M/s R.K.Gupta Contractors & Engineers Pvt. Ltd., Bhopal V. The ACIT 3(1), Bhopal

ITA 85/IND/2012

• Counselvise Citation: 8522714 RSA 2012
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 14-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: H P VERMA; GIRISH AGRAWAL
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148; 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 85/IND/2012 A.Y. 2006-07 M/S R.K. GUPTA CONTRACTORS & ENGINEERS PRIVATE LIMITED BHOPAL PAN AACCR-9291D :: APPELLANT VS ASSISTANT COMMISSIONER OF INCOME TAX 3(1), BHOPAL :: RESPONDENT APPELLANT BY SHRI H.P. VERMA AND SHRI GIRISH AGRAWAL RESPONDENT BY SHRI KESHAV SAXENA DATE OF HEARING 19.06.2012 DATE OF PRONOUNCEMENT 19.06.2012 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 CHALLENGING THE ORDER DATED 22.12.2011, PAS SED BY THE LEARNED FIRST APPELLATE AUTHORITY, BHOPAL. 2 2. THE FIRST GROUND RAISED BY THE ASSESSEE PERTAINS TO CONFIRMING THE DISALLOWANCE OF CLAIM OF RS.1,04,48, 674/- MADE U/S 80IA(4) OF THE ACT. 2.1 THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE CLAIM WAS WRONGLY DISALLOWED. HOWEVER, THE LEARNED CIT DR AT THE OUTSET ASSERTED THAT THE IMPUGNED ISSUE IS COVE RED AGAINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL DATED 28 TH JULY, 2010 FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO. 517 AND 522/IND/2009. THIS FACTUAL MATRIX WAS NOT CONTROVE RTED BY THE LD. COUNSEL FOR THE ASSESSEE EXCEPT BY SAYING THAT THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE AFORESAID ORDER OF THE TRIBUNAL. 2.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE , WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER DATED 28 TH JULY, 2010 :- 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. A CLARIFICATORY EXPLANATION BELOW SUB-SECTION (13) OF SECTION 80IA OF THE ACT WAS INSERTED WITH RETROSPECTIVE EFF ECT FROM 1.4.2000 BY THE FINANCE ACT, 2009 AS PER WHICH NOTH ING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION T O A BUSINESS REFERRED TO IN SUB-SECTION (4) WHICH IS IN THE NATU RE OF A WORKS CONTRACT AWARDED BY ANY PERSON INCLUDING TH E 3 CENTRAL OR STATE GOVERNMENT AND EXECUTED BY THE UNDERTAKING OR ENTERPRISE REFERRED TO IN SUB-SECTIO N (1). THE ASSESSMENT YEAR INVOLVED IN THE PRESENT APPEAL BEIN G 2006-07, THEREFORE, THIS EXPLANATION IS CLEARLY APP LICABLE TO THE FACTS OF THE PRESENT APPEAL. IT HAS BEEN SPECI FICALLY PROVIDED THAT THE PROVISIONS U/S 80IA OF THE ACT SH ALL NOT APPLY TO A BUSINESS REFERRED TO IN SUB-SECTION (4) OF SECTION 80IA OF THE ACT, WHICH IS OF THE NATURE OF WORKS C ONTRACTS. IN SUB-SECTION (1) THE WORD ANY BUSINESS HAS BEEN MENTIONED. IDENTICAL ISSUE HAS BEEN DELIBERATED UP ON AND DECIDED BY THE TRIBUNAL IN THE AFORESAID CASE, THE RELEVANT PORTION WHEREOF HAS BEEN REPRODUCED ABOVE. WE, THER EFORE, HOLD THAT SINCE NO DEDUCTION IS ALLOWABLE TO THE AS SESSEE U/S 80IA OF THE ACT, THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) WAS NOT JUSTIFIED IN GRANTING THE SAM E. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) ON THIS ISSUE IS, THEREFORE, SET ASIDE AND THE APPE AL OF APPEAL OF THE REVENUE IS ALLOWED. 