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2016 (5) TMI 95 - ITAT DELHI

2016 (5) TMI 95 - ITAT DELHI - [2016] 47 ITR (Trib) 198 - Reopening of assessment - reasons to believe - Held that:- From the particulars called for by the Assessing Officer at the time of original assessment proceedings, submissions made by the assessee before the Assessing Officer at the time of original assessment proceedings and the reasons recorded for initiation of reassessment proceedings, it is very much evident that the reassessment proceedings were initiated by the Assessing Officer on .....

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pinion, it is merely a fresh application of mind by the Assessing Officer to the same set of facts. Thus, it is our considered view that it is a case of mere change of opinion on the material which was already available on record at the time of completion of the original assessment. Therefore, the proceedings for reassessment under section 147 fail to stand the test. - Decided in favour of assessee - I. T. A. No. 1173/Del/2009 - Dated:- 11-2-2016 - J. Sudhakar Reddy (Accountant Member) And Sudha .....

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subsequently revised on November 24, 2003, to a net loss of ₹ 1,77,50,989. The assessment was completed under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") at a loss of ₹ 1,73,14,130. The case was reopened under section 148 of the Act. The reasons recorded for reopening were as under : "Grant/subsidy received after production but not included in income Scrutiny of the case revealed that a sum of ₹ 40,00,000 was shown under the .....

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income. In view of decision in the case of Sahney Steel and Press Works Ltd. v. CIT [1997] 228 ITR 253 (SC), it has been held that grants/subsidy paid to the assessee as assistance to carry out the business operation after the commencement of production is assessable as business income. Royalty expenditure irregularly debited in the profit and loss account Expenditure regarding royalty amounting to ₹ 4,50,42,246 had been debited in the profit and loss account during the year ended on March .....

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in the profit and loss account as miscellaneous expenditure instead of its allocation as capital expenditure. It resulted in short computation of income by ₹ 32,37,979. Liabilities not disallowed The assessee has deducted GPF subscription of ₹ 3,36,352 but the same has not been deposited in the Government account. This resulted in short computation of income by ₹ 3,36,352." 3. The assessee raised objections to the reopening proceedings which were not accepted by the Asses .....

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4,76,574 on account of prior-period expenditure. (v) ₹ 17,12,47,690 on account of depreciation on fixed assets remaining unverified. (vi) ₹ 40,00,000 on account of subsidy received from the Government of Uttaranchal. 4. The assessment was finalised at a total income of ₹ 18,73,10,667. 5. In the first appeal before the learned Commissioner of Income-tax (Appeals), the assessee challenged the initiation of reassessment proceedings as well as the quantum additions on the merits. .....

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lief of only ₹ 40,00,000 received as subsidy from the State Government which the learned Commissioner of Income-tax (Appeals) allowed on the ground that the same was capital in nature. 6. In the present appeal before us, the assessee has raised as many as five grounds of appeal on the legality of initiation of reassessment proceedings as well as on the merits. However, at the outset, the learned authorised representative submitted that the issue of assumption of jurisdiction under section .....

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iction under section 147 of the Act submitted that, in the present case, all the facts and information were available with the Assessing Officer at the time of making the initial assessment under section 143(3) of the Act. The action of the Assessing Officer in reopening the assessment was bad in law as the same was passed on a mere change of opinion/reappreciation of the facts without there being any change in the circumstances or additional facts or fresh information having come in the possess .....

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ther submitted that all the information used by her for recording of reasons for the purpose of issuance of notice under section 148 were available with her even at the time of the original assessment proceedings. He relied on a number of decisions including that of the hon'ble Delhi High Court in the case of CIT v. Orient Craft Ltd. [2013] 354 ITR 536 (Delhi) on the issue of the validity of notice under section 148 of the Act. 8. The learned Departmental representative, on the other hand, s .....

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sment proceedings, the Assessing Officer is not precluded to reopen the assessment. He relied on the orders of the Assessing Officer and the learned Commissioner of Income-tax (Appeals) and submitted that they should be upheld. 9. We have heard the rival contentions and have also perused the records, especially the reasons recorded for the issuance of notice under section 148 (reproduced elsewhere). From the particulars called for by the Assessing Officer at the time of original assessment proce .....

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, was very well aware about the primary facts. The Assessing Officer, while reopening the assessment under section 147, has made no reference to any new material which has come into her possession after the completion of the original assessment under section 143(3) of the Act. In our opinion, it is merely a fresh application of mind by the Assessing Officer to the same set of facts. Thus, it is our considered view that it is a case of mere change of opinion on the material which was already avai .....

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all material facts necessary for the purpose of assessment. Reference may be made at this juncture to the judgment of Full Bench of the hon'ble Delhi High Court in the case of CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi) [FB] (affirmed by the hon'ble apex court in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC)) wherein the hon'ble Delhi High Court has held : "It is not in dispute that the Assessing Officer does not have any jurisdiction to review its own or .....

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sessing Officer or the Tribunal has considered the matter in detail and the view taken is a possible view, the order cannot be changed by way of exercising the jurisdiction of rectification of mistake. It is a well-settled principle of law that what cannot be done directly cannot be done indirectly. If the Income-tax Officer does not possess the power of review, he cannot be permitted to achieve the said object by taking recourse to initiating a proceeding of reassessment or by way of rectificat .....

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