TMI Blog2017 (11) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer it cannot be said that there has been any no new material that necessitate neither reopening nor any new fact should have been brought to the notice. The Assessing Officer has arrived at his satisfaction from the material available on record namely the export of gold to Dubai and the job work done by the assessee to two concerned persons present at Dubai. - Decided in favour of assessee. - I. T. A. Nos. 1252, 1253, 1254, 1255/Chd/2016 and C. O. Nos. 17, 18, 19, 20/Chd/2017 - - - Dated:- 28-8-2017 - Sanjay Garg (Judicial Member) And Dr. B. R. R. Kumar (Accountant Member) For the Department : Chandrakanta For the Assessee : Sudhir Sehgal OEDER 1. All these appeal have been filed by the Revenue against the common order of the learned Commissioner of Income-tax (Appeals)-3. Ludhiana dated September 22, 2016 and cross-objections in all the appeals filed by the assessee. 2. Since the grounds raised and issues involved in all the appeals are identical, the same were heard together and are being disposed of by this common order for the sake of convenience. We shall be taking I. T. A. No. 1252/Chd/2016 as the lead case for disposing of all the appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en completed under section 143(3) and since the assessment as reopened is beyond four years and there is no failure on the part of the assessee to disclose fully and truly all material facts and it is just a change of opinion, which is not permitted. 3. Notwithstanding the abovesaid ground of appeal, on the merits the Commissioner of Income-tax has rightly allowed the deduction under section 10B on the basis of the earlier order of the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh for the assessment year 2011-12 and the Department has accepted the said order of the hon'ble Income-tax Appellate Tribunal and has not filed any appeal on this ground before the hon'ble Punjab and Haryana High Court. 5. Brief facts of the case the assessee was a 100 per cent. export oriented unit engaged in manufacturing and export of jewellery. The assessee was claiming exemption under section 10B since the year of inception i.e. assessment year 2004-05. 6. Post-assessment proceedings for the assessment year 2011-12 the Assessing Officer has issued a notice under section 148 to the assessee vide letter dated April 25, 2014. The reasons recorded for reopening by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of purchase and sale produced by the assessee it was found that the assessee is not involved any export of goods manufactured by it. The assessee actually involved in doing job work of certain parties of Dubai. The asses see claimed that it has been involved in such activities in the previous year relevant to the assessment year 2007-08 also. The assessee furnished the copy of the purchase and sale bills from which it was observed that it is actually involved in job work only. The fact can apparently be seen from the so called purchase bill of M/s. Siroya Jewellers, Dubai submitted by it wherein the following note has been given on the invoice : 'This is to certify that the gold bars send by this invoice is delivered free of cost to M/s. Nikkamal Jewellers, N. S. E. Z. for manufacturing purpose. After manufacturing the jewellery, should be exported back to us or to Al Salam Jewellery LLC Dubai or to any of our nominated buyers. This gold is sent through Mr. Sanjeev Kumar Jain holder of Indian passport No. 71347665.' The note clearly shows that the assessee has only to carry out certain job as assigned and send back the material to same party or any person nomina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement to sell : (1) A contract of sate of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another. (2) A contact of sale may be absolute or conditional. (3) Where under a contact of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.' Goods have been defined by section 2(7) of the Sale of Goods Act as under : 'Goods means every kind of movable property other than the actionable claims and money ; and includes stock and shares, growing crops grass and things attached to or forming part of the land which are agreed to be served before sale or under the contract of sale.' Price has been defined by section 2(10) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of this order as annexure A, Page Nos. 27 to 43. Copies of all the sale bills are made part of this order as annexure B. page Nos. 44 to 60. (ii) It is important to note from the sale bills/bill of landing sub mitted by the assessee that only the amount of making charges was receivable by it. If the assessee had purchased the gold then it was entitled to receive the value of entire gold jewellery. In the instant case the assessee has not shown the entire value of jewellery as receivable but only the making charges have been shown as receivable. (iii) The fact that the assessee had to mention the weight loss during manufacturing of jewellery clearly establishes that it had not become the owner of the gold received but the entire quantity was to be returned. That is why manufacturing losses has to be mentioned in the sale bill. (iv) The assessee's submission that it is involved in conversion of imported gold as well as standard gold purchased from local market in jewellery is factually incorrect as discussed above. The assessee has never purchased or imported any gold as discussed at sub para I to III above. Factually the assessee has received either old jewe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r job work. (viii) The