TMI Blog2015 (9) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... I SANJAY GARG, JJ. For The Appellant : Ms. Vasanti Patel For The Revenue : ShriYogesh Kamat ORDER PER G.S. PANNU,AM: The captioned appeal by the assessee is directed against the order of the CIT(A)-29, Mumbai dated 10/12/2010 pertaining to the assessment year 2000-01, which in-turn has arisen from an order passed by the Assessing Officer dated 29/12/2008 under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 ( in short the Act ). 2. In this appeal assessee has raised following Grounds of appeal:- 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 ₹ 59,04,330/- written back from taxable bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the initiation of proceedings under sections 147/148, as also the additions made. The CIT(A) has allowed part relief to the assessee on the quantum of additions, but so far as the re-opening of assessment under sections 147/148 of the Act is concerned, the action of the Assessing Officer has been affirmed. 5. Before us, the Ld. Representative for the assessee has referred to a copy of the reasons recorded by CIT(A) dated 29/3/2007, which reads as under:- In this case, the original return was filed on 31.10.2000 showing returned income of ₹ 1,52,63,859/-. The return was processed u/s. 143(3) on the same income. The assessment was subsequently completed u/s. 143(3) of the I. T. Act, on 27.03.2003 assessing the income at ₹ 1,52,63,859/-. 2. On going through the above return and other details, it is seen that only profit from export of manufactured goods has been considered while the loss from export of trading goods has not been considered. If Loss on trading goods of ₹ 1,05,67,857/- is taken into account, the resultant profit from export would be negative and assessee would not be entitled to any deduction u/s.80HHC because profits from export incen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 1 lakh chargeable to tax has escaped assessment within the meaning of section 147 of the I. T. Act 5.1 The contention of the assessee is that, so far as the reason relating to the deduction under section 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 ₹ 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. Furthermore, the Assessing Officer noted that the profits from export incentives cannot be considered as profits derived from export. 5.2 In this context, we find that before the Lower authorities as well as before us the plea of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from M/s. Salpha Garments and disallowance of interest with respect to interest free advances made to the related persons, both are based on the stand of the Assessing Officer in the course of the proceedings for the subsequent assessment year of 2002-03. On these aspects, factually speaking, the Ld. Representative for the assessee pointed out that in the appeal proceedings for A.Y 2002-03, the Tribunal vide its order in ITA No.3189/Mum/2006 dated 21/1/2009 has deleted the additions. 7. In so far as, the disallowance of ₹ 89,084/- on account of the payment made to M/s. Sulpha Garment is concerned, the same has already been deleted by the CIT(A) and there is no grievance of the assessee. The only other issue surviving for consideration relates to the disallowance of ₹ 2,32,590/- on the ground that assessee has advanced interest-free funds to related concerns amounting to ₹ 23,25,899/- which tantamounts to diversion of interest bearing funds towards non-business purposes. 7.1 On this aspect, the plea of the Ld. Representative for the assessee was that the AO has not applied his mind appropriately in as much as the amount of Partners fund i.e. fixed capital c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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