TMI Blog2019 (10) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of assessee s appeal regarding validity of reassessment is rejected. Deduction claimed in respect of provision for EDM and advances written off - The claim of the assessee is this that this amount of EMD has become bad in the present year and therefore, this write off should be allowed in the present year. Writing of bad debts is allowable on mere write off but in respect of write off of advances / deposits, the assessee has to establish that the same has become bad and it can be allowed in the year only in which it has become bad. In the present case it is stated by the AO that the assessee does not desire to be heard on the issue and the assessee has nothing to say and no evidence to furnish in connection with the amount of ₹ 3,50,76,954/- debited to P L account on account of provision for EMD deposits and advances. Hence it is seen that as per the assessment order, this is the case of the AO that the assessee has not furnished any detail. Regarding granting of opportunity to the assessee by the AO, it is seen that notice u/s. 142(1) was issued by the AO on 17.01.2014, date of hearing was fixed on 24.01.2014. It is noted by the AO that none appeared on that da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in treating the written submissions made before the AO during the course of appellate proceedings as 'additional evidence'. That the Appellant craves leave to add to and / or to alter, amend, rescind, modify, the grounds herein above or produce further documents before or at the time of hearing of this Appeal. 3. It was submitted by ld. AR of assessee that ground no. 1 is general. Regarding ground no. 2 i.e. regarding validity of assessment proceedings, it was submitted that the issue was decided by CIT(A) as per para no. 5.3 of his order in which it is held by him that as per the judgment of Hon ble Delhi High Court rendered in the case of Mega Corporation Ltd., it was held that in the light of section 124(3)(a) of the IT Act, an assessee is not entitled to question the jurisdiction of an Assessing Officer after expiry of one month from he date on which he is served a notice u/s. 142(1) or 143(2) or after the completion of assessment, whichever is earlier. For ready reference, we reproduce para 5.3 from the order of CIT(A) which reads as under. 5.3 The appellant has raised the grounds questioning the validity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision made in respect of any expenditure to be crystalised or to be incurred in future is not admissible deduction as per the IT Act, 1961 and therefore, this claim of assessee regarding provision is required to be disallowed and hence, the income amounting to ₹ 3,50,76,954/- has escaped assessment. In para no. 6 of the assessment order, it is noted by AO that assessee did not file return of income in response to notice u/s. 148 and the assessee has neither raised any objection to the notice u/s. 148 and assessee has not sought reasons for issuing notice u/s. 148. As per the judgment of Hon ble Apex Court rendered in the case of GKN Driveshafts (India) Ltd. vs. ITO, 259 ITR 19, it was held that when a notice under Section 148 of the Income tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices, then the assessing officer is bound to furnish reasons within a reasonable time and on receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the present case, the assessee has ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge upto 1962-63 but during the Assessment Year 1963-64, the AO objected to the change and also took the view that the excess amount realised from the transactions in securities constituted a revenue receipt and not a capital receipt as assessed in the earlier assessment order and on this basis, he reopened the assessment for Assessment Years 1960-61 to 1962-63 under Clause (b) of Section 147 of the Income-tax Act, 1961. The Tribunal held in that case that this is illegal but Hon ble High Court has accepted the view taken by revenue and under these facts, it was held by Hon ble Apex Court that reopening in this case is based on change of opinion and therefore, not valid. In the present case, the facts are different. This is not the fact of the present case that in any earlier year, the stand of the assessee was accepted by the AO and later on, the AO is trying to take a different view. Therefore, in our considered opinion, this judgment of Hon ble Apex Court is not applicable in the present case. 7. Now we examine the applicability of the Tribunal order rendered in the case of GMR Holdings (P.) Ltd. Vs. DCIT (supra). In this case, this was the stand of the revenue th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s letter, he was of the opinion that there is no escapement of income on this account. But this does not mean that any opinion framed at any point of time and intimated to the audit party is final and is binding on the AO. But notice u/s. 148 was issued by the AO on 28.02.2013 which is after more than one month from the date of this letter and in his period, the AO can come to a different conclusion after understanding the facts and therefore, because of this letter, it cannot be said that the reopening is not valid. Hence, we find no merit in this objection of the assessee and ground no. 2 of assessee s appeal regarding validity of reassessment is rejected. 9. Regarding ground nos. 3 and 4, it was submitted by ld. AR of assessee that in para no. 6.1 of his order, it is noted by CIT(A) that the assessee has filed copies of computation of income for Assessment Years 2004-05 to 2007-08 in support of his contention. But he held that these documents being additional evidence are not admissible under Rule 46A. He submitted that in the interest of justice, the matter should be restored back to the file of CIT(A) for fresh decision after admitting these documents. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36 taxmann.com 508 has held that where assessee had failed to produce documents during assessment and failed to establish reasonable cause therefor, additional evidence could not be accepted in appeal. Considering above, the additional evidence filed by the appellant cannot be accepted. 11. In our considered opinion, the claim of the assessee is this that this amount of EMD has become bad in the present year and therefore, this write off should be allowed in the present year. In our considered opinion, writing of bad debts is allowable on mere write off but in respect of write off of advances / deposits, the assessee has to establish that the same has become bad and it can be allowed int hat year only in which it has become bad. In the present case, as per para 7.3 of the assessment order, it is stated by the AO that the assessee does not desire to be heard on the issue and the assessee has nothing to say and no evidence to furnish in connection with the amount of ₹ 3,50,76,954/- debited to P L account on account of provision for EMD deposits and advances. Hence it is seen that as per the assessment order, this is the case of the AO that the assessee has no ..... 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