TMI Blog2011 (10) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed in respect of the earlier AY which order has been set aside in appeal by this court, therefore, the basis of the order passed by the Tribunal stands knocked down in the present case - Decided against the assessee - ITA No. 53 of 2003 ITA No. 52 of 2004 ITA No. 53 of 2004 ITA No. 246 of 2005 ITA No. 247 of 2005 ITA No. 669 of 2005 - - - Dated:- 14-10-2011 - MR. JUSTICE HEMANT GUPTA, MR. JUSTICE G.S. SANDHAWALIA, JJ. Present: Mr. Rohit Katoch, Advocate for appellant. Ms. Radhika Suri, Mr. Sandeep Goyal, Advocate for respondent HEMANT GUPTA, J. This order shall dispose of the following six appeals at the instance of revenue claiming identical questions of law for the assessment years as mentioned below: - Income Tax Appeal Assessment year Assessee ITA No. 53 of 2003 1990-91 M/s Varinder Agro Chem. Ltd. ITA No. 52 of 2004 1993-94 M/s Industrial Organics Ltd (Now M/s Trident Alco Chem Ltd.) ITA No. 53 of 2004 1994-95 M/s Trident Alco Chem Ltd. ITA No. 246 of 2005 1995-96 M/s Trident Alco Chem Ltd ITA No. 247 of 2005 1997-98 M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee not advanced the interest free loan, the same could have been available to the assessee for repayment of loan and reducing credit balance in Bank. Thus, it was found that the total amount of interest on money advanced to sister concerns comes to Rs. 17,62,622/- which is not allowable as deduction. On 14.8.1992, Commissioner of Income Tax (Appeals) found that disallowance of interest in the case of M/s Ganpati International Pvt. Ltd comes to Rs. 3,47,313/- as against disallowance of Rs. 3,52,212/- made in an order under Section 143(3) of the Act. The order passed by the Assessing Officer was affirmed by the Commissioner of Income Tax (Appeals). However, the Income Tax Appellate Tribunal set aside the order in respect of disallowance of interest claimed on two grounds firstly in view of the earlier order of the Tribunal for the assessment year 1990-91 and secondly, that the assessment has not been reopened on the question of disallowance of interest of amount advanced to other sister concerns, therefore, in view of the judgment of this Court in Vipin Khanna vs. Commissioner of Income Tax and others 255 ITR 220, the Assessing Officer cannot frame assessment in relation to the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under Section 148 read with Section 147(a) But under the substituted Section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to Section 147. The case at hand is covered by the main provision and not the proviso. 18. So long as the ingredients of Section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under Section 147 and failure to take steps under Section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of this Court in the case of Vipin Khanna (supra), when such provision has been inserted with retrospective effect contemplating that the Assessing officer may assess or reassess the income in respect of any issue which has escaped assessment notwithstanding that the reasons for such issues have not been included in the reasons recorded under Sub-Section of Section 148 of the Act. Therefore, we find that the finding of the Income Tax Appellate Tribunal that the original assessment order has attained finality and thus in reassessment proceedings, additions cannot be made is not sustainable. Consequently the said question is decided against the assessee and in favour of the revenue. The question No. 1 is common in all the appeals. Learned counsel for respondent has argued that the Tribunal has decided the appeal in favour of the assessee on the basis of the order passed in assessee s own case for the assessment year 1991-92. It is pointed out that such order of the Tribunal was the subject matter of challenge before this Court in ITA No. 30 of 2002. The question of law has been answered in favour of the revenue and against the assessee vide the order dated 7.11.2006 relying up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be permitted to take a different stand only on account of a subsequent judgment of the Supreme Court. Thus, the plea of commercial expediency having been not raised by the assessee at the stage of assessment cannot be permitted to be raised only on the basis of subsequent judgment of the Hon ble Supreme Court. The appeals against the order passed by the Court is pending consideration before the Hon ble Supreme Court but there is no interim order staying the operation passed by this Court. Therefore as far as this Court is concerned, the matter stands concluded by the judgment reported as Abhishek Industries (Supra). The Tribunal has relied upon the order passed in respect of the earlier assessment year which order has been set aside in appeal by this court, therefore, the basis of the order passed by the Tribunal stands knocked down in the present case. In ITA 53 0f 2004, the learned Commissioner allowed expenses in respect of interest paid on the ground that interest free loans were much less as compared to share application money and cash accruals. The said order has been followed in other cases i.e. ITA 246, 247 of 2005. In ITA 669of 2005, the Commissioner has followe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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