Tikaula Sugar Mills Ltd.,, v. ACIT, Circle-I,,

ITA 3617/DEL/2004 | 1999-2000
Pronouncement Date: 02-07-2010 | Result: Dismissed

Appeal Details

RSA Number 361720114 RSA 2004
Assessee PAN ROUGH1397T
Bench Delhi
Appeal Number ITA 3617/DEL/2004
Duration Of Justice 5 year(s) 10 month(s) 15 day(s)
Appellant Tikaula Sugar Mills Ltd.,,
Respondent ACIT, Circle-I,,
Appeal Type Income Tax Appeal
Pronouncement Date 02-07-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 02-07-2010
Date Of Final Hearing 17-06-2010
Next Hearing Date 17-06-2010
Assessment Year 1999-2000
Appeal Filed On 17-08-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.G. BANSAL ITA NOS. 3616& 3617(DEL)/2004 ASSESSMENT YEAR: 1998-99 & 1999-00 M/S TIKAULA SUGAR MILLS LTD. ASSI STANT COMMISSIONER OF INCOME 118-B NEW MANDI VS. TAX CIRCLE-1 MUZAFFARNAGAR. MUZAFFARNAGAR. ITA NOS. 3557 & 3556 (DEL)/2004 ASSESSMENT YEAR: 1998-99 & 1999-00 ASSTT. COMMISSIONER OF M /S TIKAULA SUGAR MILLS LTD. INCOME-TAX CIRCLE-1 VS. 1 18-B NEW MANDI MUZAFFARNAGAR. MUZAFFARNAGAR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SATINDRA KUMAR ADVOCATE DEPARTMENT BY : SHRI D.N. KAR CIT DR SHRI MANISH GUPTA SR. DR ORDER PER K.G. BANSAL : AM THESE CROSS APPEALS OF THE ASSESSEE AND THE RE VENUE WERE ARGUED IN A CONSOLIDATED MANNER BY THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. CIT(DR) AS COMMON ISSUES ARE INVOLVED. THEREFO RE WE FIND IT CONVENIENT TO PASS A CONSOLIDATED ORDER. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 2 ITA NO. 3616(DEL)/2004-A.Y. 1998-99- APPEAL OF THE ASSESSEE 2. THE ASSESSEE HAS TAKEN THREE SUBSTANTIVE G ROUNDS IN THIS APPEAL TO THE EFFECT THAT THE LD. COMMISSIONER OF INCOME -TAX ERRED IN-(I) UPHOLDING THE VALIDITY OF REOPENING THE ASSESSM ENT U/S 147 OF THE INCOME-TAX ACT 1961; (II) REJECTING THE SUBMISSIO N OF THE ASSESSEE THAT THE AO ACTED IN DEFIANCE OF THE DIRECTION ISSUED B Y THE ADDITIONAL COMMISSIONER OF INCOME-TAX U/S 144A OF THE ACT; A ND (III) HOLDING THAT THE EXPENDITURE ON DEVELOPMENT OF LAND AMOUNTED T O ONLY RS.3 30 423/- AGAINST RS. 33 04 232/- RECORDED IN THE BOOKS OF ACCOUNT. WHILE DOING SO HE ERRED IN IGNORING THE VALUATION REPORTS OF THE REGISTERED VALUER AND THE VALUATION OFFICER BUT RELYING ON THE OBS ERVATION OF THE AO IN THE MATTER. 2.1 THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED THE RETURN ON 31.3.1999 DECLARING NIL INCOME. THE ASSESSMEN T U/S 143(3) WAS COMPLETED ON 26.3.2001 AT NIL INCOME. IT IS IN TER-ALIA MENTIONED THAT THE ASSESSEE FILED REQUIRED DETAILS INFORMATION AN D DOCUMENTS. THE BOOKS OF ACCOUNT WERE EXAMINED. THE FACTORY BUILDING OF THE ASSESSEE IS IN THE STAGE OF CONSTRUCTION AND NO BUSINESS HAS BEEN C ARRIED OUT IN THIS YEAR. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 3 2.2 SUBSEQUENTLY THE ASSESSMENT WAS REOPENED FOR WHICH REASONS WERE RECORDED ON 10.01.2002. THESE REASONS R EAD AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) FOR THE YEAR UNDER CONSIDERATION IT WAS NOTICED THAT THE ASSESSEE COMPANY HAS DECLARED THE INVESTMENT ON LAND AND SITE DEVELOPMENT BUILDING AND CIVIL WORK AT RS. 1 00 12 252/- FOR TOTAL QUANTITY OF EARTH WORK ESTIMATED AT RS. 6 75 000/- CUBIC METER. THIS DEVELOPMENT OF EARTH WORK WAS STA TED TO BE DONE THROUGH 1397 TRACTORS. THE AO CONSIDERED THIS INVESTMENT VERY LOW HENCE HE REFERRED THE M ATTER TO THE VALUATION OFFICER NEW DELHI ON 10.11.2000 FOR COR RECT VALUATION OF THE INVESTMENT MADE BY THE ASSESSEE COMPANY. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 26. 03.2001 BEING TIME BARRING CASE WITH THE FINDING THAT AF TER RECEIVING THE VALUATION REPORT IT WILL BE EXAMINED THORO UGHLY AND IF NECESSARY FURTHER ACTION WILL BE INITIATED. N OW THE VALUATION REPORT HAS BEEN RECEIVED AND THE V ALUATION OFFICER VIDE HIS REPORT NO. DVO/ND/IT-48/2000-200 1/202 DATED 27.12.2001 HAS OBSERVED/COMMENTED AS UND ER:- (I) THE ASSESSEE HAS FAILED TO SUPPLY THE INI TIAL AND FINAL LEVELS OF THE LAND WHERE SUCH ENORMOUS EAR TH WORK OF 6.75 LACS CUBIC METER HAS BEEN DONE. THE REGISTERED VALUERS ESTIMATES SUBMITTED BY THE ASSESSEE OF M/S RAJIV JAIN & ASSOCIATES HAVE SIM PLY CONSIDERED THE AVERAGE HEIGHTS OF EARTH WORK IN VOLVED WITHOUT ANY ACTUAL MEASUREMENTS AT SITE WHICH CAN BE DONE ONLY FROM TOPOGRAPHICAL CHARTS OF INI TIAL AND FINAL LEVELS. IN THE ABSENCE OF SUCH DETAIL S HAVING BEEN FURNISHED BY THE ASSESSEE THE AUTHENTICITY OF SUCH WORK IS DOUBTFUL AND CANNOT BE VERIFIED AT THI S END. (II) THE CONTENTION OF THE ASSESSEE THAT NO RE GISTRATION OF TRACTOR NUMBERS IS REQUIRED BY FARMERS IN U.P. IS WRONG SINCE IT HAS BEEN ASCERTAINED FROM U.P. TRANSPORT AUTHORITIES THAT REGISTRATION NUMBERS O F TRACTORS IS MUST IN U.P. IN ABSENCE OF TRA CTOR ITA NOS. 3556 3557 3616& 3617(DEL)/2004 4 NUMBERS HAVING BEEN SUPPLIED BY THE ASSESSEE AUTHENTICITY OF DEVELOPMENT OF 1397 TRACTORS IS ALSO DOUBTFUL. (III) FURTHER NO LOG BOOKS SHOWING THE DETAI LS OF DEPLOYMENT OF TRACTORS ON DAY-TO-DAY BASIS HAVE BEEN MAINTAINED BY THE ASSESSEE THEREBY RAISING A FUR THER DOUBT ABOUT SUCH HUGE AMOUNT OF EARTH WORK. (IV) THOUGH THE QUOTATION FOR EARTH WORK RECE IVED BY THE ASSESSEE (AS MENTIONED IN LETTER DATED 28.02.2001) WAS RS. 39.50 PER CUBIC METER PAYME NT HAS BEEN MADE BY THE ASSESSEE TO TRACTOR OWNER S ON HOURLY BASIS FOR REASONS BEST KNOWN TO THE A SSESSEE. (V) SINCE THE EARTH WORK INVOLVED IN THE DEVELO PMENT OF SITE WAS ENORMOUS IT IS NOT POSSIBLE THAT TH E ASSESSEE HAD INVITED SINGLE QUOTATION FOR RS. 3 9.50 PER CUBIC METER. IN THE LIGHT OF ABOVE COMMENTS INVESTMENTS DE CLARED BY THE ASSESSEE ON THE DEVELOPMENT WORK ARE DOUBTFUL AND ARE NOT ACCEPTABLE TO MEASUREMENT. 