TMI Blog1992 (7) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... id investment allowance for both the years, as stated by the Assessing Officer (AO), was that the order dt. 28th Feb., 1983 of Indore Bench of the Tribunal in ITA No. 558/Ind/82 relating to asst. yr. 1979-80 in the case of the ITO vs. Mittal Ice Cold Storage, Indore was circulated by the CIT by letter dt. 18th May, 1983. In the said order, it was held by the Tribunal that no investment allowance was allowable on cold storage. That order was treated by the Assessing Officer as 'information' within the meaning of s. 147(b) of the Act. On appeal, the CIT(A) held that the reopening of the assessment under s. 147(b) for both the years was bad in law. He observed that at the time of framing the original assessment for the asst. yr. 1981-82, the Assessing Officer had considered the various decisions of the High Courts, viz., CIT vs. Yamuna Cold Storage (1981) 23 CTR (P H) 15 : (1981) 129 ITR 728 (P H), CIT vs. Kanodia Cold Storage (1975) 100 ITR 155 (All), CIT vs. Radhanagar Cold Storage (1980) 18 CTR (Cal) 166 : (1980) 126 ITR 66 (Cal). He also took into account the plea of the assessee that the assessee had manufactured frozen peas and in that process pea seeds were separated from pea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Cold Storage was referred to before the Tribunal. It was binding upon the Tribunal in view of the CIT vs. Smt. Godawari Devi Saraf (1978) 113 ITR 589 (Bom). The Tribunal, however, in the case of Mittal Ice Cold Storage, proceeded on the fact that it was a common ground that in the year of account, the assessee did not manufacture or produce any article. In view of these facts and circumstances, it cannot be said that the Assessing Officer came in possession of any 'information'. It was only a difference of opinion, which came to the knowledge of the Assessing Officer. At this juncture, it may be mentioned that the order of the Tribunal, was, though, upheld by the M.P. High Court, but it was subsequent to the reopening for these two years. It is apparent that the Assessing Officer after having taken into account the various High Court's judgments resorted to the order of the Tribunal, which contained change of opinion. Such order cannot be treated as "information". There is yet another aspect of the matter, namely, that the facts in case Mittal Ice Cold Storage, were not the same as those obtaining in the case of the assessee. The assessee had manufactured frozen peas. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "There was no positive gross total income of the assessee from the Cold Storage Unit. Further, the capital employed was incorrectly computed by adopting the value of depreciable assets as per book value in respect of W.D.V. and the amount of capital subsidy was not deducted from the cost of assets. For these reasons, the deduction under s. 80J to the extent of Rs. 1,14,293 has been wrongly allowed." 9. At this juncture, it needs to the borne in mind that the assessment orders for the instant asst. yr. 1982-83 was subject-matter of appeal before the CIT(A), who by order dt. 12th Dec., 1983 had upheld the deduction under s. 80J. The extent of said deduction was further agitated in appeal before the Tribunal by the assessee and the Tribunal sustained the order of the CIT(A) vide order dt. 27th June, 1985 in ITA Nos. 52 to 55/Ind/1984 relating to asst. yrs. 1980-81 to 1983-84. It is, thus, apparent that the Assessing Officer reopened the assessment for the asst. yr. 1982-83 in utter disregard of the order dt. 27th June, 1985 of the Tribunal and recomputed the income of the assessee in utter disregard of the order dt. 16th Nov., 1987 of the CIT(A). The reopening was obviously bad in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year, in which the claim of deduction under s. 80J has already been decided. Thus, the reopening of the assessment was based on no information, but was only on the basis of change of opinion. Such reassessment order cannot be allowed to stand. We, therefore, find no infirmity in the order of the CIT(A). ITA Nos. 67 68/Ind/88 C.O. Nos. 11 12 (Asst. yrs. 1983- 84 1984-85) 13. These two appeals are apparently misconceived. The ground of appeal taken in these appeals are the same as the grounds of appeal taken for the asst. yrs. 1981-82 and 1982-83. None of the ground of these appeals arise out of the orders dt. 16th Nov., 1987 of the CIT(A) relating to the asst. yrs. 1984-85 and 1985-86. The appeals and the cross-objections, therefore, deserve to be dismissed summarily. ITA Nos. 409/Ind/87 (Asst. yr. 1984-85) and 323/Ind/88 (Asst. yr. 1985-86) 14. The CIT considered the assessment order dt. 22nd May, 1984 for the asst. yr. 1984-85 and that dt. 11th Feb., 1986 relating to asst. yr. 1985-86 erroneous and prejudicial to the interests of the Revenue. He, therefore, by order dt. 30th March, 1987 (for asst. yr. 1984-85) and order dt. 3rd March, 1988 (for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was a rectification on 5th July, 1984 and 28th Dec., 1984 and effect of those orders coupled with the order of the Tribunal dt. 27th June, 1985 was given on 21st Feb., 1986 and the said order was further rectified by the order dt. 17th June, 1986. Thus, what was available to the Commissioner for revision was the order of assessment as finally rectified and not the original assessment order dt. 22nd June, 1984. In this connection, the following observations of Calcutta High Court in the case of Jeevanlal (1929) Ltd. vs. Addl. CIT 1976 CTR (Cal) 391 : (1977) 108 ITR 407 (All) are pertinent: "In this case, the question is whether at the time when the impugned notice (was under s. 263) issued, the order under s. 154 stood by itself as an order of the ITO or not. In my opinion, s. 154, insofar as it rectifies the original order has the effect of rectifying the original order and, therefore, after the order under s. 154 of the IT Act, 1961, was passed, the order was by the order as rectified the order under s. 154." 18. In this view of the matter, the order of the Commissioner under s. 263 for the asst. yr. 1984-85 deserves to be cancelled. 19. Further, it is to be seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this point. Thus, taking the totality of the facts and circumstances, what we find is that the CIT was in error in holding that assessment order erroneous and prejudicial to the interests of the Revenue. 23. In the case of CIT vs. Ratlam Coal Ash Co. (1987) 65 CTR (MP) 305 : (1988) 171 ITR 141 (MP), it has been held by the M.P. High Court that where the assessee had furnished all the requisite information and that the Assessing Officer considering all the facts had completed the assessment, it could not be held that the assessment order was without proper inquiries. For the purpose of holding the assessment order erroneous and prejudicial to the interests of the Revenue, reference to Venkata Krishna Rice Co. vs. CIT (1987) 62 CTR (Mad) 152 : (1987) 163 ITR 129 (Mad) may be made. The order of the CIT under s. 263 is, therefore, cancelled. ITA No. 568/Ind/90 and Co. No. 27/Ind/1991 (Asst. yr. 1984-85) and ITA No. 411/Ind/1991 (Asst. yr. 1985-86) 24. Since the orders of the Commissioner under s. 263 relating to these two years have been cancelled, the reassessment framed in compliance thereof have been rendered nullity and, therefore, these appeals arising out of those reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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