TMI Blog2017 (6) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... is appeal by the assessee is arising out of the order of CIT(A)-32, Mumbai, in appeal No. CIT(A)-32/IT-202/ITO-20(2)(2)/2015-16 dated 30-12-2016. The Assessment was framed by ITO Ward -20(2)(2), Mumbai for the A.Y. 2009-10 vide order dated 17-03-2015 u/s 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the re-assessment order passed under section 147 read with section 143(3) of the Act. For this assessee has raised following ground No.1: - 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming the assessment order passed under section 143(3) read with section 147 of the Income Tax Act, 1961 is itself bad-in-law. 3. Briefly stated facts are that the assessee is an individual and is engaged in the business of sales and purchases of scrap. The assessee for the filed his return of income on 26-09-2009 and original AY completed under section 143(3) on 23-12-2011. Subsequently, the assessment was reopened by recording the following reasons: - In this case scrutiny assessment u/s 143(3) for above assessment year was done on 23/1-2/2011 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer a very short period during which and due to time barring pressure could not properly applied the mind and verified the facts and details produced/ submitted. Therefore, your claim that AO has scrutinized and verified thoroughly in detail all the explanation, documents and by applying mind completed the assessment is not acceptable as if was not possible for the AO to devote his time under the pressure of heavy work load of other time barring assessment and for the reasons' given above. Aggrieved, against the reopening assessee preferred the appeal before CIT(A), who confirmed the action of the AO vide Para 5.1 of his appellate order as under: - 5.1 Ground No. 1: This ground of appeal is regarding to order passed under section 143(3) read with section 147. This ground is against reopening of the assessment. The appellant is arguing on the sufficiency of reasons for the AO to form reason to believe that income has escaped assessment. It is not the case of the appellant that there is a change of opinion. From his submissions it is clear that the appellant seems to challenge the sufficiency of reasons. The assessment was reopened after recording sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relied on the decision of the Hon ble Bombay High Court in the case of Purity Techtextile Private Limited vs. ACIT (2010) 325 ITR 459 (Bom), Delhi High Court in the case of Xerox Modicorp Ltd. vs DCIT (2013) 350 ITR 308 (Delhi) and Gujarat High Court in the case of Reckitt Benckiser Healthcare India (P.) Ltd. vs. DCIT (2017) 392 ITR 336 (Guj) and also Supreme Court in the case of CIT vs. Lucas T.V.S. Ltd. (2001) 249 ITR 306 (SC). 6. On the other hand, the learned Sr. DR relied on the decision of 247 ITR (13) SC and 102 ITR 287 SC. 7. I have heard the rival contentions and gone through the facts and circumstances of the case. I find that the original assessment was completed u/ s 143(3) of the Act vide order dated 23-12-2011. Subsequently, due to audit objection the assessment was reopened for the reason that the assessee s cash deposits of ₹ 18,97,450/- has not been added by the AO during the original assessment proceedings. From the very reason recorded by the AO for reopening of assessment, it is clear that the same is on the basis of audit objection and no independent opinion has been formed by the AO while recording reasons. The audit party has spelt out the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax from the royalty which would authorise the disallowance under section 40(a)(i) is a fact that is mentioned for the first time in the counter-affidavit and it does not find place in the reasons recorded. As noted earlier, it is impermissible to look into any record other than the reasons recorded to judge the validity of the reopening of the assessment. Further, the statement in the counter-affidavit that the facts relating to the past years disclosed that the petitioner was wholly dependent on the parent company for the technical inputs goes against the revenue, in the sense that it was always known to the revenue that the petitioner did not develop any technology of its own but was dependent on the technology from the parent company. Moreover, it is not for the petitioner to advise the assessing officer as to what inference he should draw as to nature of the expenditure - whether it is revenue or capital in nature. 19. Since the reasons recorded have been prompted by the revenue audit's opinion as admitted in the counter-affidavit, it is not necessary to examine the contention of the revenue based on the observations of the majority in paragraph 23 of the judgment i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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