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TMI Blog2015 (9) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and in the circumstances of the case: 1. The learned Commissioner of Income Tax (Appeals) erred in upholding the reopening of the assessment u/s.147 and making of re-assessment u/s.147. The reassessment is without authority of law and is bad in law and needs to be cancelled. 2. The learned Commissioner of Income Tax (Appeals) erred in not considering the objections of the appellant against the action of reopening of the assessment. 3. The learned Commissioner of Income Tax (Appeals) erred in not directing the Assessing Officer not to reduce 90% of Sundry Credit balance of Rs. 59,04,330/- written back from taxable business income to arrive at Profits of Business while computing deduction u/s.80HHC. 4. a) The learned Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of deduction under section 80HHC of the Act amounting to Rs,1,52,82,867/- with respect to the profits from the business of exports. Subsequently, the Assessing Officer reopened the assessment by issuing notice under section 148 of the Act on 30/03/2007 after recording reasons, on the ground that certain income chargeable to tax had escaped assessment. In the ensuing assessment made under section 143(3) r.w.s 147 of the Act dated 29/12/2008 the Assessing Officer assessed the total income at Rs. 3,09,68,400/-, after making disallowances on account of denial of deduction under section 80HHC of the Act, interest disallowance under section 14A of the Act, and disallowances out of job work charges. 4. Before the CIT(A), the assessee challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I. T. Act was returned unserved with the remark 'Not found'. The assessee was accordingly informed that genuineness of the above purchases has not been verified and therefore, assessee was asked to furnish the PAN or furnish the confirmations of transactions. However, the assessee failed to furnish the PAN or confirmed copy of ledger a/c. Since, the assessee failed to discharge onus in respect of genuineness of the purchases from this party and also about the genuineness of the party, purchases from this party were held as not genuine and an addition was made. It is seen that during this assessment year also, purchases /job work above Rs. 1 lakh have been shown to be made from this party. Since genuineness of the party is not proved; th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80HHC of the Act is concerned, it is contended that the same is factually incorrect. In order to appreciate the aforesaid plea, a perusal of Para-2 of the reasons recorded reveals that the Assessing Officer has formed a belief that the assessee is not entitled to any deduction under section 80HHC of the Act. The aforesaid belief is founded on the basis that while computing the deduction under section 80HHC of the Act, at the time of original assessment only the profit from export of manufactured goods has been considered and if the loss from export of trading goods of Rs. 1,05,67,857/- was taken into account, there would be a negative profit, which would show that assessee was not entitled to the deduction under section 80HHC. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has set up a case that the reason recorded by the Assessing Officer for initiating proceedings u/s. 147/148 of the Act, qua the claim of deduction under section 80HHC of the Act is factually incorrect. 6. On this aspect, though the Ld. Departmental Representative reiterated the reasons recorded by the Assessing Officer, so however, there is no denial to the factual assertions made by the Ld. Representative for the assessee before us. In fact, similar objection was taken by the assessee even before the Assessing Officer at the time of raising objection to the reopening of assessment and such written submissions have been placed in the Paper Book at pages 45 to 49. We find that there is no rebuttal of the aforesaid position canvassed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely in as much as the amount of Partners fund i.e. fixed capital contribution plus the current account balance in the current year is Rs. 14,73,21,801/- which is substantially higher than the impugned amount of interest free advances to the related concerns. It was pointed out that the assessee firm does not pay interest to its Partners and, therefore, the said amount of interest free funds can be said to have been available with the assessee to cover the impugned interest free advances to sister concerns. The Ld. Representative for the assessee pointed out that similar notional disallowances were made by the AO in assessment year 1998-99 as well as in A.Y. 2002-03, which were deleted by the Tribunal vide ITA No.6213/Mum/2003 dated 10/10/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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