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2019 (1) TMI 287 - ITAT PUNEInitiation of re-assessment proceedings - provision on account of NPA; provision on account of overdue interest; and deduction on account of loss on Government Securities claimed by the assessee in its Profit and loss account - Held that:- Once there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, there can be no reassessment after a period of four years from the end of the relevant assessment year. On this score also, the initiation of re-assessment proceedings cannot be validated. We, therefore, hold that the re-assessment was not properly initiated. As such, all the proceedings flowing from such illegal initiation of re-assessment proceedings are liable to be and are hereby set-aside. Thus, there is no need to discuss the other additions made by the AO/CIT(A) on merits. Equally, the fresh claim made by the assessee in the return filed in response to the notice u/s 148 is also held to be not tenable as the very initiation of reassessment is not legally valid. Addition of Entry fees and Nominal membership fee to the Reserve Funds without routing it through the Profit and loss account - AO treated these amounts as chargeable to tax - Held that:- CIT(A) confirmed the addition by observing that such amounts was received by the assessee from the persons who became members of the society. In the absence of any material coming from the side of the assessee supporting the claim for treating such amounts as not chargeable to tax, we uphold the impugned order to this extent. Addition on account of provision of overdue interest - Held that:- We find that though there is a reference to disallowance of provision for overdue interest of ₹ 1.97 crore on pages 3 and 5 of the impugned order but there is no elaborate discussion on the merits of such ground. Under these circumstances, we set-aside the impugned order to this extent and remit the matter to the file of ld. CIT(A) for passing a speaking order on this issue. Addition u/s 43B - Held that:- In view of the fact that the addition has been deleted by the ld. CIT(A), the assessee has erroneously presumed that this disallowance was confirmed in the first appeal. This ground is dismissed as having become infructuous. Reopening of assessment - Held that:- It is observed that the assessee furnished a return in response to notice u/s.148 at total income of ₹ 5.55 crore as against the originally filed return with an income of ₹ 6.59 crore. The decision taken by the authorities below in not accepting the lower income in the re-assessment is in accordance with the judgment of Hon’ble Supreme Court in the case of CIT Vs. Sun Engineering Works Pvt. Ltd.(1992 (9) TMI 1 - SUPREME COURT). It goes without saying that the re-assessment is carried out for the benefit of the Revenue and not the assessee. In such re-assessment proceedings, the assessee cannot raise fresh independent claims having the effect of reducing the income already declared.
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