9911796707
TMI Blog2021 (3) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... already crystallized in the previous year relevant to A.Y.2011-12 and an expenditure on the basis of information available was claimed only for the reason that, the actual quantum of expenditure was not made known by KSBCL to whom the appellant sell IML as per Excise Act of Government of Karnataka as on the date of filing the return of income. 4. The learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that, the breakages and damages claimed was not a provision but expenditure crystallized during the relevant previous year and hence allowable under law for the A.Y.2011-12 U/s 28 of the act. 5. The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of expenditure of Rs. 66,31 408/- being arrack rentals paid allegedly for the reason that, it is a prior period expenditure. 6. The learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that, the expenditure though related to excise year 2001-02 fructified only during the previous year relevant to A.Y.2011-12 and hence allowable as expenditure for the said year. 7. The learned Commissioner of Income Tax (Appeals) erred in ignoring the fact that, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 66,31 408/- for the alleged reason that, the said expense was a prior period expense. c. Annul the order U/s.143(3) r.w.s 147 of the act for the reason that, the said order is bad in law." Brief facts of the case are as under: 2. The assessee is in the business of manufacturing of IMF L, rectified spirit, neutral spirit and other byproducts. It filed its return of income for year under consideration on 30/09/2011 declaring 'nil' income after setting off brought forward losses. The assessment was concluded under section 143(3) of the Act, on 28/02/2014 by making following disallowances: disallowance under section 14 A r.w.Rule 8D - Rs. 28,62,262/- disallowance of deduction claimed under section 36 (1)(va) of the Act -Rs. 3,38,328/- 3. Assessee filed appeal against the assessment order under section 143(3) before Ld.CIT(A) who allowed the appeal vide order dated 28/03/2014. Further an appeal was preferred by revenue before this Tribunal in ITA No.726/B/2016 wherein, this Tribunal by order dated 14/07/2017 dismissed the appeal of revenue. 4. In the meantime on 17/05/2016, notice under section 148 of the Act was issued to assessee in response to which, assessee filed ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15,888/- Arrack rentals -Rs. 66,31,408/- 7. Assessee filed various submissions in respect of the same which was disregarded by the Ld.AO. The Ld.AO passed order under section 143 (3) read with section 147 of the Act on 26/12/2017 by making the disallowances. 8. Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). The assessee raised the legal issue challenging the validity of reopening under section 147 of the Act, as it was after a period of 4 years from the end of the assessment year in which the original assessment order was passed. It was contested that there was no fresh evidence warranting invoking of the said provisions, and therefore the reopening is bad in law. 9. On merits assessee filed various submissions challenging the addition. 10. However the Ld.CIT(A) rejected the legal ground raised by assessee by observing as under: "The condition for re-opening the assessment can be stated that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment u/s.147. Where assessment u/s.143(3) or u/s.147 made earlier and reopening is done after expiry of four years from the end of the relevant assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues being subject matter of reasons recorded for reopening were considered by the Ld.AO and the original assessment proceedings. The it was submitted that, the details of breakages and damages were part of stock statement furnished along with the audit report and also the tax audit report filed along with the return of income wherein the loss of stock quantity wise was indicated. 15. As far as the expenditure of excise duty paid is concerned the Ld.AR submitted that the specific query was raised by the Ld. AO during the course of hearing and the information was furnished along with letter dated 26/11/2013. The Ld.AR placed reliance on the said letter placed at page 33 of paper book wherein Paras 6 gives the details in respect of arrack rentals. 16. He thus submitted that the reopening beyond period of 4 years without there being a satisfaction recorded by the Ld.AO regarding failure on behalf of assessee to truly and fully disclose all material facts, is bad in law. In support of his contention, the Ld.AR placed reliance on following decisions: ACIT vs FIS Global Business Solutions India (P) Ltd. (2019) 262 Taxmann 369 (SC) CIT vs Kelvinator India Ltd. reported in 320 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notice to reopen the assessment on such issues amounts to change of opinion. 22. Further the reasons recorded reproduced hereinabove suggests that there was no failure on behalf of assessee to fully and truly disclose all material facts necessary for assessment, which is a necessary precondition for reopening an assessment beyond a period of 4 years as stipulated under the Act. 23. The reasons recorded also reveal that, there has been no new material available with the Ld.AO which could justify the reopening of a concluded assessment beyond a period of 4 years. Respectfully following the ratio is laid down by various decisions cited hereinabove, we set aside and quash the notice dated 17/05/2016 seeking to reopen a concluded assessment to be bad in law. As we have set aside and quashed the notice of reopening, consequential assessment order passed by the Ld.AO stands to be quashed and set-aside. 20. As we have quashed the assessment order passed by the Ld.AO, we do not find it necessary to adjudicate the issues on merits alleged by assessee. Accordingly, appeal filed by assessee is allowed in terms of Ground 8. In the result appeal filed by assessee stands allowed. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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