TMI Blog2023 (10) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... not provided before the commencement of reopening proceeding though they were furnished in the course of reassessment proceeding because of which assessee was denied the opportunity to raise objection for reopening. We find that claim of the assessee is not in accordance with the procedural mandate given in the case of GKN. Driveshaft [ 2002 (11) TMI 7 - SUPREME COURT] and, therefore, has no legs to stand. It is a fact that original return was processed u/s. 143(1) of the Act. There was no scrutiny assessment u/s. 143(3) of the Act. In respect of claim of the assessee that there is no allegation recorded by the Ld. AO of failure on the part of the assessee about the full and true disclosure of all material facts necessary for assessment, we find that this condition is stipulated in first proviso to section 147 wherein requirement of assessment u/s. 143(3) is a pre-condition to record such an allegation by the Ld. AO, if an action is sought to be taken up under this section after the expiry of four years from the end of the relevant assessment year. Thus, even this contention of the ld. Counsel of the assessee fails. Additions u/s 41(1) towards written back of liabilities - c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That in the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the jurisdiction of the Ld. Assessing Officer in reopening the proceedings u/s. 147 of the I. T. Act, 1961. 3. That in the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the addition made by the Ld. ITO for cessation of liability to the extent of Rs. 35,73,027/-. 4. That in the facts and circumstances of the case, the Ld. CIT(A) erred in given finding about interest paid. 5. That in the facts and circumstances of the case, the appellant craves leave to add, alter modify and/or submit further or more ground(s) of appeal either before or at any time during the hearing of the appeal. 3. Before delving on the issues raised by the assessee in the appeal, we note that in the petition filed by the assessee seeking adjournment in the earlier dates of hearing, it is mentioned therein that Bench had directed the assessee to obtain certified copy of order sheet of reasons recorded for reopening of the case. In this respect, we have perused all the order sheet entries forming part of the appeal folder and could not find any such direction given by the Bench. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return, this amount was not offered to tax, it being a capital receipt in the hands of the assessee, not liable to income-tax. In the course of first appellate proceeding, Ld. CIT(A) enquired about this loan transaction which was written back in the P L Account but not offered to tax in the returned income vide office letter dated 13.03.2019 seeking various information from the assessee. The details sought by ld. CIT(A) vide this letter included:- 1. Complete details of transaction with Axion International Projects Ltd. 2. When was the transaction undertaken? 3. Copy of ledger a/cs for the last 4-5 years for the period since the transaction was initiated. 4. As it has been claimed that it is loss transaction. Details of interest paid in the earlier years. 5. Name, Address and PAN of Axion International Projects Ltd. 6. Whether any amount relating to Axion International Projects Ltd. has been debited to P L account, the details thereof. 4.3. However, assessee did not furnish any such details. Ld. CIT(A) thus, sustained the addition made by the Ld. AO. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, ld. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en back to demonstrate that an amount of Rs. 35,73,027/- had been written back in respect of five different parties against which liability stood in the books of the assessee. Reference was also made to page 42 of the paper book containing ledger account of AIPL containing entries from 01.04.2001 to 05.03.2019. It is worth noting that impugned assessment order is dated 19.08.2016 and therefore this ledger upto 05.03.2019 could not have been before the ld. AO, though stated to be filed before the ld. AO as certified in the index to the paper book. From this ledger, it was pointed that there was an opening balance of Rs. 35.50 lakh which was written back and credited to the P L Account. In the computation of income for the year, placed at page 27, assessee has reduced the amount of Rs. 35,73,027/- towards liabilities written back claiming it as exempt being capital receipt, to arrive at taxable income from business or profession. In this respect, ld. Counsel referred to the income tax return form and pointed that this amount has been reported in Schedule BP Sl. No. A.5.(c) under the head, income credited to P L Account which is exempt and then the same amount has been reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is to file the return and if he so desires, to seek reasons for issuing notice. Thereafter, the AO is bound to furnish reasons within a reasonable time. The relevant part from the judgment is reproduced as under: We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under section 148 of the Income Tax At is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reason within a reasonable time. On receipt of reasons, the notice 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 instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years. [emphasis supplied by us by bold and underline] 9. From the perusal of the records, it is evident that no where assessee has made a request before the Ld. AO for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e merits of the case since the reassessment proceedings have been quashed based on the legal grounds. In the present case before us, when compared with the decision of the Coordinate Bench, we note that Ld. CIT(A) has enquired about the issue of loan/advance taken by the assessee from AIPL which the assessee has failed to respond. Further, in the order sheet of the reassessment proceedings, the reasons recorded by the Ld. AO are the very first entry dated 15.03.2016 and on the subsequent entries the Ld. AR of the assessee is a signatory. These facts are distinguishable from those dealt in by the Coordinate Bench while arriving at its decision in the immediately preceding assessment year, in assessee s own case. Accordingly, reliance placed by the ld. Counsel on the said decision is distinguishable. 10. On the merits of the case, it is a fact that there is a credit balance in the books of account of the assessee including that of AIPL which remained outstanding for past several years as is laid down in ledger account referred above. Assessee has written back these outstanding liabilities as no more payable by crediting its P L Account. Ld. CIT(A) has enquired on the merits of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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