2. AS PER TERMS AND CONDITIONS OF THE IDBI THE COMPANY SHALL PAY TO IDBI UP-FRONT FEE @ 1.05% OF THE A MOUNT SANCTIONED BEFORE OR ON EXECUTION OF LOAN AGR EEMENT. THE COMPANY WAS SANCTIONED TOTAL LOAN OF RS. 8.5 CRORE BY THE IDBI ON WHICH TOTAL UP-FRONT FEE HAS TO BE PAID @ 1.05% WHICH COMES AT RS. 8 92 500/- BUT THE ASSESSEE COMPANY HAS PAID THIS FEE AT RS. 12 50 000/-. THUS THE CO MPANY HAS PAID EXCESS UP-FRONT FEE BY RS. 3 75 500/- WHICH SHOU LD BE ADDED IN THE INCOME OF THE ASSESSEE COMPANY. 3. THE SHARE APPLICATION MONEY AS ON 31.03.19 97 WAS AT RS. 16 66 000/- AND AS ON 31.03.1998 WAS A T RS. 2 57 19 000/-. THERE IS INCREASE IN THE SHARE A PPLICATION MONEY BY RS. 1 10 59 000/- DURING THE FINANCIAL YEAR 1997- 98 BUT ACCORDING TO THE COPY OF ACCOUNT FILED FOR THE SHARE APPLICATION MONEY THE INCREASE COMES TO RS. 1 1 1 49 000/-. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 5 THUS THERE IS A DIFFERENCE IN INCREASE IN THE SHARE APPLICATION MONEY BY RS. 90 000/-. 4. THE DETAILS FILED FOR SHARE APPLICATI ON MONEY THE CLOSING BALANCE AS ON 31.03.1998 HAS BEEN SHOWN AT RS.31 00 000/- WHICH WAS THE OPENING BALANCE AS O N 01.04.1998. IT IS NOT EXPLAINED HOW THE CLOSING BALANCE AS ON 31.03.1998 HAS BEEN SHOWN AT RS. 2 57 19 000/- IN THE BALANCE-SHEET ENDING ON 31.03.1998 WHILE IN TH E DETAILS/COPY OF ACCOUNT OF SHARE APPLICATION M ONEY FILED FOR A.Y. 1998-99 THE OPENING BALANCE WAS SHOWN AT RS. 31 00 000/-. THERE IS A GREAT DIFFERENCE IN THE CLOSING BALANCE OF SHARE APPLICATION MONEY AS PER BALA NCE SHEET AND AS PER COPY OF ACCOUNTS/DETAILS FILED WHIC H REMAINED UNEXPLAINED. 5. THEREFORE I HAVE REASON TO BELIEVE THAT ASSESSEES INCOME ESCAPED FROM ASSESSMENT. ACTION U/S 147 OF THE I.T. ACT IS TAKEN. ISSUE NOTICE U/S 148 OF THE I.T. ACT 1961. 2.3 THE ASSESSEE FURNISHED RETURN U/S 148 ON 1 2.2.2002 DECLARING NIL INCOME. THEREAFTER THE ASSESSMENT PROCEEDINGS WERE INITIATED BY ISSUING STATUTORY NOTICES U/S 143(2) AND 142(1). THESE PROCEEDINGS WERE COMPLETED ON 13.3.2003 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 18 624/- BY DISALLOWING THE INTEREST CL AIMED BY THE ASSESSEE IN RESPECT OF BORROWED FUNDS. THE INTEREST WAS CONSIDERED AS PRE- OPERATIVE EXPENDITURE AND THUS IT WAS CAPITAL IZED FOR CONSIDERATION IN SUBSEQUENT YEARS. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 6 2.4 AGGRIEVED BY THIS ORDER THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS) MUZAFFARNAGAR WHO DISPOSED OFF TH E SAME ON 28.5.2004 IN APPEAL NO. 31/03-04/MZR. THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. AGGRIEVED BY THIS ORDER BOTH THE ASSE SSEE AND THE REVENUE ARE IN APPEAL BEFORE US. 3. AS MENTIONED EARLIER GROUND NO. 1 IS AGAIN ST THE FINDING OF THE LD. CIT(A) THAT THE AO WAS JUSTIFIED IN REOPENING THE ASSESSMENT U/S 147 OF THE ACT. IT IS MENTIONED THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) AFTER SCRUTINIZING THE AUDITED BO OKS OF ACCOUNT AND CONSIDERING ALL RELEVANT FACTS. THE REASONS RE CORDED BY THE ASSESSING OFFICER DO NOT SUGGEST THAT ANY INCOME ESCAPED ASSESSMENT BY DINT OF THE ASSESSEES FAILURE TO DISCLOSE FULLY AND TRULY A LL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. IT IS FURTHER MENTIONED THAT NO ADDITION WAS FINALLY MADE IN RESPECT OF ANY OF THE REASONS RECORDED BY THE AO. 3.1 IN THIS CONNECTION THE LD. COUNSEL FOR THE ASSESSEE MENTIONED ABOUT THE BACKGROUND FACTS NAMELY THAT THE ASSES SEE-COMPANY WAS INCORPORATED IN THE YEAR 1994. IT PURCHASED LAN D WHICH WAS IN FACT ACQUIRED BY THE STATE GOVERNMENT AND GIVEN TO I T. IN THE YEAR UNDER ITA NOS. 3556 3557 3616& 3617(DEL)/2004 7 CONSIDERATION THE WORK OF LEVELING OF THE LAND HENCEFORTH MENTIONED THAT LAND-DEVELOPMENT WAS CARRIED OUT WHICH WAS INCOMPLETE. THE AO MADE A REFERENCE TO THE DISTRICT VALUATION OFFIC ER FOR ESTIMATION OF THE EXPENDITURE INCURRED ON THE LAND-DEVELOPMENT. HOW EVER SUCH A REPORT WAS NOT MADE BY THE DVO BEFORE FINALISATION OF T HE ORIGINAL ASSESSMENT PROCEEDINGS. THE ASSESSEE STARTED ITS MANUFAC TURING ACTIVITIES IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2000-0 1. SINCE NO BUSINESS WAS CONDUCTED IN THIS YEAR NIL RETURN WAS FI LED AND ORIGINAL ASSESSMENT WAS ALSO COMPLETED ACCORDINGLY. THE CASE OF THE LD. COUNSEL IS THAT THE REASONS RECORDED BY THE AO DO NOT CONFORM TO THE STATUTORY LANGUAGE OR THE CASES DECIDED U/S 147. 3.2 IN ORDER TO SUPPORT THE AFORESAID CONTENTION REFERENCE WAS MADE TO THE REPORT OF THE DVO PLACED IN THE PAPER BOO K ON PAGE NOS. 8 TO 10. IT IS HIS CASE THAT THIS REPORT CANNOT BE SA ID TO BE A VALUATION REPORT AS NO FIGURE WAS PLACED IN RESPECT OF HIS ESTIMATE OF THE EXPENDITURE ON LAND-DEVELOPMENT FOR THIS YEAR OR EVEN FOR THE SU BSEQUENT YEAR. IT IS ONLY MENTIONED THAT THE INVESTMENT DECLARED BY THE ASSESSEE IS DOUBTFUL AND IS NOT SUSCEPTIBLE TO MEASUREMENT. IT WAS ARG UED THAT SUCH A REPORT CANNOT FORM VALID REASONS FOR REOPENING THE ASSESSMENT. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 8 3.3 COMING TO THE CASE LAW RELIANCE WAS PLACE D ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SMT. AMIYA BALA PAUL VS. CIT (2003) 262 ITR 407 IN WHICH IT WAS INTER-ALIA HELD THAT THE VALUATION OFFICER HAS NO JURISDICTION TO MAKE VALUATION U/ S 131 OR SECTION 133 OF THE ACT. FOR THE SAKE OF READY REFERENCE THE RE LEVANT PORTION OF THE JUDGMENT AT PAGE 416 OF THE REPORT IS REPRODUC ED BELOW:- APART FROM THE AFORESAID THE VALUATION OFFICE R IS APPOINTED UNDER THE WEALTH-TAX ACT AND CAN DISCHARGE FUNCT IONS WITHIN THE STATUTORY LIMITS UNDER WHICH HE IS APPOINT ED. IT IS NOT OPEN TO A VALUATION OFFICER TO ACT IN HIS CAPACIT Y AS VALUATION OFFICER OTHERWISE THAN IN DISCHARGE OF HIS STATUTORY FUNCTIONS. HE CANNOT BE CALLED UPON NOR WOULD HE HAVE THE JURISDICTION TO GIVE A REPORT TO THE ASSESSING OFFICER UNDER THE INCOME-TAX ACT EXCEPT WHEN A REFERENCE IS M ADE UNDER AND IN TERMS OF SECTION 55A OR TO A COMPETENT AUTHORITY UNDER SECTION 269L. WE ARE THEREFORE OF THE VIEW THAT THE HIGH COURT INCORRECTLY ANSWERED THE QUESTION REFERRED TO IT IN THE AFFI RMATIVE. THE TRIBUNAL HAD NOT ERRED IN HOLDING THAT THE ASSES SING OFFICER CANNOT REFER THE MATTER TO THE VALUATION OFFICE R FOR ESTIMATING THE COST OF CONSTRUCTION OF THE HOUSE PROPERTY. THE APPEAL IS ACCORDINGLY ALLOWED AND THE D ECISION OF THE HIGH COURT SET ASIDE. THERE WILL BE NO ORDER AS TO COSTS. 