TMI Blog2014 (8) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... n the initiation of the reassessment proceedings itself is found to be illegal and beyond the scope of the relevant provisions of the Act, Tribunal has rightly held that there is no illegality committed by the assessee in paying interest at the rate of 24% to the related parties – Decided against Revenue. - Tax Appeal No. 633 of 2014 - - - Dated:- 21-7-2014 - M. R. Shah And K. J. Thaker,JJ. For the Appellant : Mrs. Mauna M. Bhatt ORDER (Per : Honourable Mr. Justice M. R. Shah) 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned ITAT (hereinafter, referred to as the Tribunal ), Dated : 25.09.2013, in ITA No.2158/Ahd/2011 for A.Y. 2003-04, whereby the learned Tribunal has allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise of power under Section 147 read with Section 148 of the Act and the reassessment proceedings were initiated, on the following grounds; The case was taken up for re-assessment after duly recording the reasons for reopening. The reasons for reopening are reproduced hereunder: The total income of the assessee as determined vide order dtd.31-10-2007 u/s. 143(3) r.w.s. 147 of the I.T. Act at ₹ 4,35,24,535/-. Perusal of the record shows that the assessee has paid interest on loans taken from various parties. It is further seen that interest to related parties has been paid at the rate of 24% as against 15% paid to unrelated parties. It is therefore seen that excess interest has been paid to related parties which is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO, the assessee preferred further appeal before the learned ITAT and the learned ITAT by the impugned judgment and order allowed the said appeal preferred by the assessee, by holding that the AO was not justified in initiating reassessment proceedings under Section 148 of the Act inasmuch as there was true and correct disclosure by the assessee and consequently directed to quash and set aside the order passed by the AO. Having so held, the learned Tribunal also quashed and set aside the dis-allowance made by the AO of ₹ 43,05,343/-, on the ground that the same being the interest at the rate of 24% was excessive and unreasonable. 6. Feeling aggrieved and dissatisfied by the order of the learned Tribunal, the Revenue has prefer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the reassessment proceedings. 9. Ms. Bhatt, learned Advocate appearing on behalf of the Revenue, is not in a position to demonstrate how the aforesaid findings recorded by the Tribunal is arbitrary or perverse and that the Tribunal has committed any error or illegality in holding the reassessment proceedings for the A.Y. 2003-04, as illegal. We see no reason to interfere with the findings recorded by the Tribunal that the order for reassessment for the A.Y. 2003-04 is illegal and beyound the scope of Section 148 of the Act. 10. In view of the above findings, when the initiation of the reassessment proceedings itself is found to be illegal and beyound the scope of the relevant provisions of the Act, there is no question of further en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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