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TMI Blog2014 (7) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, the re-assessment proceedings are void ab initio. 3. Because the 'deemed' return filed pursuant to Notice u/s.147 being belated the CIT(A) has erred on fact and in law in upholding the reassessment framed u/s. 147/143(3), the reassessment framed is void abinito and be quashed. 4. Because the CIT(A) has wrongly interpreted the grounds of appeal regarding 263 and reopening u/s.147 (both being independent) and has arbitrarily held that the appellant himself has conceded that the reassessment framed is valid." 3. It was submitted by Learned A.R. of the assessee that reopening is on the basis of same old material and no new material has been brought on record by the Assessing Officer for the purpose of reopening, therefore, reopening is not justified. In support of his contention, reliance was placed by him on the following judicial pronouncements: (i) Ratna Traji Reality Services Pvt. Ltd. vs. Income Tax Officer [2013] 356 ITR 493 (Guj.) (ii) CIT vs. Orient Craft Ltd. [2013] 215 Taxman 28/29 Taxmann.com 392 (Delhi) (iii) HV Transmissions Ltd. vs. Income Tax Officer, I.T.A. No.2230/Mum/2010 assessment year 2001-02 (iv) ACIT vs. Star Ferro Alloys (P) Ltd. [2004] 90 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of income is there and reopening is made by the Assessing Officer after recording valid reasons and hence, the assessee does not get any help from this judgment. 5.2 The second judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Delhi High Court rendered in the case of Orient Craft Ltd. (supra). In this case, the facts are that return of income was filed by the assessee claiming deduction u/s 80HHC and 10B of the Act. It is also noted that the Assessing Officer issued intimation accepting return u/s 143(1) and later on, he sought to reopen proceedings on the ground that there was escapement of income. It is also noted that the Assessing Officer reached this belief merely on going through the return of income and nothing more. In the present case, as per the written submissions filed by the assessee before CIT(A), copy of which is available on page 1 to 7 of the paper book, it is stated by the assessee on page No. 2 that the notice u/s 147 has been issued by the Assessing Officer on the basis of same reason that he has come across in the assessment order for assessment year 2004-05 and made addition therein. The return for assessment year 2004-05 was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scrutiny assessment for assessment year 2004-05 on the basis of which the Assessing Officer came to the conclusion that there was escapement of income and the purpose was not to make roving enquiry and therefore, this Tribunal decision is not relevant in the facts of the present case. 5.5 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Bombay High Court rendered in the case of Balkrishna Hira Lalwani (supra). In this case, it was held that clause No. 35 of the partnership deed on the basis of which the Assessing Officer formed the belief that there is escapement of income has no application whatsoever to a situation where a partner retired mandatorily upon attaining the age of superannuation of seventy years and under these facts, it was held that there was no tangible material before the Assessing Officer to form a conclusion that income had escaped assessment. In the present case, the facts are different and the formation of belief by the Assessing Officer is not defective as in that case and therefore, this judgment is also not rendering any help to the assessee. 5.6 The next judgment cited by Learned A.R. of the assessee is the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision. 5.10 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Bombay High Court rendered in the case of Prashant S. Joshi & Dattaram Shridhar Bhosale (supra). In this case, it was held by Hon'ble Bombay High Court that the reasons recorded by Assessing Officer for reopening could not be supplemented by affidavit. It is noted that payment made to a partner in realization of his share in the net value of the assets upon his retirement from a firm, does not fall under clause (v) of section 28 and hence, there was absolutely no basis for the Assessing Officer to form a belief that any income chargeable to tax had escaped assessment within the meaning of the substantive provisions of section 147 of the Act. In the present case, the facts are different. In the present case, the reasons are recorded by the Assessing Officer on the basis of subsequent scrutiny assessment for assessment year 2004-05 and therefore, this judgment is not applicable. 5.11 The last judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Supreme Court rendered in the case of Kelvinator of India (supra). In this case, it was held by Hon'ble Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur has erred in law and on facts in directing to deduct total interest of Rs. 15,92,727/- paid to bank from Jajmau Unit in place of Rs. 7,66,170/- from Jajmau Unit and Rs. 8,26,557/ in Banthar Unit as reallocated by the Assessing Officer without appreciating the facts brought on record by the Assessing Officer during the course of assessment proceedings. 2. The Ld. Commissioner of Income Tax (Appeals)-I Kanpur has erred in law and on facts in directing the Assessing Officer to allow remuneration of Rs. 4,80,000/- from Jajmau Unit in place of Rs. 1,87,073/- and Rs. 2,40,000/- from Banthar Unit in place of Rs. 5,32,927/- as reallocated by the Assessing Officer without appreciating the facts brought on record by the Assessing Officer during the assessment proceedings. 3. That the order of the Ld. CIT (A)-I, Kanpur dated 14.02.2011 needs to be quashed and the order passed by the Assessing Officer dated 20.12.2007 be restored. 4. That the appellant craves leave to modify any of the grounds of appeal mentioned above and/or to add any fresh grounds as and when it is required to do so." 10. Learned D.R. of the Revenue supported the assessment order whereas it is submitted by Learned A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia also. 6. Because the CIT(A) has failed to appreciate the facts and circumstances of the case and has arbitrarily held that the duty drawback is an incentive and not income derived from the activity of industrial undertaking. 7. Because the CIT(A) has failed to appreciate that the disallowance of Rs. 8,76,376/- being interest on unsecured loans and Rs. 26,49,521/- being bank interest aggregating to Rs. 35,25,897/- and reallocating the same, (which reallocation is contrary to the provisions of law) in the ratio of value of fixed assets, between the two units, thereby has effected the deduction claimed u/s 80-IB of the Act. 8. Because the CIT(A) has failed to appreciate that the Assessing Officer was not justified in reallocating the sum of Rs. 3,40,000/- and Rs. 2,40,000/- claimed as partners remuneration in Jajmau unit and Banthar unit respectively, and-reallocating it in both units in the ratio of each unit reducing the claim of exempt income u/s 80-IB of Banthar unit." 14. It was fairly conceded by Learned A.R. of the assessee that this issue is covered against the assessee by the same judgment of Hon'ble Supreme Court in the case of Liberty India (supra). Respectfully ..... X X X X Extracts X X X X X X X X Extracts X X X X
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