3.4 FURTHER RELIANCE WAS PLACED ON THE DECI SION OF HONBLE DELHI HIGH COURT IN THE CASE OF SATNAM OVERSEAS LTD. & ANOTHER VS. ADDITIONAL CIT (2010) 228 CTR 121 IN WHICH IT WAS INTER -ALIA HELD THAT THE MATERIAL ON WHICH THE AO NOW SEEKS TO RELY WA S ALREADY THERE BEFORE ITA NOS. 3556 3557 3616& 3617(DEL)/2004 9 HIM IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDI NGS. NO NEW MATERIAL CAME ON RECORD AFTER COMPLETION OF THE ORIGINAL ASSESSMENT WHICH WAS MADE U/S 143(3). THEREFORE IT WAS HELD THAT TH E ASSESSEE IS LIABLE TO SUCCEED IN RESPECT OF ITS CHALLENGE AGAINST R EOPENING THE ASSESSMENT. FOR THE SAKE OF READY REFERENCE THE RELEVANT PORTION OF THE DECISION IN PARAGRAPH 6 IS REPRODUCED BELOW:- 6. WE FEEL THAT THE WRIT PETITIONS HAVE TO SUCCEED BECAUSE THE CONTENTIONS AS RAISED ON BEHALF OF THE CO UNSEL FOR THE PETITIONER ARE WELL FOUNDED. THE ONLY REASON W HICH HAS BEEN GIVEN SEEKING RE-OPENING OF THE ASSESSMENT FOR THE YEARS 1997-98 AND 1998-99 IS THAT SUPPRESSION OF SAL ES HAVE TAKEN PLACE ON ACCOUNT OF THE FACT THAT WHEN AVERAGE PRICE OF THE CLOSING STOCK IS MULTIPLIED WITH THE QUA NTITY OF THE SALES IN THE YEAR THEN THE VALUE OF THE SALES WOULD B E AT A HIGHER FIGURE THAN THAT AS DECLARED BY THE ASSESSEE. CLEARLY THERE IS NO NEW MATERIAL WHICH IS ALLEGED TO HAVE COME TO THE NOTICE OF THE AO WHICH HAS CAUSED HIM TO SEEK REOPENING OF THE ASSESSMENT. ADMITTEDLY THE REASONS GIVEN FOR SEEKING REOPENING OF THE ASSESSMENT CONTAINS THE EXPRE SSION PERUSAL OF THE CASE RECORD REVEALS CLEARLY SHOWING THAT IT IS ON THE BASIS OF THE SAME ASSESSMENT RECORD A S WAS FILED BY THE ASSESSEE DURING THE RELEVANT ASSESSMEN T YEARS AND ALSO SCRUTINIZED BY THE AO BEFORE PASSING THE OR DERS UNDER S. 143(3) IS THE BASIS FOR SEEKING RE-OPENING OF TH E ASSESSMENT. FURTHER THE NEW LOGIC RATIONALE AND OPINION WH ICH HAS BEEN FORMED BY THE AO FOR SEEKING RE-OPENING OF THE ASSESSMENT IS NOTHING BUT A CHANGE OF OPINION AND A NEW APPRO ACH TO THE EXISTING FACTS AND MATERIAL WHICH THE AO COULD W ELL HAVE DONE DURING THE REGULAR ASSESSMENT PROCEEDINGS OF THE RELEVANT ASSESSMENT YEARS. NOT ONLY THIS THE RATIONALE/LOGIC/REASONS GIVEN THAT SALE PRICE OF STOCKS DURING THE ENTIRE ASSESSMENT YEAR WOULD REMAIN CONSTANT IS SOMETHING WHICH INDEED CONFOUNDS US. IT CANNOT STAND TO ITA NOS. 3556 3557 3616& 3617(DEL)/2004 10 REASON THAT THE PRICE OF SALE OF PADDY/RICE/PULSE S REMAINED CONSTANT THROUGHOUT THE YEAR SO THAT ON THE BASIS OF AN AVERAGE PRICE OF THE CLOSING STOCK THE SALE P RICE FOR THE ENTIRE YEAR COMPRISING OF 12 MONTHS 48 WEEKS AN D 365 DAYS CAN BE ASCERTAINED IN THAT THE SAME WOULD HAV E REMAINED FIXED THROUGHOUT THIS PERIOD. EVEN ASSUMING TH AT THIS LOGIC IS CORRECT IT WAS SURELY AN EXERCISE WHIC H THE AO COULD HAVE DONE ON THE BASIS OF MATERIALS WHICH HE IS NOW PRESENTLY SEEKING TO DO BECAUSE THE SAME VERY MATERIALS WERE AVAILABLE TO HIM IN THE RELEVANT ASSESSME NT YEARS AND MERELY BECAUSE THE AO FEELS THAT HE HAS FAILED TO DO WHAT HE OUGHT TO HAVE DONE CANNOT BE A VALID GROUN D FOR SEEKING INTIMATION OF RE-ASSESSMENT UNDER SS. 147/148 OF THE ACT. SO FAR AS THE ISSUE OF CLAIMING DEPRECIATION ON TARPAULIN IS CONCERNED THE LD. SENIOR COUNSEL HAS REFERRED TO THE CORRESPONDENCE SPECIFICALLY ENTERED INTO IN THIS BEHALF IN THE RELEVANT ASSESSMENT YEAR 1999-00 AND PARTICULAR LY THE LETTER DATED 22 ND FEB. 2002 WHICH SPECIFICALLY MENTIONS A NOTE WITH RESPECT TO THE CLAIM OF DEPRECIATION ON TARPAULIN. THE SAID NOTE ON THE CLAIM FOR DEPRECIATION FOR TAR PAULIN CLEARLY GIVES THE REASON THAT LIFE OF THESE TARPAULIN COVERS ARE SUBJECT TO ELEMENTS SUCH AS DUST RAIN AND SUN AND CONSEQUENTLY 100 PER CENT DEPRECIATION IS CLAIME D BECAUSE THEY GET TORN ON ACCOUNT OF FREQUENT USE. WITH REGARD TO THE ASSESSMENT YEAR 2000-01 THE LEARNED SENIO R COUNSEL FOR THE PETITIONER HAS REFERRED TO A SPECIFIC LE TTER DATED 22 ND MARCH 2002 WHEREBY A SPECIFIC NOTE WITH REGA RD TO DELAY IN PAYMENT OF PROVIDENT FUND WAS GIVEN TO THE AO . ALL THE AFORESAID ARGUMENTS AND THE DOCUMENTS RELIED UPON BY THE LEARNED COUNSEL FOR THE PETITIONER ALONG WITH R EASONS GIVEN FOR SEEKING REOPENING OF THE ASSESSMENT UNDER SS. 147/148 OF THE ACT MAKE IT MORE THAN ABUNDANTLY CLEAR THAT IN ALL THE AFORESAID ASSESSMENT YEARS THE REASONS REFER NOT TO ANY CONCEALMENT OF FACTS WHATSOEVER BUT IN FACT R EASONS GIVEN HAVE SIMPLY RELIED UPON THE RECORD WHICH WAS ALREADY AVAILABLE BEFORE THE AO WHILE COMPLETING THE ASSE SSMENT PROCEEDINGS UNDER S. 143(3) OF THE ACT. NOT ONLY THIS IT IS QUITE CLEAR THAT THE VERY ASPECT OF DEDUCTION U NDER S. 80HHC AND S. 80IA MEANS THAT ENTRIES WITH RESP ECT TO ITA NOS. 3556 3557 3616& 3617(DEL)/2004 11 CLAIMS OF DEDUCTIONS TOWARDS EXPENDITURE WHETHER TOWARDS PF/ESI OR THE VALUATION OF THE STOCK WAS VERY M UCH CONSIDERED BY THE AO FOR CONSIDERING THE CLAI M OF THE ASSESSEE UNDER S. 80HHC AND S. 80IA IN THE R ELEVANT ASSESSMENT YEARS. IT IS NOT THEREFORE AS IF ANY NEW MATERIAL HAS COME ON RECORD OR THAT THERE WAS BULK MATERI AL AND IN RESPECT OF WHICH SOME MATERIAL COULD NOT HAVE B EEN CONSIDERED BY THE AO. SURELY AN OBVIOUS THING WOULD HAVE BEEN AND IN FACT HAS BEEN DULY CONSIDERED BY T HE AO SUCH AS VALUATION OF STOCK AND ALLOWING OF THE CLA IM OF EXPENDITURE/CONTRIBUTION TOWARDS PF AND ESI. ONCE ALL THESE ASPECTS WERE CONSIDERED AND ALSO OUGHT TO HAVE BEEN CONSIDERED FROM THE OBVIOUS MATERIAL AVAILABLE ON RECORD WHICH WAS DULY DONE BY AND BROUGHT TO THE NOT ICE OF THE AO WE DO NOT FEEL THAT THERE IS ANY SCOPE FOR RE-ASSESSMENT PROCEEDINGS UNDER S. 147 OF THE ACT BY ISSUING OF NOTICE UNDER S. 148 THEREOF. 