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2015 (8) TMI 414 - ITAT DELHI

2015 (8) TMI 414 - ITAT DELHI - TMI - Reopening of the assessment u/ s 147 - amount wrongly claimed by the assessee being the amount written off which pertains to the development of software and forfeiture of registration charges of industrial land - CIT(A) quashed reopening - Held that:- The present case is pertaining to AY 2003-04 wherein the AO issued notice u/s 148 of the Act on 4.9.2009 which is beyond four years as the AO could have started proceedings u/s 147 of the Act after the end of f .....

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taining to the issue which has been picked up by the AO for recording reasons for issuance of notice u/s 148 of the Act. In the present case, the AO has picked up the issue of written off amount of ₹ 23,43,179 pertaining to amount advanced to M/s Shonkh Technologies International Ltd. and the amount forfeited by Greater Noida Industrial Authority towards aborted project. As we have noted above, the assessee furnished entire details on this issue vide its submissions dated 26.2.2006 during .....

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correct in granting relief for the assessee by allowing legal contention and ground of the assessee against issuance of notice u/s 148 of the Act beyond the prescribed period of four years specifically when there was no failure on the part of assessee to disclose fully and truly material facts relevant to the issue of written off debts - Decided in favour of assessee. - I.T.A.No.1303/Del/2013 - Dated:- 7-8-2015 - SHRI N.K. SAINI AND SHRI CHANDRA MOHAN GARG, JJ. For The Appellant : Smt. Parwinder .....

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urt in the case of Bawa Abhai Singh vs. CIT9117 Taxman 12) and Rakesh Aggarwal vs ACIT(87 Taxman 306) has also held that under the amended provisions of section 147 the power to reopen is much wider and can be exercised even after the assessee has disclosed fully and truly all material facts? 2. We have heard arguments of both the sides and carefully perused the relevant material placed on record. Brief facts of the case are that the assessee a private limited company is engaged, inter alia, in .....

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ding the reasons as: "The assessment of the company M/s Dixon Utilities and Exports (P) Ltd. for the A. Y. 2003-04 on 06.03.2006 at ₹ 1,96,57,890/=. It has been noticed that the amount of ₹ 23.43 lakhs were wrongly claimed by the assessee being the amount written off which pertains to the development of software and forfeiture of registration charges of industrial land. The amounts which were claimed to be written off in P&L A/c were capital in nature and either the assessee .....

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same into the computation of income along with return filed by him and the assessee company fails to disclose fully and truly the above material facts necessary for the assessment. I have therefore, reason to believe that the income chargeable to tax has escaped assessment for the A. Y. 2003-04. Issued notice u/s 148. " 3. The assessee objected to the reopening of assessment but the AO dismissed the objection of the assessee and finalised the reassessment order u/s 143(3) /148 of the Act on .....

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of Dalmia Pvt. Ltd. Vs CIT Delhi dated 26.9.2011 passed in WP(Civil) No. 6205 of 2010 and submitted that the term failure on the part of the assessee is not restricted only to the income tax return and the columns of the income tax return or the tax audit report. Ld. DR further submitted that the said expression in first proviso to section 147 of the Act i.e. failure to fully and truly disclose material facts also relate to the state of assessment proceedings at the second stage. Ld. DR further .....

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at the first stage and also during the assessment proceedings at the second stage is on the assessee. Ld. DR also contended that in the present case, the assessee did not fully and truly disclose material facts about the amount of ₹ 23.43 lakh which was wrongly claimed by the assessee being the amount written off which pertains to the development of software and forfeiture of registration charges of industrial land. Ld. DR also pointed out that the AO for reasons recorded for reopening th .....

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ght and justified in issuing notice u/s 148 of the Act showing his intention of reopening the assessment u/s 147 of the Act. Ld. DR also contended that the CIT(A) was not correct in law and on facts in holding that the notice u/s 148 could have been issued upto 31.3.2008 only and the AO has issued notice on 4.9.2009 which is a juridical error. Ld. DR also pointed out that the CIT(A) was incorrect in holding that there was no failure on the part of assessee to fully and truly disclose the materia .....

