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TMI Blog2019 (12) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taken in the memorandum of appeal but are significant for the disposal of the appeal by the Tribunal. It was, therefore, prayed that the same be admitted, which was opposed by the ld. DR. 4. Having gone through the subject matter of the additional ground taken by the assessee, it is discernible that the same is a legal ground involving adjudication on questions of law and, therefore, in view of the decision of the Hon'ble Supreme Court in National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC), we admit the same and proceed to decide the same as per law. 5. The facts of the case are that the assessee is a Development Authority constituted under the Odisha Development Authorities Act, 1982. The assessee filed its return of income for the assessment year 2005-06 on 31.10.2005 declaring loss of Rs. 29,02,540/-. The Assessing Officer completed the assessment on 26.11.2009 u/s.144/147 of the Act, inter alia, adding Rs. 83,90,492/- to the total income of the assessee which was shown by the assessee as excess of capital expenditure over capital receipt and Rs. 31,18,535/- which was the receipt of the assessee from sale of shop rooms. The assessee carried the matter in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss of Rs. 29,02,540/- on 30.10.2005 and the same was processed u/s.143(1) of the Act on 24.2.2006. Ld D.R. further submitted that from para 2 of the said reassessment order, it is clear that subsequently the case was reopened u/s.147 of the Act and notice u/s.148 of the Act was issued on 31.7.2008, which was served on the assessee on 4.8.2008 and despite proper service of notice, no return of income was filed by the assessee in response to said notice issued to the assessee u/s 148 of the Act. Ld DR further submitted that when the assessee is not filing any return of income in response to notice u/s.148 of the Act nor submitting any request to the AO that his earlier return filed u/s.139 of the Act may be treated as returned filed in response to notice u/s.148 of the Act, then the assessee cannot raise any objection towards service of notice u/s.143(2) of the Act alleging the reassessment order as bad in law. 8. On careful consideration of the rival submission, we are of the considered opinion that on being asked by the Bench, ld counsel for the assessee, at Bar, in all fairness, accepted that the assessee has not filed any return of income in response to notice issued u/s.148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the fact that there was also deficit of Rs. 83,90,792/- in the capital account, which clearly reveals that in the capital account, the assessee has incurred expenditure more than the receipts showing deficit of Rs. 83,90,792/- in the capital account. Ld counsel submitted that the department was regularly accepting the income and expenditure account of the assessee, wherein, capital and revenue receipts and expenditure was clubbed together and surplus or deficit thereon was to be considered for the purpose of taxation. Ld counsel lastly submitted that if the rule of consistency is applied, it is clearly discernible from the income and expenditure account that there was deficit/loss of Rs. 29,02,540/- and, therefore, no addition is called for in this regard. 11. Replying to above, ld DR strongly supported the order of the AO as well as the CIT(A) and submitted that since the assessee is not registered u/s.12A of the Act and not claiming any exemption u/s.11 of the Act, therefore, the general principle of accountancy has to be applied to the case of the assessee. Ld D.R. submitted that the revenue and capital account cannot be mixed and the amount of surplus on revenue receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g activities which is reflected in its revenue account. In such a situation, I am unable to appreciate the grievance of the appellant in respect of the action of the AO in denying the set off of the deficit in the capital account. Admittedly the capital receipts in the current year is less than the capital expenditure and that is why the appellant has a loss and wants to be set off against its surplus in the revenue account. However, clearly this capital expenditure are either straight away capital expenditure on account of the appellant(as in the case of construction of shops) or are in the nature of expenditure in respect of assets not owned by the appellant. In the latter case, the appellant gets suitable grants/money to incur the expenditure. In either case, such expenses are neither allowable expenditure relating to the revenue account of the appellant nor such credits in the capital account which can as is clear from the grounds of appeal be loans be taken as revenue receipt. Therefore, in a year, if the appellant receives a loan or an advance from any authority say the Government or Berhampur Municipality to undertake a project and its relatable expenditure is either neg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the capital expenditure and that is why the assessee wants to set off against surplus in the revenue account. 15. In view of above, we see no reason to interfere with the order of the CIT(A) in confirming the addition of Rs. 55,50,620/- made by the AO. Accordingly, the sole ground on merits of the addition is dismissed. 16. In the result, appeal of the assessee is dismissed. ITA No.366/CTK/2014: A.Y. 2008-09 17. The assessee has raised additional grounds. Ground No.1 of assessee is as under: '"1. For that on the facts and in the circumstances, the assessment as initiated u/s.147 and as completed u/s.144/147 is arbitrary and unjustified insofar as no new materials were available for initiation or completion of proceedings u/s.147. 18. At the time of hearing, ld counsel for the assessee submitted before us that this specific ground was omitted to be taken through oversight and that it was taken on 16.3.2018. It was pleaded that assessee may be permitted to raise the additional ground which goes to the root of the matter and clearly transpires from the proceedings before the lower authorities with complete facts on record. 19. Replying to above, the learned departmental rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that there was no new tangible material available with the Assessing Officer while resorting to section 147/148 of the Act, more specifically, while framing original assessment u/s 143(3) of the Act, there was full disclosure of material facts by the assessee and on the basis of those facts, assessment was completed u/s 143(3) of the Act. For this proposition, he relied on the decision of Hon'ble Supreme Court in the case of CIT Vs. Kelvinator India Ltd. (2010) 310 ITR 561 (SC) and also the decision of Hon'ble Delhi High Court in the case of CIT vs Usha International Ltd. (2012) 348 ITR 485 (Delhi) 23. Replying to above, ld D.R. supported the orders of lower authorities. 24. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. We find that the assessment was completed u/s.143(3) of the Act on 16.12.2010 accepting the returned income. Subsequently, the Assessing Officer noticed that the assessee has claimed Rs. 3,72,23,360/- and Rs. 1,36,45,546/- in the revenue and the capital respectively as unutilised grants in aid. Therefore, the AO issued notice u/s.148 of the Act for reopening the assessment and completed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and obvious. To hold that the assessing officer in the first round did not examine the question or subject matter and form an opinion, would be contrary and opposed to normal human conduct. Such cases have to be examined individually. Some matters may require examination of the assessment order or queries raised by the Assessing Officer and answers given by the assessee but in others cases, a deeper scrutiny or examination may be necessary. The stand of the Revenue and the assessee would be relevant. Several aspects including papers filed and submitted with the return and during the original proceedings are relevant and material. Sometimes application of mind and formation of opinion can be ascertained and gathered even when no specific question or query in writing had been raised by the Assessing Officer. The aspects and questions examined during the course of assessment proceedings itself may indicate that the Assessing Officer must have applied his mind on the entry, claim or deduction etc. It may be apparent and obvious to hold that the Assessing Officer would not have gone into the said question or applied his mind. However, this would depend upon the facts and circumstance ..... 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