3.5 RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDI A LTD. (2010) 228 CTR 488 IN WHICH IT WAS INTER-ALIA MENTIONED THAT EVEN AFTER THE AMENDMENT IN SECTION 147 WITH EFFECT FROM 01.04.1989 THE AO HAS POWER TO REOPEN A COMPLETED ASSESSMENT PROVIDED THAT TH ERE IS SOME TANGIBLE MATERIAL ON THE BASIS OF WHICH HE COMES TO THE C ONCLUSION THAT THE INCOME HAS ESCAPED ASSESSMENT. 3.6 RELIANCE WAS ALSO PLACED ON THE DECISION O F HONBLE GUJARAT HIGH COURT IN THE CASE OF KAIRA DISTRICT COOPERATIVE MI LK PRODUCERS UNION LTD. VS. ASSISTANT COMMISSIONER OF INCOME-TAX (1995) 216 ITR 371 PERTAINING ITA NOS. 3556 3557 3616& 3617(DEL)/2004 12 TO ASSESSMENT YEAR 1987-88. THE HONBLE COURT ME NTIONED THAT ONE OF THE PRE-CONDITIONS FOR ISSUING NOTICE IN SUCH A CA SE IS THAT THE ASSESSEE FAILED TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. THERE IS NO SUCH ALLEGATION AGAINS T THE ASSESSEE. THEREFORE IT WAS HELD THAT A NOTICE ISSUED U/S 148 WAS B AD IN LAW. 3.7 THE ASSESSEE ALSO RELIED ON THE DECISION REPORTED AT 230 CTR 232 (BOM.) IN THE CASE OF PRASHANT JOSHI; AND ( 1989) 31 ITD 177 IN THE CASE OF UPASANA HOSPITAL & NURSING HOME VS. ITO. 4. IN REPLY THE LD. DR SUBMITTED THAT LAND- DEVELOPMENT WORK WAS CARRIED OUT IN THREE YEARS STARTING FROM THIS YEAR. THE AO HAD REFERRED THE MATTER TO THE DVO FOR ITS VALUATION DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. IN SPITE OF VARIOUS R EMINDERS THE REPORT COULD NOT BE SUBMITTED BY HIM IN TIME. IN VIEW THER EOF THE AO APPENDED AN OFFICE NOTE TO THE ASSESSMENT ORDER MENTIONING INTER-ALIA THAT IN SPITE OF REPEATED REMINDERS THE VALUATION REPORT HAS NO T BEEN RECEIVED SO FAR. THERE IS NO TIME LEFT FOR CONTINUING THE PROCEEDI NGS FURTHER. THEREFORE THE ASSESSMENT IS COMPLETED. AFTER RECEIVING THE VALUATION REPORT IT WILL BE EXAMINED THOROUGHLY AND IF NECESSARY FURTHER AC TION WOULD BE INITIATED. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 13 ON THE BASIS OF THESE FACTS IT WAS ARGUED THA T IN SO FAR AS ACCOUNTING OF LAND-DEVELOPMENT EXPENSES IS CONCERNED NO VER IFICATION COULD BE DONE IN THE ASSESSMENT PROCEEDINGS. THE ASSESSEE H AD NOT COOPERATED WITH THE DVO WHO ULTIMATELY REPORTED ON 27.12.2001 THAT INVESTMENT ON DEVELOPMENT WORK IS DOUBTFUL AND IT IS NOT SUSCE PTIBLE TO MEASUREMENT. HE MADE THE FOLLOWING COMMENTS BEFORE ARRIVING AT THE AFORESAID CONCLUSION:- (I) THE ASSESSEE HAS FAILED TO SUPPLY THE INITI AL AND FINAL LEVELS OF LAND WHERE SUCH ENORMOUS EARTH WORK OF 6.75 LAKH S CUBIC METER HAS BEEN DONE. THE REGISTERED VALUERS ESTIMA TES SUBMITTED BY THE ASSESSEE OF M/S RAJIV JAIN & ASSOCIATES HAVE SIMPLY CONSIDERED THE AVERAGE HEIGHTS OF EARTH WORK INVOLVED WITHOUT ANY ACTUAL MEASUREMENTS AT SITE WHICH CAN BE DONE ONLY FROM TOPOGRAPHICAL CHARTS OF INITIAL AND FINAL LEVELS. IN THE ABSENCE OF SUCH DETAILS HAVING BEEN FURNISHED BY THE ASSESS EE THE AUTHENTICITY OF SUCH EARTH WORK IS DOUBTFUL AND CANNOT BE VERIFIED AT THIS END. (II) THE CONTENTION OF THE ASSESSEE THAT NO RE GISTRATION OF TRACTOR NOS. IS REQUIRED BY FARMERS IN U.P. IS WRONG S INCE IT HAS BEEN ASCERTAINED FROM U.P. TRANSPORT AUTHORITIES TH AT REGISTRATION NOS. OF TRACTOR NOS. IS A MUST IN U.P. IN THE ABSENCE OF TRACTOR NOS. HAVING BEEN SUPPLIED BY THE ASSESSEE AUTHENT ICITY OF DEVELOPMENT OF 1397 TRACTORS IS ALSO DOUBTFUL. (III) FURTHER NO LOG BOOKS SHOWING THE DETAILS OF DEPLOYMENT OF TRACTORS ON DAY-TO-DAY BASIS HAVE BEEN MAINTAINE D BY THE ASSESSEE THEREBY RAISING A FURTHER DOUBT ABOUT SUCH HUGE AMOUNT OF EARTH WORK. (IV) THOUGH THE QUOTATION FOR EARTH WORK RECEIVED BY THE ASSESSEE (AS MENTIONED IN THE LETTER DATED 28.02.2001) WAS RS. 39.50 PER CUBIC METER PAYMENT HAS BEEN MADE BY THE ASS ESSEE TO ITA NOS. 3556 3557 3616& 3617(DEL)/2004 14 TRACTOR OWNERS ON HOURLY BASIS FOR REASONS BE ST KNOWN TO THE ASSESSEE. (V) SINCE THE EARTH WORK INVOLVED IN THE DEVELO PMENT OF SITE WAS ENORMOUS IT IS NOT POSSIBLE THAT THE ASSESSEE HAD INVITED SINGLE QUOTATION FOR RS. 39.50 PER CUBIC METER. 4.1 THE ARGUMENTS OF THE LD. DR WERE TWO-FOLDS NAMELY THAT (I) SINCE DETAILS REGARDING EXPENDITURE INCURRED O N LAND-DEVELOPMENT WERE NOT AVAILABLE NO OPINION WAS FORMED BY THE AO IN THIS MATTER IN THE ORIGINAL ASSESSMENT; AND (II) THE REPORT OF THE DVO RAISE SERIOUS DOUBTS ABOUT THE AUTHENTICITY OF THE VALUATION REPORT OF M/S RAJIV JAIN & ASSOCIATES AND ALSO THE EXPENDITURE BOOKED BY TH E ASSESSEE IN THIS REGARD. THEREFORE THE AO RECORDED THE REASO NS ON THE BASIS OF THE REPORT FOR REOPENING THE ASSESSMENT. SINCE THERE WAS NO FORMATION OF OPINION EVEN IN SCRUTINY ASSESSMENT IT WAS ARGUED THAT THERE WAS NO QUESTION OF CHANGE OF OPINION. 4.2 THE CASE MADE OUT IN THE REASONS IS THAT VERY LITTLE INVESTMENT WAS REQUIRED FOR LAND-DEVELOPMENT BUT THE SAME HAS BEEN INFLATED TO A VERY HIGH FIGURE. IN THESE CIRCUMSTANCES THE AO WAS JUSTIFIED IN REFERRING THE MATTER TO THE DVO AS THE ASSESSE E HAD NOT SUBSTANTIATED INVESTMENT IN LAND-DEVELOPMENT. THE PAYMENT MADE ON HOURLY BASIS ITA NOS. 3556 3557 3616& 3617(DEL)/2004 15 AGAINST THE EARLIER QUOTATION RECEIVED OF RS. 39.50 PER CUBIC METER ALSO POINTS OUT THAT THE INVESTMENT WAS HIGHLY I NFLATED. THEREFORE IT WAS ARGUED THAT THE REASONS SHOULD BE READ ALONG WITH THE REPORT OF THE DVO MENTIONED ABOVE. 4.3 IN ORDER TO SUPPORT THE AFORESAID SUBMISSION RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (2007) 291 ITR 500. IN THIS CASE IT HAS BEEN HELD THAT AN INTIMATION U/S 143(1)(A ) IS NOT AN ASSESSMENT ORDER BUT IS MERELY DEEMED TO BE NOTICE OF DEMA ND U/S 156 THE APPARENT PURPOSE OF WHICH IS TO PUT IN MOTION THE MACHIN ERY PROVISIONS FOR RECOVERY OF THE DEMAND. NOTHING FURTHER CAN BE READ INTO THE INTIMATION. SINCE SUCH AN INTIMATION IS MADE WITHOUT APPLIC ATION OF MIND FOR COMPUTATION OF INCOME IT CANNOT BE SAID THAT A NY OPINION IS FORMED AS TO CORRECTNESS OR OTHERWISE OF THE TOTAL INCOME DECLARED BY THE ASSESSEE. IN SUCH A CASE THERE WILL BE NO QUESTION OF CH ANGE OF OPINION WHEN ASSESSMENT IS SOUGHT TO BE MADE SUBSEQUENTLY U/S 147. 