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TMI Blog2024 (9) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as fresh information in his possession warranting reopening of assessment. Taxability of Unreconciled entries in NOSTRO accounts 2.1. The Ld. CIT(A) erred in confirming the taxability of net un-reconciled entries in NOSTRO accounts outstanding for more than 5 years credited to P & L a/c. The CIT(A) ought to have noted that the said sum is not exigible to tax under any of the provisions of the Act. Taxability of amount received under Agricultural Debt Relief and Debt Waiver Scheme 3.1 The Ld. CIT(A) erred in holding that amount received from Government under the above scheme is exigible to tax whereas the said sum is utilized to reduce the amount due from farmers and also to reduce the provision held against these accounts. Since the above reduction of provision has effect of reduction otherwise allowable u/s 36(1)(viia), charging to tax this amount resulted in double disallowance''. 3. The revenue in ITA No.946/Chny/2018 has raised the following grounds of appeal: - ''1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case. 2. The learned CIT(A) has failed to observe that the provisions of sec.115JB are applicable even in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain. 6. The ld. Authorised Representative, argued that ld.AO erred in reopening u/s 147 the assessment already completed u/s 143(3) of the Act without there being any new 'tangible material' or fresh 'information' in the possession of AO to come to the conclusion that there is escapement of income. Ld.AR further submitted that the reopening was done in respect of unreconciled entries in NOSTRO account and amount received from Government under Agricultural Debt Relief and Debt Waiver Scheme based on the disclosures in annual accounts and in respect of amortization of investments based on the claim in the return of income. In support of above submissions, the ld.AR referred the judgment of the Hon'ble Supreme Court of India in the case of Kelvinator of India Ltd. (320 ITR 561 SC) and the order of co-ordinate bench of Tribunal in Assessee's own case in ITA No.782/Chny/2001 and ITA No.1991/Chny/2002 dated 15.06.2022 titled as Indian Overseas Bank Vs JCIT. 7. Per contra, the ld. CIT- DR relied upon the orders of the lower authorities and contended that in assessment proceedings claims were allowed to the assessee dehors the judgment of the Hon'ble Supreme Court enquiry was not done pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing its books of accounts under mercantile basis. However, while admitting the interest on securities for Income Tax purposes, the assessee bank reduced the interest accrued due to profit & loss account and offers the same on receipt basis. In this way, the assessee bank had reduced a sum of Rs. 12,66,24,544/- from the total income for the asst year 1991-92. In as much as the assessee offers the interest on securities on receipt basis, the sum of Rs. 12,66,24,544/- reduced from the total income for the asst year 1991-92 should have been offered to tax in the assessment for 1992-93 on case basis. Failure on the part of the assessee to include such income has resulted in under assessment of income to the extent of Rs. 12,66,24,544/-. I have reasons to believe that income chargeable to tax has escaped assessment within the meaning of Sec.147 of the Income Tax Act. Upon perusal of aforesaid reasons, it could be seen that while framing opinion of escapement of income, Ld. AO has not referred to any tangible material coming into the possession of Ld. AO subsequent to the framing of the regular assessment proceedings. It is an allegation that interest on securities have been offered on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in CIT V/s RPG Transmissions Ltd. (48 Taxmann.com 57). 10. Considering the ratio of aforesaid binding judicial pronouncements, the reassessment proceedings are liable to be quashed. We order so. The legal grounds urged by the assessee stand allowed. The Ld. AR submitted that in such an eventuality, the issue of computation of deduction u/s 80M would not arise. Concurring with the same, the ground thus raised stand dismissed as infructuous. The appeal stands disposed-off accordingly, 11. It is admitted position that facts as well as point of adjudication as well as the direction of Hon'ble High Court are pari-materia the same in AY 1993-94 except for the fact that issue of computation of deduction u/s 80M is not there in this year. The reasons recorded by Ld. AO to reopen the case of the assessee are substantially the same. Accordingly, the legal grounds urged by the assessee stand allowed and the appeal is disposed-off accordingly. 12. Both the appeals stand allowed in terms of our above order''. 11. Having gone through the judgments of the Hon'ble Supreme Court of India in the case of Kelvinator of India Ltd. (320 ITR 561 SC) and the order of co-ordinate bench of Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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