DCIT, New Delhi v. M/s. Bharat Seats Ltd, New Delhi

ITA 4613/DEL/2009 | 2001-2002
Pronouncement Date: 09-07-2010 | Result: Dismissed

Appeal Details

RSA Number 461320114 RSA 2009
Bench Delhi
Appeal Number ITA 4613/DEL/2009
Duration Of Justice 7 month(s) 2 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Bharat Seats Ltd, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 09-07-2010
Date Of Final Hearing 29-06-2010
Next Hearing Date 29-06-2010
Assessment Year 2001-2002
Appeal Filed On 07-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMEBR AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A NO. 4613/DEL/09 ASSTT. YEAR 2001-02 DCIT CIRCLE 2 (1) ROOM NO. 398D 3 RD FLOOR C.R. BUILDING NEW DELHI. VS. M/S. BHARAT SEATS LTD. D-188 OKHLA INDL. AREA PHASE-1 NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: MS. PRATIMA KAUSHIK SR. DR RESPONDENT BY: SHRI PRADEEP DINODIA / SHRI R.K. KAP OOR CA ORDER PER RAJPAL YADAV JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LD. CIT(A) DATED 29 TH SEPTEMBER 2009 PASSED FOR ASSTT. YEAR 2001-02. TH E SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAS ER RED IN HOLDING THE REASSESSMENT ORDER AS INVALID. THE BRIEF FACTS OF T HE CASE ARE THAT ASSESSEE COMPANY WAS INCORPORATED IN 1986 WITH THE MAIN OBJECT OF ITA NOS. 4613/DEL/09 ASSTT. YEAR 2001-02 2 MANUFACTURING COMPLETE SEAT ASSEMBLY FOR AUTOMOBILE S. IT HAS FILED ITS RETURN OF INCOME ON 30 TH OCTOBER 2001 DECLARING AN INCOME OF RS. 1 86 37 609/-. AN ASSESSMENT U/S 143(3) WAS PASSED ON 7 TH AUGUST 2003 WHEREBY TOTAL TAXABLE INCOME OF THE ASSESSEE W AS DETERMINED AT RS. 2 84 38 142/-. THE AO SOUGHT TO REOPEN THE ASSE SSMENT BY ISSUANCE OF A NOTICE U/S 148 ON 13 TH MARCH 2008. ACCORDING TO THE AO ASSESSEE HAD MADE ADVANCE PAYMENT OF RS.2 27 11 730 /- TO HSIDC FOR THE PURCHASE OF LAND. THIS PAYMENT WAS APPEARING IN THE BALANCE SHEET UNDER LOAN AND ADVANCE AS THE LAND WAS NEVER ACQUIR ED BY THE COMPANY. THIS SUM WAS NOT CAPITALIZED. SINCE THE PL AN OF EXPLANATION OF THE COMPANY DID NOT MATERIALIZED FOR WHICH THESE PA YMENTS WERE MADE THE ADVANCE PAID FOR PURCHASE OF LAND WAS REFUNDED BY THE HSIDC AFTER DEDUCTION OF 10% OF THE PAYMENT MADE TO IT. THIS 10 % I.E. RS. 22 71 173/- OF THE TOTAL PAYMENT OF RS. 2 27 11 730 /- WAS CLAIMED BY THE ASSESSEE AS A DEDUCTION WHEREAS ACCORDING TO THE AO THE ADVANCE PAYMENT WAS MADE TO ACQUIRE A CAPITAL ASSET ANY LO SS ARISING THEREOF SHOULD HAVE BEEN TREATED AS A CAPITAL LOSS. ON THE BASIS OF ABOVE BELIEF AO ARRIVED AT A CONCLUSION THAT INCOME HAS ESCAPED ASSESSMENT AND HE ISSUED A NOTICE U/S 148 OF THE INCOME TAX ACT. THE AO AFTER HEARING THE ASSESSEE FRAMED THE REASSESSMENT ORDER ON 19.12.200 8 WHEREBY HE ITA NOS. 4613/DEL/09 ASSTT. YEAR 2001-02 3 DISALLOWED A SUM OF RS. 24 55 364/-. HE DETERMINED THE TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS. 3 08 93 506/-. 