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TMI Blog2025 (3) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (Karn.) (HC) wherein it was held that addition can be made on other issues during the course of proceedings under section 147, even though reason for notice for 'such income' which may have escaped assessment may not survive? 2. Whether Ld. CIT(A) is right in relying upon the decision of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs CIT [2011] 336 ITR 136 (Del.) and in the case of Monarch Educational Society [2016] 387 ITR 416 (DEL) in view of decision of Hon'ble High Court of Delhi itself in the case of Pr. CIT(Central)-3, New Delhi Vs. Jakhotia Plastics (P) Ltd. wherein the issue under consideration was referred to the larger bench for adjudication afresh? 3. Whether the decision of Ld. CIT(A) quashing the re-assessment proceedings in this case is sustainable in view of decision of Hon'ble High Court of Delhi in the case of Pr. CIT(Central)-3, New Delhi Vs. Jakhotia Plastics (P) Ltd.? 4. The appellant craves to add, amend, alter or modify any grounds of appeal at the time of hearing." 3. The cross objections raised by the assessee in CO no. 69/DEL/2024 against the appeal preferred by the revenue are as under: - 1. That on the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2016-17 was re-opened on the basis of reasons for re-opening recorded vide notice/letter dated 08.12.2021 wherein the sole reason mentioned in the said reasons for re-opening was "alleged bogus unsecured loans". Copy of the said reasons recorded u/s 148 for re-opening the proceedings u/s 147 are enclosed herewith at Pg nos. However, no addition was made on the issues on the basis of which assessment was re-opened while framing assessment u/s 147 of the Act dated 31.03.2022 rather additions were made on the other issues. III. Covered Matter in favour of the assessee:- * By the Hon'ble Delhi High Court in the case of PCIT(Central)-1 vs M/s Mideast Integrated Steels Ltd in ITA no. 1482/2018 order dated 10.09.2024 (in this decision, position of law as settled in Ranbaxy Laboratories has been affirmed and this case has been rendered after the judgement in case of Jakotia Plastics). * By the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs CIT [2011] 336 ITR 136 (Del.) order dated 03.06.2011. * By the Hon'ble Bombay High Court in the case of CIT vs Jet Airways (I) Ltd. [2010] 331 ITR 236 (Bom.). * By the Hon'ble Delhi High Court in the case of Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may kindly be upheld wherein the impugned assessment order dated 31.03.2022 has been rightly quashed and thus the appeal of the revenue needs to be dismissed." 5. Brief facts of the matter are that the case of the assessee company was reopened vide notice u/s 148 of the Act dated 27.03.2021 on account of alleged information received during the course of a survey operation conducted on 20.08.2019 in case of the assessee company and case was centralized with the DCIT, CC-27, New Delhi. The reasons for reopening were sought by the assessee by the assessee company and thereafter, the copy of reasons recorded were provided vide dated 08.12.2021 wherein it was mentioned that the case has been re-opened on account of issue of "alleged bogus unsecured loans". 6. Thereafter, the assessment was framed by the Ld. AO vide order u/s 147 r.w.s. 143(3) of the Act dated 31.03.2022 whereby the income of the assessee company was determined at Rs. 13,49,06,636/- as against the returned income of Rs. 11,35,33,337/- by making additions to the tune of Rs. 2,13,73,299/- on different issues other than the alleged issue for reopening, i.e., alleged bogus unsecured loans. 7. The assessee company filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found, that the section puts no bar on the powers of the AO, to put to tax, any other income, chargeable to tax, which has escaped assessment, and which subsequently comes to his notice, in the course of the proceedings, but then, the prefixing words "and also", which succeeded "any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of ss. 148 to 153, assess or reassess such income". This expression was found to be making clear, that existence of the income, for which the AO formed belief, to have escaped assessment, is a precondition, for including any other income chargeable to tax, escaping assessment, and coming to the notice of the AO subsequently, in the course of the proceedings. Thus, unless and until such income, as giving rise to form belief, for escaping assessment, continues to exist, and constitutes a subject-matter of assessment, under s.147 "no other income" coming to the notice of the AO, during the course of the proceedings, can be roped in......." 10. The Ld. AR further submitted that the decision of Hon'ble Delhi High Court in case of Pr. CIT(Central)-3, New Delhi Vs. Jakhotia Plastics (P) Ltd relied upon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnataka High Court in the case of N. Govinda Raju Vs ITO [20l5] 377 ITR 243 (Karn.) (HC) and Hon'ble Delhi High Court in case of Pr. CIT(Central)-3, New Delhi Vs. Jakhotia Plastics (P) Ltd to support its contention that the Ld. CIT(A) was not right in quashing the assessment order dated 31.03.2022 in which order no additions were made on the issues for which reasons were recorded for the re-opening of the assessment. 14. On the other hand, the Ld. AR vehemently argued that the issue in appeal has already been settled by the Hon'ble Jurisdictional High Court of Delhi in case of Ranbaxy Laboratories Ltd. vs CIT [2011] 336 ITR 136 (Del.) and again reiterated the said position of law in its recent judgement in case of PCIT(Central)-1 vs M/s Mideast Integrated Steels Ltd in ITA no. 1482/2018 vide order dated 10.09.2024. Furthermore, several other High Courts have also pronounced judgements in conformity with the law laid down by the Hon'ble Jurisdictional High Court of Delhi in the case of Ranbaxy Laboratories (supra). 15. We have observed that the Ld. CIT(A) has also allowed the appeal of the assessee company by following the mandate of the Jurisdictional High Court of Delhi in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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