4.4 FURTHER RELIANCE WAS PLACED ON THE DECISI ON OF HONBLE ALLAHABAD HIGH COURT THE JURISDICTIONAL HIGH COURT IN TH E CASE OF SMT. SHAHSI JAIN ITA NOS. 3556 3557 3616& 3617(DEL)/2004 16 VS. ITO & ANOTHER (1997) 228 ITR 682. IN THAT CASE INTIMATION U/S 143(1)(A) WAS MADE AND SUBSEQUENTLY NOTICE W AS ISSUED U/S 148 ON THE BASIS OF THE REPORT OF THE VALUER. THE VALUER HAD NOT GIVEN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE MAKING THE REPORT. THE HONBLE COURT CAME TO THE CONCLUSION THAT THERE WAS NO NEED OF ISSUING A LETTER BEFORE ISSUANCE OF NOTICE U/S 148. THE ARGUME NT THAT THERE WAS NO REASON TO BELIEVE WAS ALSO NOT ACCEPTED BY TH E HONBLE COURT. THUS THE PETITION WAS DISMISSED SUBJECT TO THE REMARK THAT THE CORRECTNESS OF IMPORT CAN BE CONTESTED IN THE COURSE OF ASSES SMENT PROCEEDINGS. 4.5 RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SRI KRISHNA PVT. LTD. VS . ITO & OTHERS (1996) 221 ITR 538. THE HONBLE COURT HELD THAT THE AO HAD RECORDED THE REASONS AND THERE WAS NO REASON FURNISHED FOR SUPPLY O F MANGANESE ORE AT A RATE LOWER THAN THE MARKET RATE. THUS ALL THE CONDITIONS MENTIONED IN SECTION 147(A) (PRE-AMENDED SECTION) WERE SATISF IED. THE RELEVANT PORTION OF THE DECISION AT PAGE 551 OF THE REPORT IS REPRODUCED BELOW:- SO FAR AS THE FIRST CONDITION IS CONCERNED THE INCOME-TAX OFFICER IN HIS RECORDED REASONS HAS RELIED UPO N THE FACT AS FOUND BY THE CUSTOMS AUTHORITIES THAT THE APPEL LANT HAD UNDER-INVOICED THE GOODS IT EXPORTED. IT IS NO DOUBT CORRECT THAT THE SAID FINDING MAY NOT BE BINDING UPON TH E INCOME-TAX AUTHORITIES BUT IT CAN BE A VALID REASON TO BEL IEVE THAT THE ITA NOS. 3556 3557 3616& 3617(DEL)/2004 17 CHARGEABLE INCOME HAS BEEN UNDER-ASSESSED. THE FINAL OUTCOME OF THE PROCEEDINGS IS NOT RELEVANT. WHA T IS RELEVANT IS THE EXISTENCE OF REASONS TO MAKE THE INCOME- TAX OFFICER BELIEVE THAT THERE HAS BEEN UNDER-ASSESSMENT OF T HE ASSESSEES INCOME FOR A PARTICULAR YEAR. WE ARE SATISFIED THAT THE FIRST CONDITION TO INVOKE THE JURISDI CTION OF THE INCOME-TAX OFFICER UNDER SECTION 147(A) OF THE A CT WAS SATISFIED. AS REGARDS THE SECOND CONDITION THE APPELLAN T DID NOT PRODUCE THE BOOKS OF ACCOUNT KEPT BY THEM AT T HEIR HEAD OFFICE IN LONDON NOR THE ORIGINAL CONTRACTS OF SALE WHICH WERE ENTERED INTO AT LONDON WITH THE BUYERS. THE APPELLANT DID NOT PRODUCE BEFORE THE INCOME-TAX OFFICER A NY OF THE ACCOUNTS WHICH RELATED TO THE FOREIGN BUYERS. N O REASONS WERE GIVEN FOR THE SUPPLY OF MANGANESE ORE AT A RATE LOWER THAN THE MARKET RATE. IT IS FOR THE ASSESSEE T O DISCLOSE ALL THE PRIMARY FACTS BEFORE THE INCOME-TAX OFFICER TO ENABLE HIM TO ACCOUNT FOR THE TRUE INCOME OF THE ASSESSEE. THE PROVEN CHARGE OF UNDER-INVOICING PER SE SATISFIES T HE SECOND CONDITION. THE APPELLANTS ASSESSABLE INCOME HA S TO BE DETERMINED ON THE BASIS OF THE PRICE RECEIVED BY IT FOR THE GOODS EXPORTED. IF THE TRUE PRICE HAS NOT BEEN DISCLOSED AND THERE WAS UNDER-INVOICING THE LOGICAL CONCLUSI ON PRIMA FACIE IS THAT THERE HAS BEEN FAILURE ON THE PAR T OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATER IAL FACTS BEFORE THE INCOME-TAX OFFICER. WE ARE THEREFORE S ATISFIED THAT BOTH THE CONDITIONS REQUIRED TO ATTRACT THE PR OVISIONS OF SECTION 147(A) HAVE BEEN COMPLIED WITH IN THIS CAS E. 4.6 RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAYMOND WOOLLEN MILLS LTD . VS. ITO & OTHERS (1999) 236 ITR 34 IN WHICH IT WAS INTER-ALIA HELD THAT WHAT IS TO BE SEEN IS THAT THERE IS PRIMA-FACIE SOME MATERIAL ON THE BASIS OF WHICH REVENUE CAN REOPEN THE ASSESSMENT. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 18 4.7 RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ESS ESS KAY ENGINEERING CO. PVT. LTD. VS. CIT (2001) 247 ITR 818 IN WHICH IT WAS MENTIONED THAT THE RE WAS MATERIAL AVAILABLE BEFORE THE ITO ON THE BASIS OF WHICH HE COULD REOP EN THE CASE AND THAT IT WAS NOT A CASE OF MERE CHANGE OF OPINION. 4.8 RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ANUSANDHAN INVESTMENT LTD. VS. M.R.SINGH DEPUTY COMMISSIONER OF INCOME-TAX & ANOTHER (2006) 287 ITR 482. CERTAIN CONCLUSION WAS DRAWN REGARDING LEVIABIL ITY OF CAPITAL GAINS IN PROCEEDINGS OF ASSESSMENT YEAR 1993-94 ON THE BA SIS OF WHICH THE ASSESSMENT FOR ASSESSMENT YEAR 1992-93 WAS REOP ENED. THE HONBLE COURT CAME TO THE CONCLUSION THAT THE FINDING IN ASSESSMENT YEAR 1993-94 FURNISHED GOOD GROUND FOR REOPENING THE ASSESS MENT FOR ASSESSMENT YEAR 1992-93. THE ARGUMENT OF THE LD. D.R. WAS THAT FACTS FOUND IN ONE YEAR CAN FORM THE BASIS FOR REOPENING ASSESSMENT O F THE PRECEDING OR SUCCEEDING YEAR. 4.9 RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF EMA INDIA LTD. VS. ASSISTANT COMMISSIONER ITA NOS. 3556 3557 3616& 3617(DEL)/2004 19 OF INCOME-TAX IN CIVIL MISCELLANEOUS WRIT PETITION NO. 181 (TAX) OF 2004 2009-TIOL-526-HC-ALL-IT DATED 16.09.2009. IT W AS HELD THAT THE INFORMATION MAY BE OBTAINED EVEN FROM THE RE CORD OF ORIGINAL ASSESSMENT BY MAKING INVESTIGATION INTO THE MATER IAL ON RECORD OR BY MAKING FURTHER ENQUIRY OR RESEARCH INTO FACTS O R LAW. THIS PROPOSITION LAID DOWN IN THE CASE OF KALYANJI MAVJI & CO. VS. CIT (1976) 102 ITR 286 (SC) STILL HOLDS GOOD. 4.10 IN THE REJOINDER THE LD. COUNSEL REFERRE D TO PARAGRAPH 18 OF THE DECISION IN THE CASE OF RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUPRA) WHEREIN IT IS MENTIONED THAT SO LONG AS INGREDIE NTS OF SECTION 147 ARE FULFILLED THE AO IS FREE TO INITIATE PROCEEDING S U/S 147 AND FAILURE TO TAKE STEPS U/S 143(3) WILL NOT RENDER THE AO POWERLESS TO INITIATE RE- ASSESSMENT PROCEEDINGS EVEN WHEN INTIMATION U /S 143(1) HAS BEEN ISSUED. HIS CASE IS THAT ASSESSMENT HAD BEEN MADE U/S 143(3) AND THE INGREDIENTS OF SECTION 147 DO NOT STAND FULF ILLED IN THIS CASE. 