TMI Blog2015 (12) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... rections of superiors is bad in law. There also the Assessment Officer had opposed the reopening. - Decided in favour of assessee. - Income Tax Appeal No. 112 of 2013 - - - Dated:- 8-12-2015 - B. P. Dharmadhikari And V. M. Deshpande, JJ. For the Appellant : Shri Anand Parchure, Advocate For the Respondent : Shri K. P. Dewani, Advocate JUDGMENT ( Per B. P. Dharmadhikari, J.) The department has attempted to raise the following questions as the substantial questions of law in this appeal : 1] Whether on the facts and circumstances of the case and in law, the Hon ble ITAT has erred in holding that the assessee was entitled to the deduction u/s 80P(e) of the Income Tax Act, 1961 in respect of the alleged rental inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax (Appeals)I, Nagpur [CIT (A)]. The CIT (A) in turn had followed the view of the Nagpur Bench of the Income Tax Appellate Tribunal, Nagpur. 3. A notice under Section 148 of the said Act was issued on 19-03-2008. The assessee on 29-03-2008 adopted its return filed on 31-10-2003. The assessee opposed the reopening and also pointed out that there was no error. The Income Tax Officer passed the assessment order on 29-12-2008 and after recording the finding that the assessee did not receive any commission income from the Cotton Federation in respect of the ginning and pressing services under any agreement for the assessment year 2003-2004, the said deduction on 50% of ginning and pressing charges under Section 80P(2)(e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been followed, the assessment could not have been reopened under Section 148 of the said Act. 6. The Division Bench of this Court in judgment reported at [1995] 78 Taxman 341 (Bombay) noted that there was fertilizer agreement and the paddy agreement with the assessee namely Bhandara Zilla Sahakari Kharedi Vikri Sangh Ltd. As per the fertilizer agreement which related to wholesale distribution, the assessee was to hold stocks, store the goods in godowns, preserve them, maintain accounts and sell the goods as per directions of the Government. It was to get commission at varying rates ranging between ₹ 35 to ₹ 50 per ton of goods actually sold. The Division Bench after interpreting this agreement found that the agreement befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w reached is on account of a specific finding about the ownership of stocks. In case of Surat Vankar Sahakari Sangh Ltd vs Commissioner of Incometax reported at [1971] 79 ITR 722 (Gujarat), the Gujarat High Court has held that the deduction under Section 14(3)(iv) of the Indian Incometax Act, 1922 corresponding to Section 80P of the present Act was not available on income derived by the assessee from processing or facilitating marketing of goods. The assessee there was a cooperative society. Its activities were processing of gray cloth on labour basis, purchasing of gray cloth from the local market and after processing, selling it to its members as well as outsiders. It earned income during the assessment year from processing gray cloth on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is fact from the assessment year 19901991. As such without finding on record any material to reach a contrary view and only on the basis of data always and already on record, the assessment order has been passed and a contrary view has been reached. The fact that 50% of ginning and pressing charges received by the assessee has been allowed to be appropriated as income derived by it from letting of godowns or warehouses, is not in dispute. We find that the substantial question of law as sought to be urged vide question no.1 does not arise for consideration. The judgments relied upon by learned Advocate Shri Parchure for the appellant, mentioned supra, take a contrary view because of the facts available on record. The Revenue has not come up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eached by the Assessment Officer and the appellant has also not come up before us with a case that the deduction is being claimed without letting out godown or warehouse. Thus, only on account of audit objection a well settled practice is sought to be disturbed. The Division Bench of this Court in (2010) 230 CTR (Bom) 157 (Purity Techtextile (P) Ltd vs Assistant Commissioner of Income Tax and anr.) has found that such reopening where the Assessment Officer relied exclusively on audit objection in absence of tangible material cannot be accepted. The jurisdictional condition under Section 147 of the said Act is the formation of belief by the Assessment Officer that income chargeable to tax has escaped assessment. In the present matter, the As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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