TMI Blog2016 (9) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... al Yadav, Judicial Member Assessee by : Ms.Urvashi Shodhan Revenue by : Mrs.Smiti Samant, Sr.DR ORDER The assessee is in appeal before the Tribunal against the order of the Ld.CIT(A)-III, Baroda dated 29.8.2011 passed in the Asstt.Year 2004-05. 2. Though the assessee has taken four grounds of appeal, but its grievances revolve around two substantial issues, viz. the ld.CIT(A) has erred in confirming reopening of assessment and addition of ₹ 14,50,980/- which was added by the AO on account of low GP. 3. Brief facts of the case are that the assessee has filed its return of income on 1.11.2004 declaring total income at NIL. The case of the assessee was selected for scrutiny assessment and notice under section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43.00 Rs.19.61 +119% 3. Power/fuel consumption 29.79 Rs.25.13 +18% 4. Gross Profit 11.15 Rs.26.93 -58% As would be seen above, the consumption of raw material and power/fuel has increase inexplicably as compared to the immediate previous year by 119% and 18% respectively whereas there is sharp decline in sales Y O Y basis by 20% and the GP declared is down by 58% as compared to immediate previous year. It is evidentiary and abundantly clear from above data that the expenses are not commensurate with the sales shown, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice issued under section 142(1) of the Act is available. She drew my attention towards, particularly, serial no.11. This question reads as under: 11. Comparative statement showing gross profit working and net profit working for current year and preceding two years. In case of fall, explanation thereof. 6. According to the ld.counsel for the assessee, there is no fresh tangible material came to the possession of the AO exhibiting the fact that income has escaped the assessment. The ld.AO has reappraised himself with the material already made available by the assessee during the scrutiny assessment. Thus, according to the ld.counsel for the assessee, the assessment has been reopened on the basis of change of opinion, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the Hon ble Gujarat High Court in the case of Praful Chunilal Patel (supra). This decision of the Hon ble Delhi High Court has been upheld by the Hon ble Supreme Court, meaning thereby, impliedly, view taken by the Hon ble Gujarat High Court in the case of Praful Chunilal Patel (supra) was not approved by the Hon ble Supreme Court. Recently, Hon ble Delhi High Court has considered all these aspects in the case of Indu Lata Rangwala Vs. DCIT in Writ Petition No.1393 of 2002 decided on 18.5.2016, wherein the Hon ble Delhi High Court has considered the decision in the case of Praful Chnilal Patel as well as Kelvinator India Ltd. (supra). The finding of the Hon ble Delhi High Court is worth note. It reads as under: Summary of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee has understated the income and claimed excessive loss, deduction, allowance and relief in the return then that shall also be deemed to be a case where the income chargeable to tax has escaped assessment . 35.5 As explained by the Supreme Court in Rajesh Jhaveri Stock Brokers P. Ltd. (supra) and reiterated by it in Zuari Estate Development and Investment Co. Ltd. (supra) an intimation under Section 143 (1) (a) cannot be treated to be an order of assessment. There being no assessment under Section 143 (1) (a), the question of change of opinion does not arise. 35.6 Whereas in a case where the initial assessment order is under Section 143 (3), and it is sought to be reopened within four years from the expiry of the relevant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above, if I examine the facts of the present case, in order to reopen the assessment, where the scrutiny assessment has already undertaken, even before the end of the four years, the AO should possess some fresh tangible material, which came to the possession of the AO after the conclusion of the assessment. A bare perusal of questionnaire and the particular question raised at serial no.11, I am of the view that the AO has already gone through all the material in the scrutiny assessment and no fresh material came to his possession. Therefore, I allow the appeal of the assessee and quash reassessment order. 10. In result, the appeal of the assessee is allowed. Order pronounced in the Court on 2nd June, 2016 at Ahmedabad. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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