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. BEFORE PROCEEDING WITH THE DETERMINA TION OF THE ISSUE AT HAND IT MAY BE MENTIONED THAT WHAT WE HAVE TO LOOK AT THIS STAGE IS THE STATE ITA NOS. 3556 3557 3616& 3617(DEL)/2004 20 OF RECORD AT THE TIME OF WRITING THE REASONS FOR RE-OPENING THE ASSESSMENT. THE SUBSEQUENT DEVELOPMENTS DO NOT HAVE ANY IMPACT ON THIS MATTER. ALTHOUGH THE LD. COUNSEL HAD MADE S OME SUBMISSIONS ON THIS ISSUE BY TAKING INTO ACCOUNT THE SUBSEQUENT DEVELOPMENTS WE HAVE SCRUPULOUSLY AVOIDED ANY REFERENCE TO SUCH SUB MISSIONS IN VIEW OF THE AFORESAID PROPOSITION OF LAW. 5.1 THE FACTS OF THE CASE ARE THAT ASSESSMENT WAS COMPLETED U/S 143(3) ON 26.3.2001 AT NIL INCOME. FOR THIS YEA R THE ASSESSEE HAD NOT CARRIED OUT ANY BUSINESS ACTIVITY. IT WAS ENGA GED IN LAND-DEVELOPMENT AND EXPENDITURE OF RS. 33 04 232/- WAS ENTERED I N THE BOOKS ON THIS ACCOUNT. THE AO WAS NOT SATISFIED WITH THE QUA NTUM OF EXPENDITURE. THEREFORE IN THE COURSE OF ORIGINAL ASSESSMENT HE REFERRED THE MATTER TO THE DVO FOR ESTIMATING THE AFORESAID EXPENDIT URE. HIS REPORT WAS NOT RECEIVED TILL THE COMPLETION OF THE ASSESSMENT. IN VIE THEREOF HE AO MADE AN OFFICE NOTE TO THE ASSESSMENT ORDER TO THE EFFECT THAT APPROPRIATE ACTION SHALL BE TAKEN AFTER THE RECEIPT OF THE VALUATION REPORT. THEREFORE IT CAN BE SAID THAT IN ABSENCE OF FULL EVIDENCE HE COULD NOT APPLY HIS MIND PROPERLY TO THIS ISSUE. IN THE CIRCUMSTANCES HE WAS FORCED TO COMPLETE ASSESSMENT ACCEPTING THE RETURN AS S UCH. IN OTHER WORDS ITA NOS. 3556 3557 3616& 3617(DEL)/2004 21 THERE WAS NO APPLICATION OF MIND ON HIS PART TO COME TO THE CONCLUSION AS TO WHETHER THE INVESTMENT WAS RECORDED AT PROPE R AMOUNT IN THE BOOKS. 5.2 THE REPORT WAS RECEIVED ON OR ABOUT 27.12.2 001. THERE ARE SOME ARGUMENTS FROM BOTH SIDES AS TO WHETHER THE A FORESAID REPORT CONSTITUTED A VALUATION REPORT. THE CASE OF THE LD. COUNSEL I S THAT IT IS MERELY A LETTER AND NOT A REPORT AS NO FIGURE HAS BEEN PUT BY THE DVO ON THE EXPENDITURE ESTIMATED BY HIM. WE TEND TO AGRE E WITH THIS INTERPRETATION OF THE LETTER AS IT DOES NOT CONTAIN THE VIEWS OF THE DVO IN RESPECT OF QUANTIFICATION OF THE EXPENDITURE. HOWEVER IT IS ALSO CLEAR FROM THE LETTER THAT HE COULD NOT PUT ANY FIGURE ON THE EXPENDITURE BECAUSE THE ASSESSEE FAILED TO FURNISH THE TOPOGRAPHICAL C HART OF THE SITE BEING THE LAND PURCHASED BY THE ASSESSEE. HE POINTED OU T CLEAR DEFECTS IN THE REPORT OF THE REGISTERED VALUER WHEN IT WAS MENTIONED THAT HE SIMPLY CONSIDERED THE AVERAGE HEIGHT OF EARTH WORK W ITHOUT ANY ACTUAL MEASUREMENT AT THE SITE. HE ALSO POINTED TOWA RDS THE LACUNAE IN THE METHODOLOGY OF GETTING THE WORK DONE. IN THIS CONNE CTION IT WAS MENTIONED THAT IT IS IMPROBABLE THAT ONLY ONE QUOTATIO N WOULD BE INVITED FOR ENORMOUS LAND-DEVELOPMENT WORK INVOLVING 6.75 LAKH CUBIC METER OF EARTH-FILLING. IT WAS FURTHER POINTED OUT THAT HAVING CALLED FOR THE ITA NOS. 3556 3557 3616& 3617(DEL)/2004 22 QUOTATION THE WORK WAS NOT GOT DONE AS PER QUOTATION. THE WORK WAS ENTRUSTED TO VARIOUS TRUCK OWNERS WHO WERE PAI D NOT ON THE BASIS OF CUBIC METER OF EARTH BUT ON PER-DAY BASIS. THE ASSESSEE WAS ALSO NOT ABLE TO FURNISH THE REGISTRATION NUMBERS OF THE TRUCKS EMPLOYED FOR THIS WORK ON THE GROUND THAT SUCH REGISTRATION IS NOT REQUIRED BY THE FARMERS IN U.P. THIS ASSERTION WAS FOUND TO BE WRONG BY HIM. THEREFORE IT WAS CONCLUDED THAT THE EXPENDIT URE SHOWN IN THE BOOKS IS NOT VERIFIABLE AND INVESTMENT SHOWN IN THE BOOKS IS DOUBTFUL. IN VIEW OF THESE FACTORS IT CAN BE CONCLUDED SAFELY THA T THERE WAS MATERIAL BEFORE THE AO TO COME TO THE CONCLUSION THAT INVESTME NT HAS NOT BEEN PROPERLY RECORDED IN THE BOOKS OF ACCOUNT. 5.3 SECTION 147 REGARDING INCOME ESCAPING ASS ESSMENT READS AS UNDER IN SO FAR AS OUR PURPOSE IS CONCERNED:- IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T FOR ANY ASSESSMENT YEAR HE MAY SUBJECT TO THE PROVIS IONS OF SECTIONS 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSE QUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTIO N OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOWA NCE OR ANY OTHER ALLOWANCE AS THE CASE MAY BE FOR THE AS SESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIO NS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR): ITA NOS. 3556 3557 3616& 3617(DEL)/2004 23 PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-S ECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR T HE RELEVANT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UND ER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESS MENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSES SEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. 5.4 THE PROVISION CONTAINED IN THE PROVISO TO THI S SECTION IS NOT APPLICABLE FOR THE REASON THAT ALTHOUGH THE ORI GINAL ASSESSMENT WAS MADE U/S 143(3) THE ACTION REGARDING ISSUANCE OF N OTICE U/S 148 WAS TAKEN BEFORE THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE FACTS IN THIS CONNECTION ARE THAT THE REASONS WERE RECORDED ON 10.01.2002 AND RETURN U/S 148 WAS RECEIVED ON 12.02.2002 WHILE FOUR YEARS MENTIONED IN THE PROVISO EXPIRED ON 31.03.2003 ABOUT A YEAR AND A MONTH AFTER THE ISSUANCE OF NOTICE U/S 148. THEREFORE WHAT IS TO BE SEEN IS ONLY THAT WHETHER THE AO HA D REASON TO BELIEVE THAT THE INCOME ESCAPED ASSESSMENT. 