The ITO, Ward-2(4), Surat V. M/s. Shubhlaxmi Petrochemicals, Surat

ITA 743/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0668 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 13-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P CHAUDHURY
• Keywords: Business income; Audit objection; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3)

Judgement Text

I.T.A. NO.743/AHD/13 ASSESSMENT YEAR: 2005 - 06 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM] I.T.A. NO. 743/AHD/13 ASSESSMENT YEAR: 2005 - 06 INCOME TAX OFFICER WARD 2( 4) , AHMEDABAD ............ .APPELLANT VS. SHUBHLAXMI PETROHEMICALS .. . . RESPONDENT [PAN: AAUFS3769G] APPEARANCES BY: O P CHAUDHURY FOR THE APPELLANT URVASHI SHODHAN FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JUNE 0 2, 2016 DATE OF PRONOUNC ING THE ORDER : SEPTEMBER 01 , 2016 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 18 TH DECEMBER 2012, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961, ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ANNULLING THE REASSESSMENT PROCEEDINGS AND DELETING THE ADDITION OF RS 37,72,288 MADE ON ACCOUNT OF EXCISE DUTY EX - EXPENSES PAID ON CAPITAL GOODS PURCHASED WITHOUT APPRECIATING THE FACT THAT INCOME LIABLE T O TAX HAS ESCAPED DUE TO OVERSIGHT AND THE AO HAS JURISDICTION TO REOPEN THE ASSESSMENT. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THIS IS A CASE IN WHICH THE ASSESSMENT WAS REOPENED ON THE GROUND THAT (A) EXCISE DUTY PAID ON THE CAPITAL GOODS WAS WRONGLY ALLOWED AS DEDUCTION; AND (B) VERIFICATION WAS REQUIRED TO ENSURE THAT UNUTILIZED CENVAT CREDIT WAS INCLUDED IN INCOME AD OFFERED TO TAX. IN THE REOPENED PROCEEDINGS, THE DISALLOWANCE WAS MADE I.T.A. NO.743/AHD/13 ASSESSMENT YEAR: 2005 - 06 PAGE 2 OF 3 ONLY IN RESPECT OF THE FIRST ITEM, I.E. RS 37,72,288 AS EXCISE DUTY PAYMENT WAS IN RESPECT OF CAPITAL GOODS AND AS THE SAME WAS NOT DEDUCTIBLE IN COMPUTATION OF BUSINESS INCOME. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL WHO QUASHED THE REASSESSMENT ITSELF AS ALL THE RELEVANT MATERIAL WAS BEFORE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT AND THE REASSESSMENT WAS DONE ON THE BASIS OF AN AUDIT OBJECTION WHICH EVEN THE ASSESSING OFFICER HAS NOT ACCEPTED. THE CIT(A) WAS OF THE CONSIDERED VIEW THAT THE AO HAS NO NEW MATERIAL TO FORM THE OPINION THAT THE INCOME HAS ESCAPED ASSESSMENT. NO NEW FACTS, EITHER BY THE AUDIT PARTY OR BY THE AO, HAVE BEEN BROUGHT ON RECORD. IT WAS ALSO HELD THAT A REASSESSMENT CANNOT BE PERMITTED ONLY ON THE BASIS OF CHANGE OF OPINION . AGGRIEVED BY THE REASSESSMENT BEING QUASHED BY THE CIT(A), THE ASSESSING OFFICER IS IN APPEAL BEFORE ME. 3. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POS ITION. 4. I FIND THAT IT IS NOT EVEN IN DISPUTE THAT ANY FRESH MATERIAL OR INFORMATION CAME TO THE LIGHT SUGGESTING THAT AN INCOME HAS ESCAPED ASSESSMENT. ALL THE RELEVANT MATERIAL WAS BEFORE THE AO AT THE STAGE OF THE ORIGINAL ASSESSMENT ITSELF. THE ONLY NEW INPUT IS AN AUDIT PARTY OBJECTION WHICH THE ASSESSING OFFICER HIMSELF HAS NOT ACCEPTED. ONCE THE AO CONTESTS THE AUDIT OBJECTION AND CONTINUES TO HOLD THE BELIEF AS HE HAD AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS, BUT REOPENS THE ASSESSMENT PROC EEDINGS AS A MEASURE OF ABUNDANT CAUTION NEVERTHELESS, IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAD ANY REASONS TO BELIEVE THAT AN INCOME HAS ESCAPADE ASSESSMENT - A BELIEF WHICH IS A SINE QUA NON FOR REOPENING THE ASSESSMENT. IN VIEW OF THESE DISCUSSIO NS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, I UPHOLD THE ACTION OF THE CIT(A), IN QUASHING THE REASSESSMENT PROCEEDINGS, AND DECLINE TO INTERFERE IN THE MATTER. 5. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 1 ST DAY OF SEPTEMBER, 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: 1 ST DAY OF SEPTEMBER , 2016. I.T.A. NO.743/AHD/13 ASSESSMENT YEAR: 2005 - 06 PAGE 3 OF 3 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTME NTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD