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2015 (6) TMI 479 - ITAT KOLKATA

2015 (6) TMI 479 - ITAT KOLKATA - TMI - Reopening of assessment - lease equalisation charges, provision for nonperforming assets and provision for diminution in the value of investments - CIT(A) quashed reopening order - Held that: - On the item of lease equalisation charges the Tribunal has decided the matter in favour of the assessee in assessment year 1997-98 in assessee’s own case.

Provision for nonperforming assets and provision for diminution in the value of investments - Held .....

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d on retrospective amendment is bad in law.

In the present case the notice u/s. 148 of the Act was issued prior to the amendment and once this is the position, the issue is squarely covered in favour of assessee. The reassessment u/s. 147 of the Act has rightly been quashed by CIT(A) and we confirm the same. - Decided against revenue. - ITA No. 395/Kol/2012 - Dated:- 13-5-2015 - Mahavir Singh, JM And B P Jain, AM,JJ. For the Appellant : Shri Nilay Baron Som, JCIT For the Respondent : .....

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quashing the reassessment proceedings. For this, Revenue has raised following ground No.1:- "1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the reassessment proceedings are not in accordance with the provision of law whereas it was clearly as per law and the AO has followed and observed all the directions given by appellate authorities." 3. Briefly stated facts are that assessee is a domestic company engaged in the business of provid .....

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llowed in favour of assessee. Against the order of appellate state in first round, Department preferred appeal before Tribunal and Tribunal dismissed the appeal of Revenue but allowed the Cross Objection filed by assessee with a direction to provide reasons and pass a speaking order on the objections in respect of issuance of notice u/s 148 r.w.s. 147 of the Act in view of the decision of Hon'ble Supreme Court in the case of G.K.N. Driveshafts (India) Ltd. v. ITO (2003) 259 ITR 19, 20 (SC). .....

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mendment made by Finance (No.2) Act in section 115JA of the Act in respect of provision for non performing assets (NPA) and provision for diminution in the value of investment. However, the AO has not accepted the contention of the assessee and assessee taken the matter in appeal before CIT(A) who quashed the reassessment proceedings and the relevant pare of the findings of CIT(A) reads as under:- "Now, the first issue to be decided in this appeal is the legality of issue of notice under se .....

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ent proceedings could not be said to be initiated on any other issue than those covered by the sec. 154 proceedings, and those issued stood examined by the appellate authorities as well. Secondly, it is apparently clear from the facts of the case as brought out by the Assessing Officer that though the assessment was reopened before the amendment in sec. 115JA of the Act with retrospective effect from 1.4.2001. There, the facts of the case are squarely covered by the decision of IOT Infrastructur .....

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CIT v. Kelvinator of India Ltd. (12010) 228 CTR (SC) 485; (210) 320 ITR 561 (SC), the ratio laid down by the Hon'ble Supreme Court is that "reopening of the assessment is not founded on tangible material and that the AO has acted outside the fold of his jurisdiction." In CIT vs. Sun Engineering Works (P) Ltd., TC 51R 314, the Hon'ble Supreme Court has held that where an appeal has been filed against intimation, matter concluded therein cannot be re-examined in re-assessment pro .....

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i.e. lease equalisation charges, provision for nonperforming assets and provision for diminution in the value of investments. The assessee contended that on the item of lease equalisation charges the Tribunal has decided the matter in favour of the assessee in assessment year 1997-98 in ITA No. 1291/K/2001 vide dated 16.05.2008 in assessee s own case. Secondly, the reopening is on the basis of retrospective amendment made by Finance No. 2 Act, 2009 in section 115JA of the Act in respect to propo .....

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In the present case, it would also be necessary to note that the reasons of the Assessing Officer were recorded before the provisions of Section 115JB were amended by Finance Act No.2 of 2009 though with effect from 2001. As a result of the amendment, clause (i) has been inserted in explanation (1) to the Section which defines the meaning of the expression "book profits". By the amendment, the amount or amounts set aside as provision for diminution in the value of the assets is to be a .....

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