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2015 (12) TMI 288 - ITAT KOLKATA

2015 (12) TMI 288 - ITAT KOLKATA - TMI - Reopening of assessment - whether advance was not a trading liability - cessation of liability - Held that:- Assessing officer did not invoke the provision of section 41(1) in the original assessment proceedings after being fully satisfied with the reply filed by the asseessee. Therefore, on the basis of same facts, without having any fresh tangible material, solely on the basis of audit objection, the invocation of provision of section 147 was not justif .....

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nable. - Decided in favour of assessee. - I.T.A. No. 814/KOL/ 2012 - Dated:- 14-8-2015 - Shri S.V. Mehrotra, Accountant Member and Shri Mahavir Singh, Judicial Member For The Assessee : Shri S.M. Surana, Advocate and Shri Sunil Surana, FCA, For The Department : Shri S.M. Sarbarazut Tauheed, Sr. D.R. ORDER Per S.V. Mehrotra: This appeal has been filed by the assessee against the order of ld. Commissioner of Income Tax (Appeals) -XII, Kolkata dated 23.04.2012 for the assessment year 2005-06. 2. Br .....

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the amount as sundry creditors (Trading Liability). But the Assam Co. Ltd. had written off the recoverable amount in their balance sheet as per Companies Act. Hence, this case is applicable for the provision of section 41(1). Therefore, I have reason to believe that ₹ 50 lakhs is escaped assessment since ₹ 50 lakhs is chargeable to income tax as assessee s taxable income . 3. The assessment was completed under section 143(3)/ 147 after making the addition of ₹ 50,00,000/-. Ini .....

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I.T. Act, 1961 because of an audit objection. In order to strengthen submission, the AR has relied on various judgments given by different courts. I have gone through the AR s submission and different case laws given by him. No case law and no judgment given by the AR says that reopening of assessment u/s 147 of the I.T. Act, 1961 is invalid because of an audit objection. In fact, in practice the audit party raises objections in many cases. But objections raised by audit party as a matter of pr .....

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ge of opinion because of the audit objection only rather it is a case where the AO is fully satisfied that an income has escaped assessment, only after recording his satisfaction, notice u/s 148 has been issued in this case. Therefore, AR s contention that reopening of assessment u/s 147 of the I.T. Act, 1961 because of audit objection, is not valid. Hence, assessee s appeal in ground no 1 is dismissed . 4. Being aggrieved with the order of ld. CIT(Appeals), the assessee is in appeal before the .....

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g Officer at the original assessment and considered by him during the original assessment proceedings and as such it cannot be used for reopening the assessment u/s.147 of I.T. Act, 1961 even though it was pointed out by the audit party and consequently the reopening of assessment on this information is nothing but change of opinion and therefore the reopening of assessment ujs.147 is bad in law and void-ab-initio. 3. For that on the facts and in the circumstances of the case, the learned Commis .....

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ty and as such the same cannot be treated as income u/s. 41 (1) of I.T. Act, 1961. 5. For that the learned Commissioner of Income Tax (Appeal) should have considered the ground for charging of interest u/s.234B and 234D and should have held that interest u/s. 234B being wrongly charged should have been deleted . 5. Ld. counsel for the assessee vehemently submitted that the reopening has been made solely on the basis of change of opinion. In this regard, he referred to page 3 of paper book and po .....

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#8377; 50 lacs was given to M/s. Jalan Chemical Industries pvt. Ltd. vide cheque no. 009161 dated 09.01.95 during financial year 1994-95 towards an advance. The said advance amount of ₹ 50 lacs was not returned back to us by M/s. Jalan Chemical Industries Pvt. Ltd. till 31.03.2005. Since, the said amount was categorized as non performing assets, It was written off in our books of accounts during financial year 1996-97. Hence, there has been no outstanding in the name of M/s. Jalan Chemical .....

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rly stated regarding the facts relating to advance of ₹ 50,00,000/- from M/s. Assam Company Limited. The contention of the assessee was that no deduction was claimed from income in any of the earl ier years and no trading liability was there and the amount was only in the nature of advance. Ld. counsel relied on the order dated 19th June, 2014 of ITAT, Chandigarh Bench in the case of DCIT & Anr. -vs.- Vikas Sharma reported in (2014) 165 TTJ (Chd.)(UO) 1. 6. Ld. D.R. for the Revenue rel .....

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