIONER (APPEALS) , INTER ALIA , CHALLENGING THE VALIDITY OF REOPEN ING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. LEARNED COMMISSIONER (APPEALS) HAVING FOUND MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT THE REOPENING OF ASSESSMEN T WAS ON A MERE CHANGE OF OPINION , HELD THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT AS BAD IN LAW AND ACCORDINGLY , ANNULLED THE ASSESSMENT ORDER PASSED. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE AO HAS GIVEN CLEAR - CUT FINDING THAT NO BUSINESS ACTIVITY WAS CARRIED O N BY THE ASSESSEE. THEREFORE, IN ABSENCE OF BUSINESS ACTI VITY AND THERE BEING NO NEXUS BETWEEN THE INTEREST INCOME AND BUSINESS OF THE ASSESSEE, THE INTEREST INCOME WAS RIGHTLY ASSESSED UNDER THE HEAD INCOME FROM OTHE R SOURCES. HE SUBMITTED , IN THE ORIGINAL A SSESSMENT PROCEEDINGS THE AO HAD NOT EXAMINED THIS ASPECT. THEREFORE, THERE IS NO CHANGE OF OPINION. 5. I HAVE C ONSIDERED THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SUBJECTED TO SCRUTINY AND THE AO ORIGINALLY COMPLETED THE ASSESSMENT UNDER SECTION 143 (3) OF THE ACT. I N THE RETURN OF INCOME THE ASSESSEE HAD SHOWN THE INTEREST INCOME UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION. IT IS FURTHER OBSERVED , TO JUSTIFY ITS CLAIM THE ASSESSEE, I N COURSE OF RE - AS SESSMENT PROCEEDINGS, HAD FURNISHED DETAILED SUBMISSIONS STATING THAT AS PER THE MEMORANDUM AND ARTICLE OF ASSOCIATION , 3 ITA NO. 7017 / MUM/2019 ASSESSMENT YEAR: 20 13 - 1 4 THE ASSESSEE CAN ALSO U NDERTAKE T HE BUSINESS OF LENDING/ ADVANCING MONEY OR GIVING CREDIT TO BUSINESS ES, COMPANIES , CORPORATIONS ETC. TO EARN INTEREST. THUS, WHEN IN THE ORIGINAL ASSESSMENT, THE AO AFTER VERIFYING THE RETURN OF INCOME FILED BY THE ASSESSEE HAS ACCEPTED ASSESSEES CLAIM OF INTEREST INCOME SHOWN UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION, THE AO CANNOT REOPEN THE ASSE SSMENT UNDER SECTION 147 OF THE ACT , MERELY FOR CHANGING THE HEAD OF INCOME FROM BUSINESS AND PROFESS ION TO OTHER SOURCES. THIS, IN MY VIEW, DOES NOT COM E IN THE REALM OF INCOME ESCAPING ASSESSMENT. MOREOVER , SUCH REOPENING AMOUNTS TO REVIEW OF THE EARLIER ORDER PASSED BY THE AO ON A MERE CHANGE OF OPINION. THEREFORE, I DO NOT FIND ANY INFIRMITY IN THE DECISION O F LEARNED COMMISSIONER (APPEALS). ACCORDIN GLY, GROUNDS ARE DISMISSED. 6. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JULY , 2021 . SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 09 / 07/2021 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI