ITO, Shimla V. Sh. Devi Parsad Gupta, Shimla

ITA 922/CHANDI/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8361 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Business income; Depreciation; Tangible material; Difference of opinion; Assessment record; Change of opinion
• Section: 143(3); 133(6); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.922/CHD/2012 ( ASSESSMENT YEAR : 2006-07 ) & ITA NO.923/CHD/2012 ( ASSESSMENT YEAR : 2007-08 ) THE INCOME TAX OFFICER, VS. SH.DEVI PARSAD GUPTA, WARD-1, SHIMLA. PROP.M/S SHREE TOOLS, 53, INDUSTRIAL AREA, SHOGHI, DISTT. SHIMLA. PAN: AASPG5232A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL, DR RESPONDENT BY : SHRI VISHAL MOHAN DATE OF HEARING : 10.02.2016 DATE OF PRONOUNCEMENT : 17.03.2016 O R D E R PER RANO JAIN, A.M . : THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA DATED 21.6.2012, RELATING TO ASSESSMENT YEARS 2006-07 AND 2007-08. 2 2. THE ISSUE INVOLVED IN BOTH THESE APPEALS FILED BY THE REVENUE ARE SAME. THEREFORE, BOTH THESE APPEAL S WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.922/CHD/2012 : 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE, PROPRIETOR OF M/S SHREE TOOLS, FILED HIS RETURN FOR THE RELEVANT ASSESSMENT YEAR DECLARING INCOME O F RS.2,16,910/- AFTER CLAIMING DEDUCTION @ 100% OF TH E NET PROFITS UNDER SECTION 80IC OF THE INCOME TAX ACT, 1 961 (IN SHORT THE ACT), AMOUNTING TO RS.93,80,193/-. THE ASSESSING OFFICER AFTER CONSIDERING THE RELEVANT MA TERIAL DISALLOWED A SUM OF RS.18,85,852/- OUT OF DEDUCTION UNDER SECTION 80IC OF THE ACT AND COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THEREA FTER, A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BY T HE ASSESSING OFFICER DATED 21.3.2011 ON THE BASIS OF FOLLOWING REASONS RECORDED : THE BRIEF FACTS OF THE CASE ARE THAT SCRUTINY ASSES SMENT FOR THE ASSESSMENT YEAR 2006-07 WAS MADE U/S 143(3) AND INCOME WAS ASSESSED AT RS.21,02,760/-. WHILE GOING THROUGH ASSESSMENT RECORDS IT HAS BEEN NOTICED THAT IN THE TRADING. P&L ACCOUNT, TOTAL SALES WAS DISCLOSED AT RS . 1,88,58,523/-ANCL DECLARED NET PROFIT AT RS 93,00,43 /-. IN COMPUTATION STATEMENT THE GROSS TOTAL INCOME WAS COM PUTED AT RS.95,97,099/- AND CLAIMED DEDUCTION U/S 80IC AT RS.93,80,193/- AND BALANCE INCOME OF RS.2.16,906/-WAS TAXED UNDER NORMAL PROVISION OF ACT. WHILE MAKING-'SC RUTINY 3 10% OF TURN OVER I.E. RS. 1 8,85.852/-HAS BEEN REDUC ED FROM PROFIT ELIGIBLE DEDUCTION U/S 801C OF THE ACT AND C HARGED TO TAXED. THUS THE DEDUCTION 801C WAS ALLOWED TO THE ASSESSEE AT RS.74,94,341/- (RS.93,80,193/- - RS. 1 8,85,852/-). THE ASSESSEE HAD COMMENCED MANUFACTURI NG ACTIVITY ON 11.04.2005 AND A.Y. 2006-07 WAS FIST IN ITIAL ASSESSMENT YEAR WHEN DEDUCTION U/S 801C WAS CLAIMED . THE BUSINESS OF ASSESSEE WAS MANUFACTURING OF DIAMOND TOOLS FOR CULLING GRANITE, MARBLE, CONCRETE AND STON E. 3. AS PER THE PROVISION OF SECTION 80IC OF IF ACT, THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY PROF ITS AND GAINS DERIVED BY UNDERTAKING OR AN ENTERPRISES FROM ANY BUSINESS REFERRED TO SUB--SECTION 2 OF SECTION 801C, T HERE SHALL, IN ACCORDANCE WITH AN SUBJECT TO THE PROVISION OF THIS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF ASSESSEE, A DEDUCTION FROM SUCH PROFITS & GAINS, AS SP ECIFIED IN SUB-SECTION 3 OF SECTION 801C OF THE ACT. THIS SECTIO N APPLIES TO ANY UNDERTAKING OR ENTERPRISES, WHICH FULFI LLS ALL THE FOLLOWING CONDITIONS NAMELY: I) IT IS NOT FORMED BY SPLITTING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE. II) IT IS NOT FORMED BY TRANSFER TO A NEW BUSINESS OF MACHINERY OF PLANT PREVIOUSLY USED FOR ANY PURPOSE 4. ON GOING THROUGH THE ASSESSMENT RECORDS, IT HAS BEEN NOTICED THAT THE ASSESSEE HAD NOT PURCHASED ANY NEW PLANT & MACHINERY FOR THIS BUSINESS BUT HE HAD INSTALLE D PLANT & MACHINERY AFTER TRANSFERRING FROM HIS SISTER C ONCERN M/S STONAGE INDUSTRIAL DIAMOND PRODUCTS 1/605, VIDYA NAGAR, JAIPUR, IN WHICH ASSESSEE HIMSELF IS A PARTNER. THE PERUSAL OF SISTER CONCERN SCHEDULE OF FIXED ASSETS RE VEALS THAT THE ADDITION IN THE MACHINERY ACCOUNT AT RS.21,65,230/- WAS MADE IN A.Y. 2004-05. THE WRITTE N DOWN VALUE ON 31.03.2004 UNDER THE HEAD PLANT & MACHINERY WAS AT RS.22,27,516/-. OUT OF SAID PLANT & MACHINERY VALUED FOR RS.20,94,215/- HAS BEEN TRANSFE RRED TO UNIT OF ASSESSEE IN FINANCIAL YEAR 2004-05 AND OPEN ING BALANCE ON 01.04.2005 WAS ALSO SHOWN AT RS.20,94,2 I5/-. 4 THE ASSESSEE HAD NOT PURCHASED ANY NEW PLANT & MACHINERY FOR MANUFACTURING ACTIVITY BUT ONLY USED THE OLD MACHINERY WHICH WAS FIXED ASSETS OF THE SAID SISTER CONCERN AND ON TRANSFER OF SAME, THE ASSESSEE USED IN HIS OWN BUSINESS. AS PER REPLY OF ASSESSEE FILED ON 08.12.2008, THE ASSESSEE HAD STATED THAT DURUM THE YEAR 2004-03 OUR FIRM M/S STONAGE INDUSTRIAL DIAMOND PRODUCTS, JAIPUR HAS SHOWED TWO PLANTS AS TRANSFERR ED IN THE SCHEDULE OF FIXED ASSETS. ON 23.04.2004 ONE MACH INE AMOUNTING TO RS.7,58.68 I/- HAS BEEN TRANSFERRED TO UNIT-II OF M/S STONAGE INDUSTRIAL DIAMOND PRODUCTS, JAIPUR V IDE BILL NO.9 AND SECOND MACHINE HAS BEEN SOLD TO M/S SHREE TOOLS ON 09.07.2004 VIDE BILL NO 40. FURTHER ASSESSEE CONTENTE D THAT MANUFACTURING OF THIS MACHINE WAS STARTED IN 1998-99 AND COMPLETED ON OCTOBER 15, 2003 WHEN IT WAS TRANSFERRE D TO PLANT & MACHINERY ACCOUNT, WHICH WAS THEN SOLD TO M/ S SHREE TOOLS ON 09.07.2004 FOR CONSIDERATION OF RS.14,67,528/-. THE OTHER PLANT FOR CONSIDERATION O F RS.7,58,681/- WAS ALSO TRANSFERRED TO PLANT & MACHIN ERY ACCOUNT ON ITS COMPLETION IN THE SAME YEAR. THIS PLA N! WAS ALSO TRANSFERRED TO M/S SHREE TOOLS ON 23.04.2004. T HE ASSESSEE FURTHER STALED THAT NO DEPRECIATION HAS BEE N PROVIDED ON THE MACHINERY TRANSFERRED FROM THE WORK IN PROGRESS AS THE SAME WERE NOT PUT TO USE AS REGARD MANUFACTURING ACTIVITY OF SISTER CONCERN I.E. M/S ST ONAGE INDUSTRIAL DIAMOND PRODUCTS, JAIPUR THEY HAD STALED THAT EARLIER IN YEAR 1991-92 WE HAVE ALSO COMPLETED AND SOLD SIMILAR TYPE OF MACHINERY I.E. SINTERING PRESS PLAN / TO A. MULTINATIONAL COMPANY M/S WINTER DIAMOND TOOLS PLAN T AT BHIWADI AND M/S TECHNIQUE ABRASIVES AL