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2016 (8) TMI 517 - GUJARAT HIGH COURT

2016 (8) TMI 517 - GUJARAT HIGH COURT - TMI - Reopening of assessment - Shri Nikunj Shah and Shri Jitendra Shah had issued bogus bills to various parties including the assessee and escaped income was stated to be only ₹ 1 lakh - deduction u/s 80HH of the Act on income not derived from industrial undertaking - Held that:- Considering the assessee’s revised return which was taken into account while completing the regular assessment as well as the reassessment, it is borne out that the assess .....

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t. Even otherwise, the fact that no appeal has been preferred by the assessee against the order of CIT(A) nor any cross objection has been filed in one of the appeals will be covered by the decision of this Court in the case of Dahod Sahakari Kharid Vechan Sangh Ltd. (2005 (7) TMI 45 - GUJARAT High Court ). In that view of the matter, we are of the view that the Tribunal is justified in holding that the Assessing Officer had no jurisdiction to initiate proceedings against the CIT(A)’s order upho .....

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n view of the fact that the substantial question has already been decided in favour of the assessee. - TAX APPEAL NO. 976 of 2007 With TAX APPEAL NO. 940 of 2007 With TAX APPEAL NO. 1870 of 2008 With TAX APPEAL NO. 1693 of 2009 TO TAX APPEAL NO. 1694 of 2009 - Dated:- 4-8-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR NITIN K MEHTA, ADVOCATE FOR THE OPPONENT : MR SN SOPARKAR, SENIOR ADVOCATE with MRS SWATI SOPARKAR, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JH .....

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No. Assessment Year 976 of 2007 05/01/07 3681/Ahd/2003 1997-98 940 of 2007 05/01/07 3680/Ahd/2003 1996-97 1870 of 2008 26/06/08 3517/Ahd/2003 1996-97 1693 of 2009 26/06/08 1357/Ahd/2006 1996-97 1694 of 2009 26/06/08 1519/Ahd/2006 1996-97 3. The following questions of law were raised for consideration by this Court: TAX APPEAL NO. 976 OF 2007 (A)Whether the Appellate Tribunal was justified in holding that the Assessing Officer had no jurisdiction to intimate proceedings u/s.147 of the Act, when .....

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urisdiction to initiate proceedings u/s.147 of the Act, when no appeal was preferred by the assessee against the CIT(A)'s order upholding the jurisdiction of the Assessing Officer to initiate reopening proceedings? (B)Whether the Appellate Tribunal was right in law and on facts in confirming the order passed by the CIT(A) directing the Assessing Officer to allow deduction u/s.80HH on income not derived from industrial undertaking? TAX APPEAL NO. 1870 OF 2008 Whether the Appellate Tribunal is .....

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rder passed by the CIT(A) in cancelling the penalty levied u/s 271(1)(c) of the I.T. Act? 4. Tax Appeal No. 976 of 2007 is being taken as lead matter in these set of appeals and therefore we advert to the facts of the said case. The original assessment was completed in this case u/s 143(3) of the Act determining the total income at ₹ 21,58,02,400/- as against the return income of ₹ 2,41,09,803/-. The MAT income declared by the assessee was ₹ 10,21,36,660/-. Thereafter, the asse .....

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ed return filed on 26.12.1997. On appeal, the CIT(A) set aside the reassessment order. On appeal by the revenue before the Tribunal, the Tribunal rejected the appeal and confirmed the order passed by CIT(A). 4.1 The main grounds of appeal in these appeals are with regard to the jurisdiction of the Assessing Officer to initiate reopening proceedings u/s 147 of the Income Tax Act, 1961 (for short the Act ) and allowing deduction u/s 80HH of the Act on income not derived from industrial undertaking .....

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ion. He submitted that the Tribunal, however, concluded that since no addition has been made in the income as a result of reassessment, the reopening is illegal. He submitted that the Tribunal has grossly erred in concluding that initiation of proceedings was invalid merely because no addition was finally made in the income on the reasons on which the assessment was reopened. 5.1 Drawing attention to the provisions of Section 147 of the Act, Mr. Mehta submitted that for initiation of proceedings .....

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tion u/s 80HH of the Act. He submitted that the Tribunal ought to have seen that the Assessing Officer had proceeded on the footing that the revenue had not accepted the decision of the CIT(A) for earlier years. 6. Mr. S.N. Soparkar, learned Senior counsel appearing with Mr. B.S. Soparkar, learned advocate for the assessee submitted that so far as Section 80HH is concerned, the deduction is rightly allowed after bifurcating its activity into two components; namely trading activities and manufact .....

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72 (Gujarat) and submitted that the assessee s claim of deduction u/s 80HH of the Act having been allowed by the CIT(A) as per order dated 13.12.2001 and the same having become final because of Revenue s failure to file the appeal against that order the Assessing Officer had no jurisdiction to deal with the issue, once again during proceedings u/s 147 of the Act. 7. We have gone through the order passed by the Tribunal and considered the arguments advanced by both the sides. The Tribunal in para .....

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initiated only for the sake of reopening of the completed assessment, more so because the assessee had already disclosed an income of ₹ 20 lacs from such transactions in the revised return before completion of regular assessment which stood accepted (while completing the re-assessment). In view of the facts and circumstances of the case, we are of the opinion that though there was no escapement of any income but, even if it is assumed for the sake of consideration that there was any differ .....

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apparent that the assessee's contention that it had no malafide intention or mens rea has not been found to be untrue by any of the authorities. The finding by the Tribunal in this context that the assessee had made separate claim in the profit and loss account for deduction of gratuity on the basis of actual payment to non-suit the assessee as regards the explanation offered is based on a misconception of facts and law. It was never the assessee's case that, out of the amount received .....

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The entire premise, therefore, is incorrect. 25. Once there is absence of mens rea, mere omission from the return of income of an item of receipt neither amounts to concealment, nor deliberate furnishing of inaccurate particulars of income, as laid down by the Apex Court, unless and until there is some evidence or some circumstances to show that the omission was attributable to an intention or desire on part of the assessee to conceal the income so as to avoid imposition of tax thereon. In the p .....

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n record to show that any particular individual has any personal interest in committing the act of omission of showing the amount received from Insurance Company as income of the assessee, a cooperative society. In fact, the entries in the books of account reflect that the assessee had credited the said sum to the fund account directly and the said entry appeared in the balance sheet without going through the profit and loss account. 7.2 Even in the case of Mohmed Juned Dadani(supra), this Court .....

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nd Shri Jitendra Shah had issued bogus bills to various parties including the assessee and escaped income was stated to be only ₹ 1 lakh. Considering the assessee s revised return which was taken into account while completing the regular assessment as well as the reassessment, it is borne out that the assessee itself had disclosed income of ₹ 20 lakhs from the transactions carried on with said Shri Nikunj Shah and Shri Jitendra Shah in revised return which stood taxed and the Assessi .....

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