assessee has further submitted that on similar facts deduction has been allowed to it in earlier year by the Assessing Officer in order under section 143(3) of the Income-tax Act. The copies of the order for the assessment years 2007-08, 2008-09 and 2009-10 have been submitted. The assessee's argument is not accept able because the principle of res judicata does not apply to the Income-tax proceedings. It is well-settled that o finding on any matter in relation to a particular year of. assessment does not operate as res judicata on a similar question in the subsequent assessment year. In Joint Family of Udayan Chinubhai v. CIT [1967] 63 ITR 416 (SC) wherein the Supreme Court observed (page 423) : 'It is true that an assessment year under the Income-tax Act is a self-contained assessment period and a decision in the assessment year does not ordinarily operate as res judicata in respect of the matter decided in any subsequent year, for the Assessing Officer is not a court and he is not precluded from arriving at a conclusion inconsistent with his conclusion in another year. It is open to the Income-tax Officer therefore, to depart from his dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,19,70,207 2. 2008-09 1,03,44,26,295 2,96,94,126 2,96,94,126 3. 2009-10 1,19,14,16,709 2,85,72,199 2,85,31,092 4. 2010-11 34,61,259 Closer of a unit which was earning so handsomely cannot be explained by normal business prudence. The only possible reason for closer of the unit could be that no actual business was carried out from that place and the deduction under section 10B was not avail able to the assessee from the assessment year 2012-13. 3.6 From the facts discussed above it comes clear that the assessee is not involved in export of article or thing. The activity carried out by the assessee is not covered by the provisions of section 10B of the Income-tax Act, hence the claim of exemption under section 10B of the Income-tax Act is not allowable to it. The claim of exemption under section 10B of the Income-tax Act to the extent of ₹ 48,18,153 is disallowed. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee filed appeal before the learned Commissioner of Income-tax (Appeals) contesting the disallowance of claim under section 10B which has been regularly allowed to the assessee from the year of inception and also on the grounds that the notice under section 148 was invalid as no new facts have emerged in reopening of the case under section 147 on the same facts amounts to change of opinion. 8. The learned Commissioner of Income-tax (Appeals) has upheld the reopening of the assessment under section 147 and deleted the disallowance of the claim under section 10B on examination of the issue. 9. Aggrieved, the Revenue filed the present appeal before us contesting the deletion of disallowance under section 10B, whereas the assessee filed cross-appeal against the reopening of the assessment per se. 10. We have heard the learned representatives of both the parties and perused the material placed before us. 11. The moot point of the reopening of the case is that the assessee is not involved in the business of export and import of article or things but was merely doing a job work to the person for sending the gold to the assessee from Dubai which the assessee is exportin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned specific information it could not be said that the action of the Assessing Officer was on the basis of certain surmises or conjectures only. It could also not be said that the material in possession of the Assessing Officer could just make him have reason to suspect and not reason to believe that income escaped assessment. Moreover, adequacy of satisfaction of Assessing Officer is not justiciable as was held by the hon'ble Punjab and Haryana High Court in the case of Gurera Gas Cylinders Pvt. Ltd. v. CIT [2002] 258 ITR 170 (P H) and in the case of Swaraj Engine Ltd. v. Asst. CIT [2003] 260 ITR 202 (P H) following the judgment of the hon'ble Supreme Court in the case of Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC). The ratio of the decisions relied upon by the learned counsel would, therefore, not help the case of the appellant. 3.11 The notice under section 148 had not been issued on the conjectures and surmises but on sound footings and on the basis of information collected during the course of assessment proceedings for the assessment year 2011-12. It is incorrect to say that no new facts had come into existence. Actually, it had come to the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Absence of this finding makes the action of the Assessing Officer wholly without jurisdiction. In the instant case there has been no change in the business activity of the assessee right from the inception of the company and the deduction under section 10B has been continuously claimed examined and allowed by the Department. Similar view has been taken in the case of Duli Chand Singhania v. Asst. CIT [2004] 269 ITR 192 (P H) by the jurisdictional High Court. Even in the instant case there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. All the business processes have been stands examined by the Revenue in the previous assessment years. In the case of Apeejay Education Society v. Asst. CIT [2016] 47 ITR (Trib) 33 (Asr) it was held that the Assessing Officer must have reasons to believe that income chargeable to tax has escaped assessment and that such escapement occurred by reasons of failure on part of the assessee. The hon'ble Supreme Court in Indian Oil Corporation v. ITO [19 ..... 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