4. AS FAR AS THE APPEAL OF THE ASSESSEE (ITA NO. 522/IND/2009) IS CONCERNED, SINCE WHILE DECIDING TH E APPEAL OF THE REVENUE, WE HAVE HELD THAT NO DEDUCTION U/S 80-IA OF THE ACT IS ALLOWABLE TO THE ASSESSEE, THERE IS NO Q UESTION OF BIFURCATION OF INCOME/RECEIPTS FOR THE PURPOSE OF D EDUCTION U/S 80IA OF THE ACT, THEREFORE, THE DECISION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN THAT REGARD CANNOT BE SUSTAINED BECAUSE THE ASSESSEE IS NOT AT ALL ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. ACCORDI NGLY, THE APPEAL OF THE ASSESSEE IS ALSO DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED WHERE AS THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28 TH JULY, 2010. 2.3 WE FIND THAT WHILE COMING TO THE AFORESAID CON CLUSION, THE TRIBUNAL FOLLOWED THE EARLIER DECISION DATED 2. 7.2010 IN THE CASE OF BIORA INFRASTRUCTURE PRIVATE LIMITED VS. AC IT (ITA NO. 373/IND/2009) AND ANOTHER DECISION DATED 7 TH MAY, 2010 IN THE 4 CASE OF SCC PROJECTS PRIVATE LIMITED VS. ACIT (ITA NO. 127/IND/2009) ON IDENTICAL ISSUE. IN THE ABSENCE OF ANY CONTRARY DECISION BROUGHT ON RECORD BY EITHER SIDE, THIS GRO UND OF THE ASSESSEE IS HAVING NO MERIT, THEREFORE, DISMISSED. 3. SO FAR AS THE ISSUE OF REOPENING OF ASSESSMENT I S CONCERNED, WE FIND THAT ORIGINALLY THE ASSESSMENT WAS FRAMED U /S 143(3) OF THE ACT BY THE LEARNED ASSESSING OFFICER VIDE ASSES SMENT ORDER DATED 29.12.2008 DISALLOWING THE CLAIMED DEDUCTION U/S 80IA TO THE TUNE OF RS.1,04,48,674/- (PAGES 27 TO 33 OF THE PAPER BOOK). THE MATTER TRAVELLED UP TO THE TRIBUNAL AND THE CLA IM OF THE ASSESSEE WAS DISALLOWED. HOWEVER, WE FIND THAT UNDE R THE REASSESSMENT PROCEEDINGS VIDE ORDER DATED 22.12.201 0 FRAMED U/S 143(3) READ WITH SECTION 147 OF THE ACT ALSO TH E DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IA(4) IS ON THE SAME FIG URE I.E. RS. 1,04,48,674/-, THEREFORE, THERE WAS NO VALID REASON WITH THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT U/S 147 READ WITH SECTION 148 OF THE ACT BECAUSE EVEN AFTER INSERTION OF EXPLANATION 3 TO SECTION 147 BY THE FINANCE (NO.2) OF 2009, WITH EFFECT FROM 1.4.1989, THE ASSESSING OFFICER HAS TO ASSESS OR REASSESS SUCH INCOME WHICH HAS ESCAPED ASSESSMENT WHICH MAY BE THE BASIS OF FORMATION OF BELIEF WHEREAS EVE N IN 5 REASSESSMENT THE DISALLOWANCE WAS ON THE SAME FIGUR E, THEREFORE, THERE WAS NO ESCAPEMENT OF INCOME, CONSEQUENTLY, TH ERE WAS NO VALID REASON FOR THE ASSESSING OFFICER FOR REOPENIN G THE ASSESSMENT. IN REASSESSMENT PROCEEDINGS, THE BURDEN IS ON THE REVENUE TO ESTABLISH THAT THERE WAS INCOME WHICH HA S ESCAPED ASSESSMENT. OUR VIEW IS SUPPORTED BY THE DECISION I N TIN MANUFACTURING COMPANY OF INDIA V. CIT (1996) 88 TAX MAN 34/222 ITR 323 (ALL). THE RATIO LAID DOWN IN SITA W ORLD TRAVEL INDIA LIMITED, 140 TAXMAN 381 (DEL) FURTHER SUPPORT S THE CASE OF THE ASSESSEE. EVEN OTHERWISE, THE ASSESSING OFFICER HAS NO POWER TO REVIEW AND HAS ONLY POWER TO REASSESS BUT SUCH R EASSESSMENT HAS TO BE BASED ON FULFILMENT OF CERTAIN PRECONDITI ONS AND UNDER THE GARB OF REOPENING OF ASSESSMENT, REVIEW IS NOT PERMISSIBLE. ONE MUST TREAT THE CONCEPT OF CHANGE OF OPINION A S AN INBUILT TEST TO CHECK ABUSE OF POWER BY THE ASSESSING OFFIC ER. HENCE AFTER 1.4.1988, THERE MUST BE TANGIBLE MATERIAL TO COME T O A CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME, CONS EQUENTLY, FOR THIS ASSESSMENT YEAR, THERE IS A MERIT IN THE SUBMI SSION OF THE ASSESSEE, CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS ALLOWED. 6 4. SO FAR AS OTHER GROUNDS RAISED IN THE GROUNDS OF APPEAL ARE CONCERNED, THE SAME WERE NOT ARGUED, THEREFORE, DIS MISSED IN LIMINE. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 19.6.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 19.6.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-1919