TMI Blog2011 (6) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... equently, notice under section 148 was issued on the ground that during the year Government of Assam had agreed to pay an amount of ₹ 6,00,00,000/- and that amount was not reflected in the income of the assessee. Pursuant to said notice issued under section 148 of the Act, Assessing Officer completed assessment under section 143(3)/148 of the Act vide order dated 05.12.2008 assessing the income of the assessee at ₹ 4,83,53,525/-, copy of the order placed at pages 19 to 21 of the paper book. Subsequently, ld. CIT issued a notice under section 263 of the Act dated 08.11.2010, copy placed at pages 22- 23 of the paper book stating that on scrutiny of assessment records, it is found that the order passed under section 147/ 143(3) of the Act dated 05.12.2008 is erroneous and prejudicial to the interest of revenue and stated the following reasons :- Loss on sale of shares of ₹ 1,02,613/- is a capital loss since the shares were held as investment vide details on record, but was allowed as revenue loss in the assessment. As per the order of Hon ble High Court, 12% p.a. interest is payable to the assessee by the State Govt. from 30.11.1996 on the compensation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also contended that the assesseecompany was actually in business of generation of hydropower much earlier but simply it did not generate revenue, it could not be said that the business of the assessee-company had not commenced. He further submitted that in the re-assessment proceedings, Assessing Officer added back the amount of ₹ 6,00,00,000/- to the total income of the assessee, which was contested by the assessee before ld. CIT(A.) and ld. CIT(A.) by his order dated 29.10.2009 directed to consider the amount of ₹ 5,16,29,775/- as long-term capital gains. It was also stated in the said reply that the said issue and the order of the Hon ble Guwahati High Court relating to interim payment of ₹ 6,00,00,000/- as well as interest payment on the compensation amount was dealt at length and, therefore, it should be considered that the ld. CIT(A.) in the appeal filed considered the entire order of the Hon ble Guwahati High Court. Hence, jurisdiction of ld. CIT under section 263 for charging of interest to be taxed is not valid. 3. Ld. CIT after considering submissions of the assessee held that the contention of the assessee had no merit because once the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Guwahati High Court and to tax the said amount, Assessing Officer initiated re-assessment proceedings under section 147 of the Act and re-assessment order under section 148/ 143(3) dated 05.12.2008 was passed. He submitted that it could not be said that the entire original assessment order dated 20.03.2006 was re-visited merely because the re-assessment order dated 05.12.2008 was passed and hence, only the points, which were considered in the re-assessment order dated 05.12.2008 to that extent the original assessment order dated 20.03.2006 had merged but not the entire original assessment order dated 20.03.2006. Ld. AR submitted that none of the issues, which are mentioned in the notice issued under section 263 of the Act, were subject matter of re-assessment order and hence the period of limitation in respect of issues mentioned in notice issued under section 263 is to be considered from the date; original assessment order was passed dated 20.03.2006. Ld. AR relied on the decision of the Hon ble Apex Court in the case of CIT vs.- Alagendran Finance Ltd. [293 ITR 1], wherein Their Lordships held that the doctrine of merger does not apply when the subject matter of re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the Hon ble Apex Court vide its order dated 21.04.2005, copy placed at pages 53-54 of the paper book, stayed the order of the Hon ble Guwahati High Court subject to deposit of another sum of ₹ 9,00,00,000/- and the liberty was given to withdraw the amount on furnishing security to the satisfaction of Registrar General of the Hon ble High Court of Guwahati. In view of the above facts, we find substance in the submission of ld. AR that the said order of the Hon ble Guwahati High Court has not become final and accordingly the order directing to pay interest @ 12% per annum from 30.11.1996 till the payment was made had not become final. We observe that ld. CIT issued notice under section 263 of the Act dated 08.09.2010, copy placed at pages 22-23 of the paper book, stating that the re-assessment order dated 05.12.2008 is erroneous and prejudicial to the interest of revenue for the following reasons :- Loss on sale of shares of ₹ 1,02,613/- is a capital loss since the shares were held as investment vide details on record, but was allowed as revenue loss in the assessment. As per the order of Hon ble High Court, 12% p.a. interest is payable to the assessee by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Equalization Fund . The Appellate Tribunal held that the revision proceedings were barred by limitation as they were initiated more than four years after the original assessments; and the High Court dismissed the appeal therefrom. In the light of the above fact, Hon ble Apex Court held that the Commissioner had sought to revise only that part of the order of assessment which related to Lease Equalization Fund; but the proceedings for reassessment had nothing to do with that item of income. The doctrine of merger did not apply in a case of this nature : the period of limitation commenced from the dates of the original assessments and not from the reassessments since the latter had not had anything to do with the Lease Equalization Fund. This was not a case where the subject matter of reassessment and the subject-matter of the assessment were the same. There may not be any doubt or dispute that once an order of assessment is reopened, the previous under-assessment will be held to be set aside and the whole proceedings would start afresh, but that would not mean that even when the subject-matter of reassessment is distinct and different, the entire proceeding would be deem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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