TMI Blog2020 (1) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were already available with him and duly examined during scrutiny proceedings under section 143 (3) of the Act. Therefore, reopening of assessment on same material is not permissible as held by the Hon`ble Supreme Court in the case of ACIT v. ICICI Securities Primary Dealership Ltd. [ 2012 (8) TMI 754 - SC ORDER ] wherein it was held that where accounts had been furnished by assessee when called upon and thereafter, assessment was completed u/s.143(3), subsequently, on a mere re-look of said accounts earlier furnished by assessee it is not permissible under section 147 to reopen assessment of assessee on ground that income has escaped assessment . In view of these facts and circumstances, we quash the reopening of assessment and allowed the grounds of appeal the assessee. - I.T.A No.2622/AHD/2016 (Assessment Year: 2009-10) - - - Dated:- 10-12-2019 - SHRI AMARJIT SINGH, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER Assessee by Shri Prakash Jhunjhunwala - CA Revenue by Shri B. P. K. Panda, Sr. D.R. ORDER PER O.P. MEENA, AM: 1. This appeal by the Assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated to the appellant has not deducted TDS under section 194C on labour expenses of ₹ 4,90,232 on which the assessee was liable to deduct tax at source @1%. Therefore, said amount is liable to be disallowed under section 40(a)(ia) of the Act, hence, income liable to be taxed is escaped assessment. This reason is erroneous as the assessee being an individual was not liable to deduct tax at source, since the assessee was not covered under section 44AB in the preceding year, the Explain-L to section 194C of the Act was not applicable. The learned counsel for the assessee further referred second line of reasons placed at Paper Book Page No. 4 which states as However, it was seen from the records that the assessee had shown total turnover of ₹ 37,24,205/- from his construction activities . This shows that notice under section 148 of the Act has been issued in absence of fresh tangible material and on relooking the same material available on record. 7. The learned counsel for the assessee further submitted that reasons recorded states that during original assessment an amount of ₹ 18,14,000 was less shown by the assessee on which addition of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial, labour and other direct overheads incurred by the assessee, ownership of which remained vested with the assessee, did not constitute turnover as used in section 44AB. Reliance placed on decision Esque Finmark (P) Ltd. v. ACIT [2014] 48 taxmann.com 292 (Mumbai- Trib.) held that amount of purchases cannot be included in qualifying amount of turnover as mentioned under section 44AB of Income Tax Act,1961. 8. The learned counsel for the assessee submitted that in original assessment under section 143 (3) the addition was made estimating income under section 44AD @8% of turnover and confirmed by the CIT (A), accordingly, when addition has been made by estimating profit no separate disallowance under section 40(a)(ia) can be made leading to alleged escapement of income, hence, reasons are erroneous. In support of this contention the learned counsel for the assessee relied in the case of ITO v. Mark Construction [2012] 23 taxmann.com 398 (Kolkata-Trib. The learned counsel for the assessee submitted that as per para 6.2 (4) of original assessment order the AO mentioned that it appears that all relevant books of accounts in respect of Shri Ridhi Siddhi Construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 44AD of I.T. Act. However, it was seen from the records that the assessee had shown total turnover of ₹ 37,24,205/- from his construction activities. However, during the course of assessment proceedings, an amount of ₹ 18,14,400/- was less shown by the assessee and addition of ₹ 1,45,120 /- was made @ 8% of the same. Further, in the appeal proceedings, the CIT (A) has confirmed 50% of the said receipts and from this amount, the assessee `s turnover exceeded ₹ 40 lacs. Therefore, the assessee is being specified person liable to audit of accounts under clause (a) or clause (b) of section 44AB of I. T. Act. During the year under consideration, the assessee has paid labour expenses of ₹ 4,90,232/- on which the assessee is liable to deduct tax at source @1% u/s. 194C of I. T. Act. However, the assessee failed to deduct tax u/s.19$C on labour expenses attracting the provisions of section 40(a)(ia) of the Act. Since, the tax has not been deducted on the above amount before expiry of the time prescribed u/s. 201(1), the same were required to be disallowed for computing the income chargeable under the head profits and gains of business or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ib) held that amount of purchases cannot be included in qualifying amount of turnover as mentioned under section 44AB of Income Tax Act,1961. We may Further, add that the reasons recorded for reopening of assessment cannot be improved upon during assessment proceedings. Hence, the validity of reopening of assessment is to be examined on the basis of reasons for reopening of assessment only, which is factually incorrect. 12. We further note that second line of reasons placed at Paper Book Page No. 4 which states as However, it was seen from the records that the assessee had shown total turnover of ₹ 37,24,205/- from his construction activities . This shows that notice under section 148 of the Act has been issued in absence of fresh tangible material and on relooking the same material available on record. Since there was no new material brought on record therefore, reopening of assessment is not valid in the light of judgement of Hon ble Gujarat High Court in the case of Hon ble Gujarat High Court in the case of Nilamben Sandipbhai Parikh v. ACIT [2019] 109 taxmann.com 336 (Gujarat) held there was no new tangible material available with the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during scrutiny proceedings under section 143 (3) of the Act. This facts is clearly discernible from para 6.4 of original assessment order. Therefore, reopening of assessment on same material is not permissible as held by the Hon`ble Supreme Court in the case of ACIT v. ICICI Securities Primary Dealership Ltd. [2012] 24 taxmann.com 310 (SC) wherein it was held that where accounts had been furnished by assessee when called upon and thereafter, assessment was completed u/s.143(3), subsequently, on a mere re-look of said accounts earlier furnished by assessee it is not permissible under section 147 to reopen assessment of assessee on ground that income has escaped assessment . In view of these facts and circumstances, we quash the reopening of assessment and allowed the grounds of appeal the assessee. 15. Since we have quashed the reopening of assessment, therefore, we do not consider it appropriate to deal with other ground on merits. 16. In the result, the appeal of the assessee is allowed. 17. The order is pronounced by listing the case on the Notice Board under Rule 34(4) of Income Tax Appellate Tribunal Rules 1963. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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