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TMI Blog2017 (11) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... T Vs Sterling Foods 237ITR 579 (SC), Cambay Electric Supply Industrial Co. Ltd. Vs CIT 113 ITR 84 (SC), CIT Vs Pandian Chemicals Ltd. 233 ITR 497 (SC) and by Madras High Court in the cases of CIT Vs Sundaram Industries Ltd. 253 ITR396 (Mad.) and in the case of CIT vs Menon Impex (P) Ltd. (2003) 259 ITR 403 (Mad.) and by Kerala High Court in the case of CIT Vs Cochin Refineries Ltd. (1982) 135 ITR 278 (Ker) that the used of the term "derived from" in the relevant provision of the Act indicates the restricted meaning to cover only the profits and gains directly accruing from the conduct of business undertaking. 5. The interest income of Rs. 1,73,09,543/- is in the nature of "income from other sources" and it has not been derived from the industrial undertaking. The assessee has not disclosed the true particulars regarding this interest income and has claimed it as business income derived from industrial undertaking and consequently has claimed excess deduction u/s 80IB on it. 6. As per the provision of section 80IB where any deduction under chapter VI-A is to be allowed in respect of any income of the nature specified in that section which is included in the gross total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific. Such expenses are advertisements and sales promotion Rs. 29,45,33,370/-. These expenses have to apportion according to sales which has not been done resulting in excess claim of deduction in certain units and increased loss in certain units. The total sales of all units have been declared at Rs. 246,11,90,504/- (c) Besides, there were other items which had been wrongly claimed as expenses and disallowance under Section 14A was not worked out." 3. In W.P.(C) 2795/2008 (for AY 2005-06) the allegations and grounds of reassessment notice were identical. The AO felt that mixing up of trading sales and absence of unit specific profit and loss accounts led to excess deduction under Section 80IB to the extent of Rs. 1,73,77,558/-. In this petition, it is urged that the notice under Section 143 (2) was issued on 28.07.2006, but was not pursued. The assessment, therefore, was time-barred. Consequently reassessment is impermissible. Learned counsel relied on Principal Commissioner v. Silver Line (2016) 383 ITR 455 (Delhi)(HC) in this regard. 4. In the three writ petitions, the assessee argues that without any new or tangible materials, the AO could not have issued the impugned noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant queries in the original proceeding. Learned senior counsel relied upon the decision of Supreme Court in Commissioner of Income Tax v Kelvinator (India) Ltd (2010) 320 ITR 561, to say that in the absence of fresh "tangible" material the revenue is precluded from a second look at the assessment order as it would amount to an opinion. It is also argued that for the year 2005-06 the decision in Principal Commissioner v. Silver Line (2016) 383 ITR 455 (Delhi)(HC) is squarely applicable, because notice under Section 143(2) was not issued 8. The revenue contends and its counsel, Mr. Ashok. K. Manchanda argues that the reassessment notices in the three petitions does not suffer from any infirmity. The revenue realized that the excess deduction claimed by the assessee led to substantial revenue loss; before the matter could get barred, notices under Section 147/148 were issued. Reliance was placed on Phool Chand Bajrang Lal & Anr v Income Tax Officer & Anr [1993] 203 ITR 456 (SC), where the Supreme Court held as follows: "27. Since the belief is that of the Income- tax Officer, the sufficiency of reasons for forming the belief, is not for the Court of judge but it is open to an ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary that the same may come from a third person or source, i.e., from source other than the assessment records. However, in such cases, the onus will be on the Revenue to show that the assessee had stated incorrect and wrong material facts resulting in the Assessing Officer proceeding on the basis of facts, which are incorrect and wrong." Analysis and Findings 10. Section 147, to the extent it is relevant, is reproduced below: "147. - Income Escaping Assessment - If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 148 or this section has been made for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll these four cases, to issue the impugned reassessment notices? None absolutely. This is not a case of the kind visualized, in Phoolchand (supra), where something relating to a past year comes to light in the course of assessment in a later assessment year; nor is the revenue arguing that some new and significant information about concealment of income brought to light. The revenue is indulging in fishing, by way of scrutinizing again, something that had been specifically gone into, i.e the character of income and the extent of deduction claimed. Now, Usha International (supra) referred to by the revenue itself points out that if some aspect, vital or important, is overlooked during assessment, per se the remedy are not reassessment, but rather, the corrective jurisdiction under Section 263. That such jurisdiction cannot be exercised for some reasons, would not entitle the revenue to resort to reassessment, which in this case, is nothing but impermissible review. Considering that the reassessment is premised on reasons which were explicitly gone into (evident from queries to the assessee during the original assessment) for previous years, in the three writ petitions, the notices a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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