TMI Blog2018 (10) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the Assessing Officer formed any opinion on this issue, it cannot be held that initiation of re-assessment proceedings under Section 148 of the Act was based on mere change of opinion. It is only when the Assessing Officer later realised that the deduction under Section 10BA of the Act was not allowable in respect to Duty Draw Back and that exemption of ₹ 15,88,601/- was allowed on account of this mistake, he initiated re-assessment proceedings by recourse to Section 148 of the Act vide notice dated 29.03.2012. - decided in favour of revenue. Deduction u/s 10BA - DEPB and DDB received by appellant - CIT(A) relying upon the judgment of the Supreme Court in Liberty India [2009 (8) TMI 63 - SUPREME COURT] held that Duty Draw Back and other such incentives are not profits derived from the eligible business and accordingly exemption under Section 10BA of the Act cannot be allowed - Held that:- In CIT Jaipur Vs. Suresh Kumar Bajoria [2017 (5) TMI 1492 - RAJASTHAN HIGH COURT] remanded the matter back to the Assessing Officer to reconsider the entire material all over again. Thus Impugned judgments are set aside to that extent and the matter is remanded back to the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide letter dated 03.04.2012 stated that the original return filed on 30.09.2008 may be treated as the return filed in response to the notice under Section 148 of the Act. Subsequently, on change of incumbent, notices under Sections 143(2) and 142(1) of the Act were issued on 26.12.2012 along with the show cause letter requiring the assessee to show cause as to why the deduction under Section 10BA of the Act claimed and allowed at ₹ 46,77,076/- instead of ₹ 30,86,971/-, which was in excess of ₹ 15,88,601/- may not be disallowed and added to total income of the appellantassessee. The appellant-assessee through its authorised representative submitted letter dated 16.01.2013 stating that there is no restriction in any of the sub-sections of Section 10BA of the Act while working out the profits of the business, the amounts received on account of Duty Draw Back (DDB) and Duty Entitlement Pass Book (DEPB) are to be excluded for allowing the deduction under this Section. It was further stated that the profits of the business were derived from the export of eligible articles. A request was made to drop the proceedings initiated under Section 148 read with Section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings under Section 148 read with Section 147 of the Act on the strength of subsequent judgment of the Supreme Court without forming requisite belief as to escapement of income . This argument was rejected by the CIT(A) holding that the Assessing Officer in its earlier order had not considered issue of allowability of deduction under Section 10BA of the Act in respect of Duty Draw Back because had he considered this issue, there would have been some query in this regard but no such query has been indicated by the appellant-assessee. The Assessing Officer could not apply his mind as there was no evidence that he had formed his opinion on this issue. It cannot be alleged that the re-assessment proceedings have been initiated on the basis of change of opinion. The second argument of the appellant-assessee before the CIT(A) was that the Assessing Officer had erred in law as well as in facts in treating the benefit of ₹ 15,88,601/- on DEPB and DDB not allowable under Section 10BA of the Act to the assessee firm. Even this argument was rejected by the CIT(A) by relying upon the judgment of the Supreme Court in Liberty India (supra), holding that duty draw ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellantassessee argued that Section 147 of the Act empowers the Assessing Officer to reopen an assessment if he has reason to believe that income has escaped assessment. However, in the present case, the appellant-assessee had furnished all the details as per query raised by the Assessing Officer, which was duly considered by him during the course of original assessment. In the audit report, the claim was made in Form 56H which revealed that the profit of the assessee firm was eligible for deduction under Section 10BA of the Act. The Assessing Officer, during the course of the assessment proceedings under Section 143(3) of the Act, vide questionnaire issued to the appellant-assessee, had asked to explain whether conditions as laid down for claiming of deduction under Section 10BA of the Act were fulfilled to which a detailed reply was submitted by the appellant-assessee and the Assessing Officer, after considering the reply, allowed the deduction under Section 10BA of the Act. The Assessing Officer therefore on the basis of mere change of opinion could not have reviewed the assessment in the garb of re-assessment. Learned counsel, in support of this argument, relied upon the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction under Section 10BA of the Act. It is argued that grant of deduction under Section 10BA of the Act to the appellant-assessee has been accepted by the Assessing Officer himself who has accepted such claim on the entire income except on the amount of DEPB and DDB. Mr. Sarvesh Jain, learned counsel argued that the lower authorities have failed to appreciate the fact that the sale proceeds of DEPB licences are now treated as business income by virtue of amendment to Section 28 of the Act, especially Section 28(iii) (c), (d) of the Act which specifically states that income from DEPB and DDB will be income chargeable to income tax under the head profits and gains of business or profession. The Judgment of the Supreme Court in the case of Liberty India (supra) is in the context of deduction under Section 80IA whereas the claim of the appellantassessee is in relation to deduction under Section 10BA of the Act. Therefore, the ratio of the judgment in Liberty India (supra) would not be applicable to the present case. In Liberty India (supra) , the Supreme Court dealt with provisions of Section 80IA of the Act wherein no formula was laid down for computing the profits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 SCC 208; Raymond Woollen Mills Ltd. Vs. Income Tax Officer and Ors., (2008) 14 SCC 218; T.S. Balaram Vs. Volkart Brothers, Bombay, (1971) 2 SCC 526 ; judgments of this Court in CIT, Jaipur Vs. M/s. Nash Fashions (D.B. Income Tax Appeal No. 464/2009 along with other connected matter decided on 29.05.2007); Ranjana Johari Vs. Assistant Commissioner of Income Tax, Circle-6, Jaipur (D.B. Income Tax Appeal No. 61/2016 decided on 23.10.2017) . This Court vide order dated 24.04.2018, while admitting this appeal, framed the first question of law to the effect that whether learned ITAT was right in upholding the action of the Assessing Officer in initiation of re-assessment proceedings under Section 148 of the IT Act, 1961 and consequent assessment made under Section 143(3) /147 of the IT Act, 1961. On hearing learned counsel for the parties and perusing the material on record, we find that the questionnaire issued to the appellant-assessee during the assessment proceedings and the assessment order dated 19.11.2010 passed on that basis make it clear that no information with regard to DEPB or Duty Draw Back was furnished by the appellant. There was indeed no adjudication on that aspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO Vs. V.J. Home Pvt. Ltd. (supra). But the appellant has now before this Court relied on judgments of the Supreme Court in Topman Exports (supra); Commissioner of Income Tax Vs. Meghalaya Steels Limited (supra) . In fact, the Co-ordinate Bench of this Court referring to aforesaid two judgments as also another judgment of this Court in CIT Jaipur Vs. Suresh Kumar Bajoria (D.B. Income Tax Appeal No. 294/2008 decided on 18.05.2017) remanded the matter back to the Assessing Officer to reconsider the entire material all over again. In yet another judgment in the case of M/s. Maharani Art Emporium Vs. Income Tax Officer, Ward-1(3), Jodhpur (D.B. Income Tax Appeal No. 151/2010 decided on 09.05.2018) , the Co-ordinate Bench of this Court has followed the same course of action. Therefore, while not deciding second substantial question of law framed in this appeal on merits, this Court deems it appropriate to adopt the same course of action. In the result, the appeal is allowed in part. Impugned judgments are set aside to that extent and the matter is remanded back to the Assessing Officer to decide the same afresh in accordance with law, however, leaving it open for both t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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