5.5 THE THRUST OF THE ARGUMENTS OF THE LD. COUNSE L IS THAT SINCE ASSESSMENT WAS MADE U/S 143(3) AND ALL THE REL EVANT DETAILS HAD BEEN FILED AS MENTIONED IN THE ORIGINAL ASSESSMENT ORDER IT IS MERELY A CASE ITA NOS. 3556 3557 3616& 3617(DEL)/2004 24 OF CHANGE OF OPINION. IT IS ALSO HIS CASE THAT THE DVO WAS NOT COMPETENT TO MAKE VALUATION REPORT IN VIEW OF TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF AMIYA BALA PAUL (SU PRA). ON THE OTHER HAND THE THRUST OF THE ARGUMENT OF THE LD. DR IS THAT NO OPINION WAS FORMED IN THE ORIGINAL ASSESSMENT ABOUT THE EXPEN DITURE INCURRED ON LAND- DEVELOPMENT AND THEREFORE THERE IS NO QUESTION OF CHANGE OF OPINION. THE DVO WAS COMPETENT TO VALUE THE INVESTMEN T IN VIEW OF RETROSPECTIVE AMENDMENT IN THE ACT. 5.6 FINANCE (NO. 2) ACT 2004 INTRODUCED SECTION 142A IN THE INCOME-TAX ACT RETROSPECTIVELY W.E.F. 15.11.19 72. UNDER SUB-SECTION (1) OF THIS SECTION WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT IS REQUIRED TO BE MADE THE AO MAY REQUIRE THE VAL UATION OFFICER TO MAKE SUCH AN ESTIMATE AND REPORT THE SAME TO HIM. SUCH A REPORT MAY BE USED FOR MAKING AN ASSESSMENT OR A RE-ASSESSMEN T UNDER THE ACT. THE DECISION IN THE CASE OF AMIYA BALA PAUL (SUPRA) STANDS SUPERSEDED BY THIS RETROSPECTIVE AMENDMENT AS THE VALUATIO N OFFICER HAS NOW BEEN EMPOWERED TO MAKE VALUATION OF ANY INVESTMENT. THUS THIS ARGUMENT NO LONGER CARRIES ANY WEIGHT. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 25 5.7 THE FACTS OF THE CASE OF SATNAM OVERSEAS L TD. (SUPRA) ARE DISTINGUISHABLE AS THE OPINION OF THE DVO REG ARDING NON-RELIABILITY OF THE EXPENDITURE MENTIONED IN THE BOOKS OF ACCOUN T WAS NOT THERE BEFORE THE AO AT THE TIME OF MAKING ORIGINAL ASSESSMEN T. WE ARE ALSO OF THE VIEW THAT THE DECISION IN THE CASE OF KELVINAT OR OF INDIA LTD. (SUPRA) SUPPORTS THE CASE OF THE REVENUE IN AS MUCH A S TANGIBLE MATERIAL IN THE FORM OF THE REPORT OF THE DVO CAME INTO HIS PO SSESSION BEFORE RECORDING THE REASONS. THE DECISION IN THE CASE OF KAIR A DISTRICT COOPERATIVE MILK PRODUCERS UNION LTD. (SUPRA) IS NOT APPLICABLE T O THE FACTS OF THE CASE FOR THE REASON THAT THE NOTICE U/S 148 HAS BEEN ISS UED PRIOR TO EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR AND THEREFORE THE PROVISION CONTAINED IN THE PROVISO TO SECTION 147 IS NOT AP PLICABLE ON THE FACTS OF THE CASE. THE FACTS IN THE CASE OF PRASHANT JOS HI AND UPASANA HOSPITAL AND NURSING HOME ARE ALSO DISTINGUISHABLE. ON THE OTHER HAND WE FIND THAT THE FACTS OF THIS CASE COME CLOSER TO TH E FACTS OF THE CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA). IN THA T CASE THE HONBLE COURT CAME TO THE CONCLUSION THAT THERE IS NO QUESTION OF FORMATION OF OPINION AT THE TIME OF MAKING INTIMATION U/S 143(1)(A). IN THIS CASE THE AO MANIFESTLY DID NOT FORM ANY OPINION AS HE HA D NOT RECEIVED ANY REPORT FROM THE DVO. IT MAY BE ARGUED HERE ON BEHA LF OF THE ASSESSEE THAT IT ITA NOS. 3556 3557 3616& 3617(DEL)/2004 26 WAS THE DUTY OF THE AO TO OBTAIN THE REPORT WIT HIN THE LIMITATION PERIOD FOR MAKING ORIGINAL ASSESSMENT. HOWEVER THE ASSESSEE DID NOT COOPERATE WITH THE DVO OR THE AO AS IT DID NO T FURNISH TOPOGRAPHICAL DATA WHICH WAS ESSENTIAL FOR ESTIMATING THE CUBIC FEET OF EARTH REQUIRED FOR LAND-DEVELOPMENT. THEREFORE GIVING BENEFIT TO THE ASSESSEE ON THIS ACCOUNT WILL AMOUNT TO PLACING PREMIUM ON HIS NON-COMPLIANCE. IT MAY BE STATED HERE THAT THE ASSESSEE WAS IN POSSE SSION OF THE TOPOGRAPHICAL DETAILS AND YET SUCH DETAILS WERE NOT PRODUC ED EITHER BEFORE THE AO OR THE DVO TILL THE COMPLETION OF REGULAR ASSESS MENT. THEREFORE WE ARE OF THE VIEW THAT THE ISSUE STANDS COVERED BY T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF AFORESAID RAJESH JHAVERI. IN THE CASE OF SMT. SHASHI JAIN (SUPRA) THE JURISDICTIONAL HI GH COURT HELD THAT NOTICE U/S 148 CAN BE ISSUED ON THE BASIS OF VALUATIO N REPORT. THIS FURTHER STRENGTHENS THE CASE OF THE REVENUE REGARDING THE REOPENING OF THE ASSESSMENT. THE FACTS IN THE CASE OF SRI KRIS HNA PVT. LTD. (SUPRA) ARE COMPLETELY DIFFERENT AS THE AO HAD PROCEEDED TO REOPEN THE ASSESSMENT ON THE BASIS OF THE FINDINGS OF CUSTOMS AUTHORIT IES. THOSE FINDINGS WERE DEFINITE IN NATURE AND NOT TENTATIVE IN NATURE. IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. (SUPRA) IT WAS HELD THAT TH E CASE IS TO BE SEEN ONLY ON A PRIMA-FACIE BASIS THAT THERE EXISTS SOM E MATERIAL ON THE BASIS OF ITA NOS. 3556 3557 3616& 3617(DEL)/2004 27 WHICH REVENUE CAN REOPEN THE ASSESSMENT. THE REPORT OF THE DVO PROVIDES SUFFICIENT MATERIAL TO COME TO THE CONC LUSION ON A PRIMA-FACIE BASIS THAT INVESTMENT WAS NOT PROPERLY RECORDED . WE MAY ALSO REFER TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF EMA INDIA LTD. (SUPRA) IN WHICH IT WAS HELD THAT ASSESSMENT CAN BE REOPENED ON THE BASIS OF INFORMATION RECEIVED BY CONDUCTI NG RESEARCH OR ENQUIRY INTO THE MATERIAL ALREADY ON RECORD. IN THAT CASE IT WAS ALSO HELD THAT WHEN THERE IS SOME MATERIAL TO REOPEN THE ASSESSMENT THE ISSUE REGARDING CHANGE OF OPINION RECEDES INTO BACK GROUND AND THUS THE ASSESSMENT MAY BE REOPENED ON THE BASIS OF OTHER REASONS. IT IS THE CASE OF THE LD. COUNSEL THAT ALL THE INGREDIENTS OF SE CTION 147 ARE TO BE SATISFIED BEFORE REOPENING THE ASSESSMENT. HOWEVER IT IS A FACT ON RECORD THAT THE ASSESSMENT HAD BEEN REOPENED ON THE BASIS OF THE OPINION OF THE DVO WHICH CAME INTO THE POSSESSION OF THE AO AFTER COMPLETION OF ORIGINAL ASSESSMENT. THE ONLY PRE-CONDITION R EQUIRED TO BE SATISFIED IN THIS CASE IS WHETHER THE AO HAD REASON TO BELIEV E THAT THE INCOME ESCAPED ASSESSMENT. ON THE BASIS OF AFORESAID D ISCUSSION IT CAN BE SAFELY SAID THAT THERE WERE REASONS TO REOP EN THE ASSESSMENT IN REGARD TO ACCOUNTING FOR OF THE EXPENDITURE INCURRED ON LAND-DEVELOPMENT. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 28 ACCORDINGLY IT IS HELD THAT THE LD. CIT(APPEALS ) WAS RIGHT IN UPHOLDING THE VALIDITY OF NOTICE ISSUED U/S 148. 