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TMI Blog2015 (2) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... addition made by AO on the ground that the provision for bad debts and the provision for doubtful debts are ascertained liability in the case of assessee. 2.1. The issue raised in the Cross Objection is as under :- "I.That on the facts and in the circumstances of the case, Ld.CIT(A) erred in confirming the action of the AO in initiating reassessment proceedings u/s 147/148 without appreciating the fact that the same has been done in utter disregard as the express provisions of the Act on fresh application of mind on the same set of facts, more so when there was no failure on the part of the appellant to disclose truly and fully all the facts necessary for completion of the original assessment u/s 143(3). 2. That on the facts and in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in regular assessment. That since the amount of provisions under the aforesaid items charged to accounts did not justify that the quantum of provisions had been quantified/ascertained, the allowance of such deduction was not regular under the provisions of Income Tax Act, 1961. In the instant case, allowance of deduction of unascertained liability of Rs. 21,50,152/- and Rs. 45,10,941/- respectively in computation of taxable income resulted in underassessment of income. The AO asked the assessee to explain the above to which it filed reply. But the AO did not find it tenable. He held that the assessee has not disclosed facts fully and truly and has concealed income to the tune of Rs. 66,61,093/-. The same is added back. 5. Against the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 440/- and has claimed exclusion of provision for doubtful debts no longer required and written back amounting to Rs. 45,10,941/- and Rs. 21,50,151/- respectively [Refer Pg.2 of PB] In the audited accounts, the same is shown under Schedule-17 'Manufacturing, Selling and other Expenses' and Schedule-14 'Other Income'. [Refer Pg 3-7 of PB]. During the course of assessment proceedings, the AO vide notice u/s 142(1) dtd. 17-10- 05, at Query NO.14 & 22 has specifically asked the assessee to submit the details of provisions for doubtful debts created and written back during the year [Refer Pg.12-18 at Pg.14-15 of PB]. In response to the same, the assessee vide letter dated 21-11-2005 [Refer Pg.19 to 31 of PB] and 22-02-2006 [Refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, he may, subject to the provisions of section 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r expenses' and Schedule- 14 'Other Income'. From the above it is apparent that assessee has fully and truly disclosed all the materials in this regard. So it cannot be said that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Hence manifestly this reopening is hit by the proviso to section 147 of the Act and in the light thereof reopening is not sustainable. 7.2. Furthermore we note that in the reassessment it is the case of the assessee that it is a mere change of opinion which is not permissible under law. In this regard it has been submitted that during the course of assessment proceedings u/s 143(3) the AO vide notice u/s 142(1) of the Act dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kol/2010, Order dtd.25- 04-2011] - CIT vs Usha International Ltd. (2012) 348 ITR 485 (Del(FB) - Asian Paints Ltd vs DCIT (2009) 308 ITR 195 (Bom)." 7.3. In the background of the aforesaid discussion we hold that reopening in this case is bad and invalid and as such it is not sustainable. Hence we set aside the order of ld. CIT(A) on this issue and hold that the re-assessment is invalid. 8. Since we have already held that re-assessment is invalid the Revenue's appeal pertaining to the allowance of claim on the merits of the case is now of academic interest hence we are not adjudicating the same as the same is infructuous. 9. In the result the Cross Objection of the assessee is allowed and the Revenue's appeal is held to be infruc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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