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TMI Blog2014 (7) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... n for re- opening of assessment u/s 147." 3. At the outset, the ld. Counsel for the assessee stated that for the assessment years 1999- 2000, 2000-01 and 2002-03, the returns were processed under section 143(3) of the Act before reopening under section 147 was done. In assessment year 2001-02, the assessment was completed under section 143(3) by the AO vide his order dated 08.03.2004. In all the four years, the AO recorded the identically worded reasons. First the reopening was done for assessment year 1999-2000 and the ld. Counsel for the assessee produced copy of reasons recorded which reads as under: "On going through the assessment records for A.Y. 2000-01 to 2003-04, it found that the "a" firm is an exporter and had claimed deduction u/s 80HHC. It is pertinent to mentioned here that during these periods, it was in receipt of export incentive in the form of DEPB and the same was treated as export receipt for calculating deduction u/s 80HHC. Now, in view of the amendment in Sec 80HHC/ Sec 28 vide the Taxation Laws (Amendment) Act, 2005, the deduction claimed and allowed u/s 80HHC was not correct; i.e. excess deduction was allowed. Since the "a" is having the same nature of bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appears to be much higher than the minimum limit of Rs. 1 lacs. Assessee's original assessment record is not available right now and so a duplicate return is constructed. We are not sure whether income for that year was duly processed or assessed. To be on the safer side case should be reopened with the approval of CIT only. Matter is going to be barred by limitation on 31/03/2007. Proposal for reopening the case sent to CIT, Kol XV." 4. The only issue in the above reasons recorded by the Revenue in all the four years is whether the profit element or the entire sale consideration will fall under clause (iiib) of section 28 of the Act. According to reasons recorded by AO, the entire sale consideration is to be assessed under section 28(iiib) of the Act. Another issue is regarding recomputation of deduction under section 80HHC of the Act of the sale consideration of the DEPB licence. 5. At the outset, ld. Counsel for the assessee has taken us to the reasons recorded, which are reproduced above and stated that relying on the assessment records for the assessment years 2000-01 to 2003-04, the AO has presumed that the assessee may have similar nature of business in these years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er reached the belief that there was escapement of income "on going through the return of income" filed by the assessee after he accepted the return under section 143(1) without scrutiny, and nothing more. This was nothing but a review of the earlier proceedings and an abuse of power by the Assessing Officer. The reasons recorded by the Assessing Officer did confirm the apprehension about the harm that a less strict interpretation of the words "reason to believe" vis-à-vis, an intimation issued under section 143(1) could cause to the tax regime. There was nothing in the reasons recorded to show that any tangible material had come into the possession of the Assessing Officer subsequent to the issue of the intimation. The notice reflected an arbitrary exercise of the power conferred under section 147." 7. Ld. Counsel for the assessee also relied on the decision of the Coordinate Bench in the case of GC Exports -vs- DCIT in ITA No.7662/Mum/2007 for assessment year 2000-01, wherein exactly similar identical issue was decided by the Coordinate Bench by observing in paragraphs 9 and 10 of the order as under: "9. Rival contentions heard. On a careful consideration of the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening itself we do not go into the merits of the case. The appeal filed by the assessee succeeds." 8. We have heard rival contentions and gone through facts and circumstances of the case. We find from the reasons recorded by the AO for reopening by issuing notice u/s. 148 of the Act that the entire belief of the AO was based on the material available before him at the time of processing of return u/s. 143(1) of the Act. The relevant portion of the reasons recorded i.e. the para 1 is being again reproduced for the sake of clarity, which reads as under: "Assessee's return for the year was processed /assessed u/s.143(1) on 12.10.2001 by ITO, Wd.46(4), Kol. On going through the assessment records for A.Y.2000-01, it is found that the assessee firm is an exporter and had claimed deduction /s.80HHC Rs. 95,44,702. During this year, its business turn Over was Rs. 23,88,50,143 and received export incentive Rs. 2,65,84,656." From the above reasons recorded, it is clear that the Assessing Officer reached the belief that there was escapement of income, on the basis of return filed by the assessee, after he accepted the return under section 143(1) without scrutiny, and nothing more. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this extent that the operation of the said section could be given effect from the date of amendment and not in respect of earlier assessment years whose export turnover is above Rs. 10 Crore. And further held that this retrospective amendment should not be detrimental to the appellant's, In view of the aforesaid decision the appellant now need not required to comply with two conditions attached with the 3rd proviso to section 80 HHC(3). Hence, the appellant is further liable for deduction u/s 80 HHC on the profit on transfer of DEPB i.e, Rs. 1,80,961/-." The computation is not required to be reproduced here again for the sake of repetition, as the same is given in the order of CIT(A). 11. We find that the issue of profit element from sale of DEPB licence to be assessed is clearly covered by the decision of the Hon'ble Supreme Court in the case of Topman Exports Vs. CIT (2012) 342 ITR 49 (SC), wherein it is held that the face value of DEPB will fall under clause (iiib) of Section 28 of the Act and hence, the same is eligible for deduction u/s 80 HHC of the Act irrespective of any restriction of export turnover. Further, the Hon'ble Gujarat High Court has already quash ..... X X X X Extracts X X X X X X X X Extracts X X X X
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