TMI Blog2014 (2) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of first reason was not justified. The assessee had furnished the break up of interest and dividend income - The assessee had received dividend income only from one company i.e. DLF Power Ltd. – thus, this information was also before the Assessing Officer before passing of the original assessment order as the assessee had submitted complete particulars to him and no further enquiries were sought by the Assessing Officer - Therefore, the reopening on account of second reason was also not justified as the full material facts were before Assessing Officer and there was no failure on its part – there was no infirmity in the order of the CIT(A) – decided against Revenue. - ITA No.755/Del/2013 - - - Dated:- 23-8-2013 - Diva Singh And T S Kapoor, JJ. For the Appellant : Dr. Sudha Kumar, Sr (DR) For the Respondent : Shri R S Singhvi, CA ORDER:- PER : T S Kapoor This is an appeal filed by the revenue against the order of Ld CIT(A) dated 29.11.2012. The grounds raised by the revenue are as under:- 1. Whether the CIT(A) under the facts and circumstances of the case and in law was justified in quashing the reopening of the assessment u/s 147 of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance sheet and computation of income of the said Trust are also enclosed evidencing that the said amount has also been offered for tax by the Trust. Thus the assessee is claiming Rs. 7,40,000/- as deduction @ 30% of Rs. 24,68,,000/- which is apparently not allowable to the assessee as assessee has themselves said that this income is not assessable in their hands during assessment proceedings of assessment year 2006-07. Besides this the assessee has paid this amount to DLF Trust and has debited the entire amount of Rs. 24,68,000/- to P L A/c claiming it as its business expenditure. This expenditure is not related to business activities of the assessee company and hence not allowable. Similarly the claim of TDS on rent of Rs. 5,03,4723/- is also not to be allowed against the income accrued. In conclusion assessee has wrongly claimed Rs. 24,64,000/- as business expenditure, wrongly claimed statutory deduction u/s 24 of IT Act amounting to Rs. 7,40,000/- and wrongly claimed credit of TDS of Rs. 5,03,472/- against its assessed income. All this have resulted in the escapement of income due to failure on part of the assessee to report all the facts relating to assessment of correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.12.2004 relating to details of interest and dividend income which was replied vide item No.9 of appellant's letter dated 22.12.2004. 4. In view of the above it was submitted that during assessment proceedings, the assessee was specifically required to file information on certain points and these were filed. Therefore, the assessee had made full disclosure and had declared truly all necessary material facts for computation of its income and there was no failure on its part and thus there was no occasion for escapement of income and consequent reopening within the meaning of section 147 of the Act. Reliance in this respect was placed on a number of judicial pronouncements with the proposition that once the assessee had disclosed fully and truly all information relating to specific query, the reopening after a period of four years without having noted any failure on the part of assessee was illegal. The following case laws were relied:- 1. CIT v. Shree Rajasthan Syntex Ltd. 217 CTR 209 (Raj.). 2. CIT v. SIFL Stock Broking Ltd. 325 ITR 285 (Del.). 3. Garden Silk Mills Ltd. v. DCIT 222 ITR 68 (Guj.). 4. Jindal Photo Films Ltd. v. DCIT 234 ITR 170 (Del.). 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order sheet entry dated 6.12.2004 which was replied by the appellant vide its letter dated 22.12.2004. This clearly shows that in the original assessment proceedings the Assessing Officer had applied his mind on these issues. It is seen from the assessment order that the Assessing Officer accepted the explanation/clarification submitted by the appellant vide its reply dated 27.9.2004 and 22.12.2004 during the course of original assessment proceedings. This establishes that Assessing Officer had applied his mind and he was satisfied with the entries passed with reference to rent received from Shri Ram School, deduction claimed u/s 24(a), claim of TDS deducted by Shri Ram School and dividend income shown by the appellant. All these facts prove that assessment was completed by the Assessing Officer after proper application of mind to the provisions of the Act and details submitted by the appellant. The appellant had filed its return of income with computation of income wherein the profit was calculated as per the provisions of the Act. It is contended by the appellant that during the course of original assessment proceedings the Assessing Officer has examined all details releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided on merits. 8. The Ld AR, on the other hand, submitted that original assessment was completed u/s 143(3) and notice for reopening was given after a period of four years from the close of assessment year under question. Highlighting the facts of the case the Ld AR submitted that Assessing Officer reopened the case on account of two reasons i.e. one for rent and another for disallowance u/s 14A of the Act. He further submitted that before reopening of the case, the CIT had assumed jurisdiction u/s 263 of the Act and had directed the Assessing Officer to pass a fresh order after making the disallowance u/s 14A of the Act. He further submitted that the said order u/s 263 was quashed by Hon'ble Tribunal and our attention was invited to paper book pages 64 to 75 where a copy of Tribunal's order was placed. He further argued that in respect of rent, even Commissioner u/s 263 did not raise any objection. Therefore, in view of the above, he argued that original assessment was completed u/s 143(3) and then again assessment order was made u/s 143(3) read with section 263/. Our attention was invited to paper book pages 76 to 78 where a copy of questionnaire dated 21.9.2004 was placed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 DTR 33 and M/s Replika Press (P) Ltd. v. ACIT 90 DTR 350 (Del.). In view of the above, it was argued that all material relating to rent was available with the assessee. 10. In her rejoinder, the Ld DR submitted that assessee had not disclosed full particulars and assessee ought to have declared that the property was not in its name. With respect to AR's arguments on the order of Tribunal in which addition u/s 14A was deleted Ld DR submitted that after the order much water has flown and many things have changed, specifically she relied upon the case law of Maxopp Investment decided by the Hon'ble Delhi High Court reported in 347 ITR 272 Therefore, in view of the order of Hon'ble Delhi High Court in respect of Maxopp Investment (supra) she argued that ITAT order cannot be relied upon and therefore again argued that the issue be decided on merits. 11. We have heard the rival submissions of both the parties and have gone through the material available on record. The core issue in this case is regarding applicability of section 147 of the Act. So, therefore, it is salutary on our part to go through the provisions of section 147 which reads as under:- If the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was received. The assessee had furnished all the details regarding names and addresses vide letter dated 27.9.2004 placed at paper book pages 79 to 82. The break up of rent received is at page 82. From this break up we find that the amount of Rs. 24,68,000/- has been reflected in this break up. The Assessing Officer during original assessment proceedings has treated an amount of Rs. 11,05,55,980/- as income from other sources instead of income from house property on the basis that the property was not owned by the assessee. The amount thus disallowed as income from house property consisted of property at DLF Centre as is apparent from paper book page 82 where the detail of other property i.e. of Shri Ram School is also placed. If the Assessing Officer had assessed a part of income from house property as income from other sources on the basis of certain material he was free to make addition in respect of property of Shri Ram School also which he did not whereas same material was before him. Therefore, keeping in view all these facts, we are of the considered opinion that there was no failure on the part of assessee and therefore reopening on the basis of first reason was not justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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