UDAIPUR, HOWEVER THE REAFTER DUE TO BIG STRIKE AND RESULTED LABOUR PROBLEM OUR FIRM HAS STOPPED MANUFACTURING SUCH TYPE OF MACHINE FOR OWN USE. WE HAVE MANUFACTURED DIAMOND TOOLS PLANT WITH TWO SINTERING PRESS MACHINES AND COMMISSIONED THE SAME IN OUR PREMISES AND STARTED PRODUCTION OF DIAMOND WIRE SAW BEADS AND DIAMOND WI RES FOR USE IN GRANITE AND MARBLE QUARRIES. FROM THE ABOVE IT IS CRYSTAL CLEAR THAT THE PLANT & MACHINERY OWNED BY SHREE TOOLS WERE PART OF THE FIXED ASSETS OF ASSESSEE'S SISTER CONCERN I.E. M/S STONAGE INDUSTRIAL 5 DIAMOND PRODUCT, JAIPUR WHICH WAS SUBSEQUENTLY TRANSFERRED TO ASSESSEE'S OWNED BUSINESS. AS REGARD NON CLAIMING OF DEPRECIATION HAS NO WEIGHT BECAUSE DEPRE CIATION FROM ASSESSMENT YEAR 2002-03 IS MANDATORY, WHETHER I T WAS CLAIMED OR NOT, SINCE THESE PLANT & MACHINERY WER E PART & PARCEL OF FIXED ASSETS UNDER THE HEAD PLANT & MAC HINERY OF M/S SLONAGE INDUSTRIAL DIAMOND PRODUCTS, JAIPUR. HENCE, IT IS ESTABLISHED THAT THE ASSESSEE HAD NOT PURCHASED ANY NEW MACHINERY FOR MANUFACTURING ACTIVITY BUT ONLY USE D THE OLD MACHINERY WHICH WAS ASSETS OF THE SISTER CONCERN AND THE ASSESSEE HAD USED SAID MACHINERY IN INS BUSINESS WHICH WAS RECEIVED ON TRANSFER FROM M/S STONAGE INDUS TRIAL DIAMOND PRODUCT. JAIPUR IN WHICH ASSESSEE HIMSELF WAS PARTNER. DUE TO NON PURCHASE OF NEW MACHINERY FOR INDUSTRIAL ACTIVITY, THE ASSESSEE FAILED TO FULFILL T HE CONDITIONS LAID DOWN IN SUB-SECTION 3 OF SECTION 80I C. THEREFORE, THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCT ION U/S 801C OF THE INCOME TAX ACT, 1961. WHICH WAS ALLOWED U/S 143(3) 80IC AT RS.74,94,341/-. IN VIEW OF SAID FACTS 1 HAVE REASONS TO BELIEVE THA T AN INCOME AMOUNTING TO RS.74,94,341/- HAS BEEN ESCAPED FROM ASSESSMENT, AS PER THE PROVISIONS OF SECTION 147 OF THE INCOME FAX ACT, 1961. 3. THE WHOLE BASIS OF REOPENING WAS THAT THE ASSESSEE DID NOT FULFILL AND SATISFY THE CONDITION UNDER SECTION 80IC OF THE ACT AS HE HAS PURCHASED OLD PLA NT & MACHINERY FORM HIS SISTER CONCERN AT JAIPUR , NAMEL Y M/S STONEAGE INDUSTRIAL DIAMOND PRODUCTS. THE ASSESSIN G OFFICER REJECTING THE CONTENTION RAISED BY THE ASSE SSEE COMPLETED THE ASSESSMENT AT AN INCOME OF RS.95,97,1 01/- AFTER DISALLOWING THE DEDUCTION UNDER SECTION 80IC OF THE ACT. 6 4. BEFORE THE LEARNED CIT (APPEALS), IT WAS CONTENDED BY THE ASSESSEE THAT WHILE PASSING ASSESS MENT ORDER UNDER SECTION 143(3) OF THE ACT, THE ASSESSIN G OFFICER HAD GONE INTO THE CONDITION OF ALLOWABILITY OF DEDUCTION UNDER SECTION 80IC OF THE ACT AND CONDUCT ED DETAILED ENQUIRIES AND EXAMINATION OF VARIOUS ASPEC TS OF SECTION 80IC OF THE ACT. EVEN THE ISSUE OF PURCHAS E OF MACHINERY FROM THE SISTER CONCERN M/S STONEAGE INDUSTRIAL DIAMOND PRODUCTS, JAIPUR WAS ENQUIRED BY THE ASSESSING OFFICER IN DETAIL. THE ASSESSEE REFERRED TO A LETTER DATED 24.11.2008 OF THE ASSESSING OFFICER, A COPY OF WHICH WAS SENT TO THE SISTER CONCERN ALSO AND INFOR MATION WAS CALLED FOR UNDER SECTION 133(6) OF THE ACT BY T HE ASSESSING OFFICER. FURTHER, CERTAIN SERIOUS ERRORS WITH REGARD TO