TMI Blog2016 (11) TMI 1563X X X X Extracts X X X X X X X X Extracts X X X X ..... cided in favour of assessee. - ITA No. 1760/Ahd/2012 And CO No.159/Ahd/2012 - - - Dated:- 18-11-2016 - Shri N.K. Billaiya, Accountant Member And Shri S.S. Godara, Judicial Member For the Revenue : Shri Sita Ram Meena, Sr DR For the Assessee : Shri M.J. Shah, AR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA No. 1760/Ahd/2012 and CO No.159/Ahd/2012 are appeal of the Revenue and Cross-objection of the assessee respectively directed against the very same order of the CIT(A)-VIII, Ahmedabad dated 10.05.2012 pertaining to AY 2007-08. 2. At the very outset, the Counsel for the assessee took an additional plea challenging the jurisdiction of the Assessing Officer in issuing notice u/s 148 of the Act. It is the say ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. No question of finality of the remand order of the Tribunal could arise because the mandatory conditions for founding jurisdiction for initiating reassessment proceedings had not been fulfilled. The order of reassessment was, therefore, not valid. 5. In the light of the aforementioned judicial rulings, we proceed by admitting the additional issue raised by the ld. Counsel. 6. We find that the reasons recorded for reopening the assessment are as follows:- 1. The assessee is engaged in the business of builder - construction of immovable property, development and sale of residential plots. The assessee has filed return of income of ₹ 21,94,16,8687/. The total income is determined at ₹ 21,99,31,210/- for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove income chargeable to tax has escaped from assessment within the meaning of section 147 of the Act and the case is fit for issue of notice u/s 148 of the Income Tax Act, 1961. 2. As per Section 14A of the income-tax Act, 1961 deduction is not admissible in respect of expenditure incurred by the assessee in relation to income which does not form pan of the total income. Further, Section 10(34) of the Act provided that dividend income is not includible in the total income. Expenditure incurred by way of interest etc. to earn dividend income is therefore required to be disallowed under Rule 8D of the Income-tax Rules. The Mumbai ITAT (Special Branch) in case of Daga Capital has held that Rule 8D if the Income-tax Rules would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of same. 7. Explain why the rental income should not be treated as income from House Property and give details of all the expenses relatable to lease rental. 7.1 To these specific queries, the relevant replies of the assessee were as under:- 12. Whether any expenses have been claimed in respect of any exempt income. If yes then submit complete details of the same. (Para 24 of Annexure to notice) In this regard during the year exempt income claimed in computation of income share profit from firm and mutual fund dividend income details are as under:- SN Nature of Income Amount Remarks 1 5% share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sues considered at the time of the original assessment proceedings amount to change of opinion. Our view is fortified by the decision of Hon ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd, reported in [2010] 320 ITR 651 (SC), wherein the Hon ble Apex Court has held as under:- 4. On going through the changes, quoted above, made to s. 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the AO to make a back assessment, but in s. 147 of the Act (w.e.f. 1st April, 1989), they are given a go by and only one condition has remained, viz., that where the AO has reason to believe t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason to believe , Parliament re-introduced the said expression and deleted the word opinion on the ground that it would vest arbitrary powers in the AO. 10. Considering the facts in totality in the light of the ratio laid down by the Hon ble Supreme Court (supra), we find that the notice issued u/s 148 of the Act was without jurisdiction and deserves to be quashed. Consequently, the assessment made u/s 143(3) r.w.s. 147 of the Act vide order dated 27.12.2011 is quashed. 11. Since we have quashed the assessment order, we do not find it necessary to delve into the merits of the case. 12. In the result, appeal filed by the Revenue is dismissed and the Crossobjection filed by the assessee is also dismissed. Order pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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