TMI Blog2022 (8) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... claim remaining additional depreciation in the current year when the asset was under use. The admission of the claim by the AO in the original assessment thus cannot be said to be in defiance of law. Clearly, the AO has proceeded on wholly erroneous presumption of facts not being in the nature of liability in the first instance. There being no escapement, the reopening on this count was not justified at all. Adverting to the second reason, we take notice of the plea on behalf of the assessee that the provisions for doubtful debts cannot be termed as unascertained liabilities in the light of the judgment in the case of CIT vs. HCL Comnet Systems Services Ltd., [ 2008 (9) TMI 18 - SUPREME COURT] - The plea of the assessee being the tune of law laid down by the Hon ble Supreme Court, we find merit in the plea of the assessee. A debt being an asset and not a liability, consequential provisions on account of doubtful recovery cannot be alleged to be an unascertained liability as correctly pleaded. Thus, no adjustment was required as per the extant law while computing the book profit on account of impairment / diminution of assets. For arriving at such conclusion, we also notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted under Section 143(3) of the Act. The notice issued under Section 148 is without legal foundation and thus requires to be quashed. The re-assessment order framed on the basis of such notice is without sanction of law and thus does not survive. Re-assessment order being bad in law, we do not consider it necessary to go into the merits under challenge on behalf of the assessee. - I.T.A. No.3703/DEL/2015 & 3371/DEL/2015 - - - Dated:- 8-8-2022 - SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER Appellant by: Shri Rohit Jain, Adv. And Shri Saksham Singhal, Adv. Respondent by: Shri Anuj Garg, Sr.D.R. ORDER PER PRADIP KUMAR KEDIA, A.M.: The captioned cross appeals have been filed by the Assessee and the Revenue respectively seeking to impugned the action of the CIT(A). 2. The grounds of appeal raised by the assessee reads as under: 1. That the CIT(A) erred on facts and in law in not holding that the reassessment order dated 04.03.2013 passed by the assessing officer under section 147/143(3) of the Income-tax Act, 1961 ( the Act ) to be beyond jurisdiction, bad in law and void-ab-initio. 1.1 That the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held to be not liable for tax. 7. That on the facts and circumstances of the case and in law subsidies received by the appellant under various schemes of the Central/State Government aggregating Rs. 13,55,96,736/- should be directed to be excluded from the taxable income of the appellant, being in the nature of capital receipt, not liable to tax. 7.1 That the CIT(A) erred on facts and in law in not adjudicating ground No.6 taken by the appellant regarding exclusion of the aforesaid subsidies aggregating Rs.13,55,96,736/- from the taxable income of the appellant, without assigning any reason. 3. The grounds of appeal raised by the Revenue reads as under: 1. The Ld. CIT(A) erred in law and on the facts in deleting the additions made for calculating book profit u/s.115JB of the Income Tax Act, 1961 of Rs.57,81,123/- on account of provisions for retirement benefits. 4. As per its grounds, the assessee has challenged the order of the CIT(A) both on jurisdiction as well as merits. 5. The jurisdiction being under challenge, we deem it expedient to deal with the challenge to the jurisdiction at the outset. 6. The assessee has challenged the jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 147 of the Act, the ld. counsel for the assessee broadly submitted that; (i) the Assessing Officer has proceeded on factually incorrect premise; (ii) the disposal of objection thereon by Assessing Officer without any speaking reasons and in a non challant manner. We shall deal with the nuances of various objections at appropriate place in succeeding paragraphs. 9. The ld. DR for the Revenue relied upon the action of the lower authorities and submitted that no fault can be found in the action of the Assessing Officer in the backdrop of the facts of the present case. It was further submitted that where the Assessing Officer has formed prima facie belief based on relevant material available with him, sufficiency of the belief per se cannot be examined vis- -vis reasons recorded for escapement. 10. We have considered the rival submissions and the material referred to and relied upon in the course of hearing. The assumption of jurisdiction under Section 147 being subject matter of challenge and goes to the very root of the subject matter, the same is dealt with hereunder. 10.1 On perusal of the reasons recorded, we observe that the Assessing Officer has sought to reopen the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer has declined to entertain the objection of the assessee only on the abstract reasoning that where no opinion has been formed in the original assessment. On this issue, the question of change of opinion does not arise. We totally disagree with the course adopted by the Assessing Officer while disposing of the objection. The explanation offered by the assessee is plain and simple and the Assessing Officer could not have shunned aside such explanation without dealing with it. 10.3 Before us as well, Mr. Jain, the ld. counsel for the assessee has demonstrated on facts that the additional depreciation was claimed on the per centage of the entitlement due to partial use of assets in the earlier year for lesser number of days. The asssessee was entitled in law to claim remaining additional depreciation in the current year when the asset was under use. The admission of the claim by the Assessing Officer in the original assessment thus cannot be said to be in defiance of law. Clearly, the Assessing Officer has proceeded on wholly erroneous presumption of facts not being in the nature of liability in the first instance. There being no escapement, the reopening on this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r year. Secondly, the assessee had adjusted the prior period expense against prior period income in sync with plethora of judicial precedents including Saurashtra Cement Chemical Industries vs. CIT, 213 ITR 523 (Guj.) wherein it has been clearly held that the assessee is entitled to make such adjustment and offer the net income of the earlier years. Thus, the action of the Assessing Officer in the original assessment cannot be assailed and the allegation of escapement could not have been made in the factual backdrop. The action of Assessing Officer is thus in the realm of review based on change of opinion which is not permissible in law. We thus find justification in the plea of the assessee on this score too as noted. 10.9 Noticiably, the Assessing Officer has failed to deal with any of the objection raised before him and passed a summary order without dealing with any of the objection by a speaking order as called upon him in the judgment of the Supreme Court rendered in GKN Driveshaft (Supra). This has defeated the very purpose of the procedure laid down in GKN Driveshaft (supra) for meeting the objections raised on behalf of the assessee. Notwithstanding, on scrupulous exa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