5.8 SINCE THE REOPENING OF THE ASSESSMENT HAS BEEN HELD TO BE VALID ON THE FIRST GROUND ITSELF IT IS NOT NECESSARY FOR US TO GO INTO OTHER GROUNDS MENTIONED IN THE REASONS FOR THIS PURPOSE . NONETHELESS IT MAY BE ADDED THAT NO ARGUMENT WAS MADE FROM EITHER S IDE IN RESPECT OF OTHER GROUNDS MENTIONED IN THE REASONS EXCEPT THAT THE LD. DR MERELY DREW OUR ATTENTION TO THOSE REASONS ALSO. 5.9 IN THE RESULT GROUND NO. 1 IS DISMISSED. 6. GROUND NO. 3 IS IN REGARD TO THE MERITS OF THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(APPEALS). I T IS MENTIONED THAT HE ERRED IN HOLDING THAT THE LAND-DEVELOPMENT EXPEN DITURE IN THIS YEAR AMOUNTED TO RS. 3 30 423/- BEING 10% OF THE AMOU NT OF RS. 33 04 232/- SHOWN IN THE BOOKS OF ACCOUNT. IT IS FURTHER M ENTIONED THAT HE ERRED IN NOT FOLLOWING THE VALUATION REPORT OF THE REGIST ERED VALUER AND THE DVO. IT IS ALSO MENTIONED THAT HE ERRED IN GIVING WEIGHTAGE TO THE OBSERVATION OF THE AO MADE AFTER VERIFICATION OF THE PAYMENT S TO OWNERS OF THE TRACTORS. ITA NOS. 3556 3557 3616& 3617(DEL)/2004 29 6.1 A NUMBER OF ARGUMENTS WERE MADE FROM BOTH THE SIDES REGARDING THE EXPENDITURE ENTERED IN THE BOOKS OF ACCOUN T. THE CASE OF THE LD. COUNSEL IS THAT THE EXPENDITURE STANDS CORROBO RATED BY THE REPORTS OF THE REGISTERED VALUER AND THE DVO. THEREFORE NO ADVERSE INFERENCE COULD BE DRAWN IN THIS MATTER. ON THE OTHER HAND T HE CASE OF THE LD. DR IS THAT THE EXPENDITURE WAS INFLATED AND SUBSTANT IAL MONEY WAS SIPHONED OFF BY THE DIRECTOR OF THE ASSESSEE-COMPANY. EN QUIRIES WERE MADE WITH THE OWNERS OF THE TRACTORS TO ARRIVE AT THE ACTUAL EXPENDITURE INCURRED ON LAND-DEVELOPMENT IN THIS YEAR AND SUBSEQUENT YEA R. THE ENQUIRIES CLEARLY SHOW THAT THE EXPENDITURE WAS NOT VERIFIABLE AT ALL AND IN MANY CASES THE TRACTOR-OWNERS DENIED HAVING RECEIVED ANY MONEY FROM THE ASSESSEE. WE FIND THAT THESE ARGUMENTS ARE OF ACADEMIC INTEREST ONLY IN SO FAR AS THE ASSESSMENT OF THIS YEAR IS CONC ERNED. THIS FOLLOWS FROM THE FINDINGS OF THE AO AND THE LD. CIT(A) REGA RDING THE ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE. 6.2 THE FINDING OF THE AO IS THAT THE EXPENDITURE OF RS. 33 04 232/- WAS NOT INCURRED FOR THE PURPOSE OF BUSINESS BUT THE MONEY WAS SIPHONED OFF BY THE DIRECTOR SHRI NIDHISH PRAKASH. THEREF ORE THE CLAIM OF INTEREST OF RS. 18 624/- CANNOT BE ALLOWED AS THIS EXP ENDITURE HAS NOT BEEN ITA NOS. 3556 3557 3616& 3617(DEL)/2004 30 INCURRED FOR THE PURPOSE OF BUSINESS. THE LD. CIT(A) CONSIDERED THE WHOLE MATTER AND MENTIONED THAT SOME EXPEND ITURE WOULD HAVE BEEN INCURRED ON LAND-DEVELOPMENT. HE ESTIMATED TH E EXPENDITURE AT 10% OF THE EXPENDITURE DEBITED IN THE BOOKS OF ACCOUN T. HAVING COME TO THIS CONCLUSION IT WAS ALSO MENTIONED THAT THE EX PENDITURE BY WAY OF INTEREST WAS NOT CLAIMED BY THE ASSESSEE IN COMP UTATION OF INCOME AS THE SAME WAS CONSIDERED AS PRE-OPERATIVE EXPENDITUR E. THEREFORE THIS ADDITION WAS DELETED. 6.3 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS A MATTER OF FACT ON RECORD THAT THE ASSESSEE HAS CONSIDERED INTEREST EXPENDITURE AS PRE-OPERATIVE EXPENDITURE. THEREFORE THIS AMOUNT HAS NOT BEEN DEBITED TO PROFIT AN D LOSS ACCOUNT. CONSEQUENTLY THIS AMOUNT HAS ALSO NOT BEEN CLAIM ED IN COMPUTING THE INCOME. THE ASSESSEE HAD FILED NIL RETURN AS THE COMPANY HAD NOT COMMENCED BUSINESS OPERATIONS IN THIS YEAR. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(APPEALS) IN THIS REGAR D. THEREFORE HIS ORDER DOES NOT REQUIRE ANY INTERFERENCE IN THE MATTER . THE ASSESSEE HAS ALSO NOT TAKEN ANY GROUND IN THIS BEHALF. HOWEVER THE ASSESSEE DESIRES TO GIVE A FINDING ON THE QUANTUM OF EXPENDITURE IN LAND-DEVELOPMENT. AS ITA NOS. 3556 3557 3616& 3617(DEL)/2004 31 MENTIONED EARLIER THIS QUESTION IS ONLY OF AC ADEMIC INTEREST. WE DO NOT FIND ANY REASON TO DECIDE THIS GROUND. THUS T HIS GROUND IS DISMISSED AS INFRUCTUOUS. 7. IN VIEW OF OUR FINDING IN RESPECT OF GROUND N O. 3 IT IS ALSO NOT NECESSARY FOR US TO DECIDE WHETHER THE AO ACTE D IN DEFIANCE OF THE DIRECTIONS OF THE ADDITIONAL COMMISSIONER OF INCOM E-TAX ISSUED U/S 144A OF THE ACT. THEREFORE GROUND NO. 2 TAKEN IN THIS BEHALF IS ALSO DISMISSED AS INFRUCTUOUS. ITA NO. 3557(DEL)/2004-A.Y. 1998-99- APPEAL OF THE REVENUE 8. THE ONLY GROUND TAKEN BY THE REVENUE IS IN REGARD TO THE FINDING OF THE LD. CIT(APPEALS) THAT THE ACTUAL EXPENDITU RE INCURRED ON LAND- DEVELOPMENT WAS 10% OF THE AMOUNT DEBITED IN THE BOOKS. IT IS MENTIONED THAT NO EVIDENCE WAS PRODUCED THAT THIS EXPENDITU RE WAS INCURRED ON LAND- DEVELOPMENT. IT IS FURTHER MENTIONED THAT EV EN AS PER ORDER OF THE LD. CIT(A) 90% OF THE EXPENDITURE WAS BOGUS AND THEREFORE HE OUGHT TO HAVE HELD THAT THIS AMOUNT WAS SIPHONED OFF BY S HRI NIDHISH PRAKASH AS HE WAS WHOLLY AND SOLELY IN CONTROL OF THE AFFAIRS OF THE COMPANY. 8.1 WE HAVE ALREADY HELD THAT THE DECISION I N THIS MATTER HAS NO IMPACT ON COMPUTATION OF THE ASSESSEE FOR THIS YEAR AND THEREFORE THE ITA NOS. 3556 3557 3616& 3617(DEL)/2004 32 ISSUE IS ONLY OF ACADEMIC INTEREST. THE REVENUE IS ALWAYS AT LIBERTY TO TAKE ANY ACTION IN THE CASE OF SHRI NIDHISH PRAKASH AS PER LAW. SINCE THAT CASE IS NOT THERE BEFORE US IT IS NOT NECESSARY FOR US TO GIVE ANY FINDING IN THIS MATTER. ITA NO. 3617(DEL)/2004-A.Y. 1999-00 APPEAL OF THE ASSESSEE ITA NO. 3556(DEL)/2004-A.Y. 1999-00 APPEAL OF THE REVENUE 9. IT IS THE COMMON CASE OF BOTH THE PARTIES THAT THE ISSUES IN THESE APPEALS ARE IDENTICAL WITH THE CROSS APPEALS FOR ASSESSMENT YEAR 1998- 99 (SUPRA). IN VIEW THEREOF THE ORDERS IN THOS E APPEALS ARE MADE APPLICABLE TO THIS YEAR ALSO. 10. IN THE RESULT ALL THE APPEALS ARE DISMISSED AS INDICATED ABOVE. 11. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 2ND JULY 2010. SD/- SD/- (R.P. TOLANI) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 2ND JULY 2010. SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. M/S TIKAULA SUGAR MILLS LTD. MUZAFFARNAGAR. 2. ASSTT. CIT CIRCLE-1 MUZAFFARNGAR. 3. CIT(A) 4. CIT 5. THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.