VALUE OF PLANT & MACHINERY MENTIONED IN T HE REASONS RECORDED WERE ALSO POINTED OUT, WHICH HAD I N FACT, BEEN ADMITTED BY THE ASSESSING OFFICER IN HIS ORDER PASSED UNDER SECTION 147 OF THE ACT. IT WAS CONTENDED THA T THIS SHOWS THAT THERE WAS NO APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER, WHILE RECORDING REASONS FOR REOPENING. THEREFORE, THE INITIATION WAS MERELY ON CHANGE OF OPINION AND, THEREFORE, THE PROCEEDINGS ARE BAD IN LAW. HEAVY RELIANCE WAS PLACED ON THE ORDER OF THE HON'B LE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC). A NUMBER OF OTHER JUDGMENTS OF VARIOUS HIGH COURTS AS WELL AS THAT OF 7 HON'BLE SUPREME COURT WERE ALSO REFERRED. AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, THE LEARNED CIT (APPEALS) ALLOWED THE APPEAL AND HELD THE PROCEEDIN GS UNDER SECTION 147 OF THE ACT TO BE BAD IN LAW AND Q UASHED THE SAME. 5. AGGRIEVED, THE DEPARTMENT HAS COME IN APPEAL BEFORE THE TRIBUNAL, RAISING THE FOLLOWING GROUNDS OF APPEAL : '1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN QUASHING THE RE-ASSESSMENT ORDER FRAMED BY THE A.O, AFTER RECORDING VALID REASONS FOR RE-OPENING THE ASSESSMENT. '2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THERE WAS NO MATERIAL ON RECORD WP THE A.O. TO REOPEN THE ASSESSMENT U/S 147. '3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED THAT THE ASSESSEE WAS ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IC EVEN AFTER USING PLANT AND MACHINERY WHICH WAS PREVIOUSLY USED BY HIS SISTER CONCERN. ' 4. IT IS PRAYED THAT THE ORDER OF THE LD CIT(A) BE SET- ASIDE AND THAT OF THE A.O. RESTORED. 5. THE APPELLANT CRAVES-LEAVE TO ADD ANY OTHER GROU ND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 6. THE LEARNED D.R. RELYING ON THE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT THE ISSUE OF PURCH ASES FROM SISTER CONCERN M/S STONEAGE INDUSTRIAL DIAMOND PRODUCTS WAS NOT CONSIDERED BY THE ASSESSING OF FICER IN 8 CORRECT PERSPECTIVE IN THE ORIGINAL ASSESSMENT, THE REFORE, THE REOPENING IS CORRECT. 7. THE LEARNED COUNSEL FOR THE ASSESSEE HEAVILY PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT (AP PEALS) AND ARGUED THAT THE REOPENING HAS BEEN INITIATED TO TALLY ON THE BASIS OF CHANGE OF OPINION. TO BRING HOME THE FACT, OUR ATTENTION WAS INVITED TO THE SPECIFIC QUE RY RAISED BY THE ASSESSING OFFICER IN RESPECT OF PLANT & MACH INERY WORTH RS.14,67,528/- FROM THE SISTER CONCERN, WHICH WAS ALSO SENT TO THE SISTER CONCERN. A COPY OF REPLY S ENT TO THE ASSESSING OFFICER BY THE SISTER CONCERN DIRECTL Y TO THE ASSESSING OFFICER IN COMPLIANCE TO NOTICE UNDER SEC TION 133(6) OF THE ACT WAS PLACED IN THE PAPER BOOK FILE D BY THE ASSESSEE. THE REFERENCE TO LETTER DATED 8.12.2008 WAS ALSO THERE AT PAGE 3 OF THE ASSESSING OFFICERS ORD ER MADE UNDER SECTION 143(3) OF THE ACT. IT WAS BROUGHT TO OUR NOTICE THAT IN THE ASSESSING OFFICERS ORDER UNDER SECTION 143(3), DATED 16.12.2008, WHICH RUNS INTO EIGHT PAG ES, SEVEN PAGES ARE DEVOTED TO DEALINGS WITH THE SISTER CONCERN M/S STONEAGE INDUSTRIAL DIAMOND PRODUCTS. RELIANCE WAS AGAIN PLACED ON THE JUDGMENT OF HON'BL E SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA L TD. (SUPRA). 8. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. 9 THE ISSUE HAS BEEN DEALT WITH BY THE LEARNED CIT (A PPEALS) AT PAGE 5 ONWARDS OF HER ORDER, WHICH READ AS UNDER : 4. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDER ED WITH REFERENCE TO THE FACTS OF THE CASE, THE RELEVA NT RECORDS AND THE CASE LAWS RELIED UPON. A PERUSAL OF THE REASONS R ECORDED BY THE LD. A.O. ON 21.03.2011 FOR ISSUING NOTICE U/S 1 48 READ WITH SECTION 147 CLEARLY REVEALS THAT THE ISSUE OF PURCH ASE OF PLANT AND MACHINERY BY THE ASSESSEE FROM HIS SISTER CONCE RN M/S. STONEAGE INDUSTRIAL DIAMOND PRODUCTS, JAIPUR HAD ALRE ADY BEEN EXAMINED AT LENGTH BY THE A.O. AT THE TIME OF O RIGINAL ASSESSMENT PROCEEDINGS. IT IS EVIDENT FORM THE REA SONS RECORDED THAT QUERIES WERE RAISED BY THE A.O. ON TH E GIVEN ISSUE AND THE INFORMATION WAS SUBMITTED BY THE ASSE SSEE IN RESPONSE THERETO. THERE IS NOTHING IN THE REASONS RE CORDED TO INDICATE THAT THE INFORMATION SUBMITTED BY THE ASSE SSEE AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS WAS EITHER FO UND TO BE FALSE OR INCOMPLETE. NOR IS THERE ANYTHING IN THE REASONS RECORDED TO INDICATE THAT THE A.O. HAD COME IN POSSESSION OF SOME NEW INFORMATION WHICH GAVE HIM REASONS TO BELIE VE THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT IN THE CASE OF THE ASSESSEE. A BARE READING OF THE REASONS RECORDED MAKES IT AMPLY CLEAR THAT THE LD. A.O. WAS SIMPLY T RYING TO REINTERPRET THE VERY SAME INFORMATION SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S. THERE IS NO DOUBT THAT THE POWERS OF THE A.O. TO RE-OPEN ASSESS MENT ARE VERY WIDE, BUT THESE ARE NOT PLENARY POWERS. IF THE A.O. HAS ALREADY COME TO A FINDING ON THE FACTS BEFORE HIM A ND DECIDED THE MATTER IN A PARTICULAR WAY, HE MAY NOT HAVE THE POWER TO ISSUE A NOTICE U/S 148 JUST BECAUSE A DIFFERENT INT ERPRETATION OF THOSE FACTS IS POSSIBLE. THE LAW SETTLED BY THE HON'BLE SUPREME COURT IS A/SO CLEAR ON THE POINT. IT IS NOT THE ME RE WHIM OR OPINION OF THE A.O. WHICH WOULD ENTITLE HIM TO INVOKE T HE POWERS FOR REOPENING ASSESSMENT. IN THE CASE OF THE APPELLANT, HIS ELIGIBILITY FOR DEDUCTION U/S 80IC IN THE VERY 10 FIRST YEAR OF ASSESSMENT WAS ASCERTAINED ONLY AFTER ENSURING THAT THE MANDATORY CONDITIONS REQUIRED FOR THE SAID DEDU CTION ARE FULFILLED BY HIM. EVEN IF, FOR THE SAKE OF ARGUMENT , IT IS HELD THAT THE CONCLUSION ARRIVED AT BY THE A.O. ON THE GIVEN FACTS AT THE TIME OF THE ORIGINAL ASSESSMENT WAS NOT CORRECT, IT DOES NOT GIVE A HANDLE TO ANOTHER A.O. FOR REOPENING THE ASSESSMENT PROCEEDINGS ON THE PRETEXT OF DIFFERENT INTERPRETATION OF THE G IVEN FACTS, THE HON'BLE SUPREME COURT HAS HELD IN THE CASE OF KELVI NDATOR OF INDIA LTD. (SUPRA)THAT IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE IF THE CONCEPT OF 'CHANGE OF OPINION' WERE TO BE TOTALLY REMOVED FROM THE AMBIT OF SECTION 1 47 OF THE ACT. THE A. O. HAS POWER TO REOPEN THE