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ing assessment proceedings available at pages 83 to 90 of the assessee s paper book wherein at page 87, there was a detail of debts written off during the financial year under consideration. On perusal of relevant part of submission of the assessee dated 23.2.2006 pertaining to bad debts, we observe that the assessee has submitted names and relevant amount of three parties and further explained that in the first two cases, company has issued legal notices and against the third party, the company .....

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42,748 being amount advanced to M/s Shonkh Technologies International Ltd. towards development of software and the sum of ₹ 3,00,431/- represented amounts forfeited by Greater Noida Industrial Authority towards an aborted project. In this situation, when the assessee in its written submissions and explanation submitted before the AO during original assessment proceedings dated 20.3.2006 at page 87 to 90 of assessee s paper book has given all details regarding impugned amounts written off p .....

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first proviso to section 147 of the Act, therefore, the impugned order of the CIT(A) is correct and justified and the same may kindly be upheld dismissing the appeal of the revenue. 6. On careful consideration of above submissions of both the sides, at the very outset, we respectfully reproduce the relevant operative part of the judgment of Hon ble Jurisdictional High Court of Delhi in the case of Dalmia Pvt. Ltd. vs CIT (supra) as relied by ld. DR wherein their lordships in para 21 of the judge .....

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es of the sundry creditors and since when the amount was outstanding. The petitioner was also asked to explain details of each creditor. There is nothing on record and it is not even the stand of the petitioner that those details in respect of all parties were furnished. If there is no disclosure and details were not furnished, there cannot be full and true disclosure. In W.P.(C) No. 9036/2007, Honda Siel Power Products Ltd. vs. The Deputy Commissioner of Income Tax and Anr., decision dated 14th .....

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cts during the course of the assessment proceedings. This can happen when the assessee does not disclose or furnish to the Assessing Officer complete and correct information and details it is required and under an obligation to disclose. Burden is on the assessee to make full and true disclosure." In such circumstances, it cannot be held that there was full and true disclosure by the petitioner-assessee. The second contention of the petitioner fails. 7. In view of above, if we analyse the f .....

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09 perhaps by invoking and applying first proviso to section 147 of the Ac. The provisions of section 147 along with first proviso are being reproduced below for the sake of clarity in our observations and conclusion:- 147. If the 89[Assessing] Officer 90[has reason to believe91] that any income chargeable to tax has escaped assessment91 for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess91 such income and also any other income chargeable to tax .....

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on shall be taken under this section after the expiry of four years from the end of the relevant assessment year92, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure92 on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts92 necessary for his assessment, for that assessment year 8. We further obs .....

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4 i.e. proceeding could have initiated by way of issuing of notice by 31.3.2008; in this case the AO had issued the notice dated 4.9.2009 which is not as per law. A number of citations have been referred to in support of the aforesaid contention e.g. CIT vs Tirath Ram Ahuja(HUF)306 ITR 173(Del) and Haryana Acrylic Mfg. Co. vs CIT 308 ITR 38(Del). 5.1 The issue involved and the submissions made by the appellant have been considered. In view of the factual position and failure on the part of the A .....

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ued notice u/s 148 of the Act after expiry of four years on 4.9.2009. As per first proviso to section 17 of the Act, the AO is not empowered to take any action u/s 147 of the Act after expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s 139 or in response to notice issued under sub-section (1) of section 142 or section 148 or .....

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. In the present case, the AO has picked up the issue of written off amount of ₹ 23,43,179 pertaining to amount advanced to M/s Shonkh Technologies International Ltd. and the amount forfeited by Greater Noida Industrial Authority towards aborted project. As we have noted above, the assessee furnished entire details on this issue vide its submissions dated 26.2.2006 during the original assessment proceedings which have been placed by the assessee in its paper book pages 83 to 90. In this si .....

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