9911796707
TMI Blog2016 (6) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... come of Rs. 1,36,10,940/-. Subsequently, case was selected for scrutiny and in the scrutiny assessment, following the stand taken by the Assessing Officer (AO) in AY. 2005-06, the total income was determined at Rs. 74,90,853/-. However, the successor AO on noticing that the total income was determined lesser than the returned income, initiated proceedings u/s. 147 of the Income Tax Act [Act]. Assessee filed its return of income admitting the taxable income as determined by the order u/s. 143(3). However, AO without any discussion on the issue started the computation from the returned income and further disallowed the interest payments disallowed u/s. 40(a)(ia) at Rs. 16,45,102/- and depreciation at Rs. 39,35,902/, originally disallowed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion that the order of the CIT(A) as such cannot be fully confirmed. To the extent of initiation of proceedings u/s. 147 is concerned, he has followed the ITAT's order given in AY. 2006-07 on similar facts. To that extent, we confirme the order of the CIT(A) to hold that the proceedings u/s. 147 are bad in law. For the sake of record, the relevant portion in the order of ITAT for AY. 2006-07 is reproduced as under: "5. In ground No.1 to 6, the appellant questioned the validity of reopening the case on the ground that by recomputing the income, i.e., estimating finance charge income at (29,87,268/- and reduction of lease rentals admitted at fl,46,88,356/- from the total income, has resulted in under assessment of income. This method was ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a particular method of recognition of income adopted by the Assessing Officer) in original assessment proceeding cannot be permitted to be reagitated on assessment being reopened for bringing to tax certain income which had escaped assessment. It was further held that a matter not agitated in concluded original assessment proceedings also cannot be permitted to be agitated in reassessment proceedings unless relatable to item sought to be taxed as 'escaped income'. In the case on hand, the income adopted by the Assessing Officer by following a particular method in the Assessment year 2005-06 is coming below the income admitted by the appellant for the subject Assessment year 2006-07 following the same method (without additions). Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of reassessment inconsistent with the original order of assessment. 5.4 All the actions of the Assessing Officer appear to have emanated from the fact that for the Assessment year 2005-06 the Assessing Officer treated the business transactions of the appellant as 'finance transactions' against the claim of 'lease transactions' and this treatment had the effect of disallowing deprecation claim of the appellant. Following the same method for the subject Assessment year also, initially order u/s 143(3) rws 144A was passed. However, the Assessing Officer thanking that this method has the effect of bring down the income below the admitted income for the subject Assessment year, reopened the case and reversed the treatment give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lease transactions and re-working the lease/ finance incomes has become final. Consequently, effect in the later year of 2006-07 was also upheld. Assessee in this year has not challenged the AO's order u/s. 143 as it is in tune with the stand taken by AO in AY. 2005-06 and no prejudice was caused to assessee. Even otherwise, AO is not entitled to review his own order to come to a different conclusion on the same set of facts. In view of this, the proceedings initiated u/s. 147 are bad in law. Moreover, as rightly pointed out by the ITAT in earlier year, those issues were also confirmed by CIT(A) and ITAT in earlier years. Therefore, AO cannot differ from those findings. In view of this, to the extent of reopening of the assessment, we ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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