ASSESSMENT PROVID ED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT TH ERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. IN THE INSTAN T CASE, THE A.O. DID NOT HAVE ANY SUCH FRESH TANGIBLE MATERIAL TO JUSTIFY THE REOPENING OF THE ASSESSMENT. THE POWER U/S. 147 IS NOT UNBRIDLED AND IS HEDGED WITH SEVERAL SAFEGUARDS CONCE IVED IN THE INTEREST OF ELIMINATING ROOM FOR ABUSE OF THIS POWE R BY THE A.O. THERE MUST BE COGENT MATERIAL BEFORE THE A.O. FOR F ORMING THE BELIEF AND THE CIRCUMSTANCES MUST EXIST. THE SAME C ANNOT BE ASSUMED FOR THE PURPOSE OF EXERCISE OF JURISDICTION FO R REOPENING THE ASSESSMENT. THE LD. A.O. HAS FAILED TO INDICATE ANY DEFICIENCY IN THE FACTS PRESENTED BY THE ASSESSEE D URING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. THERE WA S NOTHING ON THE GIVEN ISSUE FOR WHICH HE HAD NO MATERIAL ON RECORD. THEREFORE THERE EXISTS NO JUSTIFICATION IN INVOKING THE PROVI SIONS OF SECTION 147/148 OF THE ACT. ACCORDINGLY THE INITIATION OF P ROCEEDINGS U/S 147 IS HELD TO BE BAD IN LAW AND THE RE-ASSESSMENT MADE A RESULT THEREOF IS QUASHED. IN VIEW OF THE DECISION ABOVE, THE REMAINING GROUN DS OF APPEAL TAKEN BY THE APPELLANT DO NOT REQUIRE ANY SE PARATE ADJUDICATION. 9. ON PERUSAL OF THE SAME, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS GIVEN BY THE L EARNED CIT 11 (APPEALS). AS AMPLY DEMONSTRATED BY HE LEARNED COU NSEL FOR THE ASSESSEE, THE ISSUE OF SECTION 80IC AND SPE CIFICALLY WITH REGARD TO DEALINGS WITH SISTER CONCERN M/S STO NEAGE INDUSTRIAL DIAMOND PRODUCTS WAS ENQUIRED BY THE ASSESSING OFFICER IN DETAIL DURING THE ORIGINAL ASS ESSMENT PROCEEDINGS. THEREFORE, IT CANNOT BE SAID THAT THI S IS A NEW ISSUE ARRIVING AT THE NOTICE OF THE ASSESSING O FFICER. FURTHER, ON PERUSAL OF REASONS RECORDED, IT IS ALSO SEEN THAT NO NEW MATERIAL WITH REGARD TO SAID DEDUCTION UNDER SECTION 80IC OF THE ACT HAS COME IN POSSESSION OF H E ASSESSING OFFICER AFTER THE ORIGINAL ASSESSMENT. W E OBSERVE THAT TIME AND AGAIN, IN HIS REASONS RECORDE D FOR REOPENING, THE ASSESSING OFFICER IS REFERRING TO TH E ASSESSMENT RECORDS. THIS ALSO FORTIFIES THE FACT THAT THE REOPENING IS INTENDED TO BE MADE ONLY ON THE BASIS OF MATERIAL AND RECORD WHICH WAS ALREADY THERE IN HIS POSSESSION AT THE TIME OF ORIGINAL ASSESSMENT. THI S IS NOT CORRECT WAY OF REOPENING. THIS AMOUNTS TO REVIEW O F ORDER, THE POWERS NOT GIVEN TO THE ASSESSING OFFICE R UNDER THE INCOME TAX ACT. RELIANCE PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) IN NOT OUT OF PLACE. 11. THE APPEAL OF THE REVENUE IN ITA NO.922/CHD/2012 IS DISMISSED. 12 ITA NO.923/CHD/2012 : 12. IT IS RELEVANT TO OBSERVE HERE THAT THE ISSUES IN THIS APPEAL ARE SIMILAR TO THE ISSUES IN ITA NO.922/CHD/2012 AND THE FINDINGS GIVEN IN ITA NO.922/CHD/2012 SHALL APPLY TO THIS CASE ALSO WITH EQUAL FORCE. 13. IN THE RESULT, BOTH THE DEPARTMENTAL APPEALS A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF MARCH, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 17 TH MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 13