2. DISSATISFIED WITH THE ACTION OF AO ASSESSEE CAR RIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). IT POINTED OUT THAT I N THE ORIGINAL ASSESSMENT PROCEEDING AO HAS DULY RAISED QUERY ABOU T THIS RECEIPT AND ASSESSEE HAS SUBMITTED AN EXPLANATION ON THE AMOUNT OF WRITTEN OFF. A NOTE SUBMITTED BY THE ASSESSEE DURING THE ORIGINAL ASSESSMENT PROCEEDING HAS DULY BEEN PRODUCED BY THE LD. CIT(A) WHICH READ AS UNDER :- AMOUNT WRITTEN OFF : THE COMPANY PURCHASED LAND FROM HSIDC AT IMT MANES AR FOR RS. 2 27 11 730/-. AFTER A CERTAIN PERIOD OF TIME HSIDC INSISTED FOR CONSTRUCTION OF THE SAME OTHERWISE PENALTIES WILL B E LEVIED ON OUR COMPANY. DUE TO RECESSIONARY AUTOMOBILE CONDITIONS COMPANY COULD NOT GO AHEAD WITH THE CONSTRUCTION PLANS AND DECIDED TO SURRENDER A LAND. DESCRIBE SEVERAL REQUESTS HSIDC D ECIDED TO DEDUCT 10% OF THE AMOUNT GIVEN TO THEM. THEREFORE R S. 24 55 364/- PERTAINS TO 10% OF THE TOTAL AMOUNT FOR THE SURRENDER OF LAND. 3. LD. CIT(A) HAS QUASHED THE ASSTT. ORDER ON THE G ROUND THAT NOTICE U/S 148 HAS BEEN ISSUED TO THE ASSESSEE AFTER EXPIR Y OF 4 YEARS. THE ORIGINAL ASSESSMENT IN THIS CASE WAS MADE U/S 143(3 ). ACCORDING TO THE LD. CIT(A) THE BENEFIT OF PROVISO APPENDED TO SECTI ON 147 IS AVAILABLE TO THE ASSESSEE. THIS ASSESSMENT CAN BE REOPENED ONLY IF IT IS ESTABLISHED ITA NOS. 4613/DEL/09 ASSTT. YEAR 2001-02 4 ON THE RECORD THAT ASSESSEE FAILED TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY. THERE IS NO SUCH CHARGE AGAINST THE ASSESSEE LEVELED AND ESTABLISHED BY THE AO BEFORE REOPENING THE ASSESSME NT. IN THIS WAY LD. CIT(A) HAS QUASHED THE REASSESSMENT ORDER. 4. BEFORE US LD. DR RELIED UPON THE ORDER OF AO. SH E POINTED OUT THAT EXCESSIVE RELIEF HAS BEEN ALLOWED TO THE ASSESSEE IN THE ORIGINAL ASSESSMENT. THEREFORE THE CASE OF THE ASSESSEE FALL S WITHIN SUB CLAUSE 3 OF EXPLANATION 2 (C) APPENDED TO SECTION 147 OF T HE ACT. LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND SUBMITTED THAT L D. CIT(A) HAS DISCUSSED THIS ISSUE ELABORATELY AND CONSIDERED THE FULL BENCH DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. 256 ITR 1 AND JINDAL PHOTO FILMS LTD. VS. DY. CIT 234 ITR 170. HE RELIED UPON THE ORDER OF THE LD. CIT(A). 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. ADMITTEDLY ORIGINAL ASSESSMEN T WAS MADE U/S 143(3) IN THIS CASE. FOUR YEARS HAVE BEEN EXPIRED F ROM THE END OF THE RELEVANT ASSESSMENT YEAR WHEN NOTICE U/S 148 WAS IS SUED AND SERVED UPON THE ASSESSEE SECTION 147 OF THE INCOME TAX AC T PROVIDES THAT IF THE AO HAS REASON TO BELIEVE THAT ANY INCOME CHARGE ABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR HE MAY SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 ASSESS OR REASS ESS SUCH INCOME ITA NOS. 4613/DEL/09 ASSTT. YEAR 2001-02 5 MEANING THEREBY IF THE AO HAS REASONS TO BELIEVE T HAT ANY INCOME HAS ESCAPED ASSESSMENT THEN HE WILL ISSUE NOTICE U/S 1 48 FOR REOPENING OF THE ASSESSMENT. THE INTERDICTION PROVIDED IN THE PR OVISO APPENDED TO THIS SECTION PUT AN EMBARGO UPON THE POWER OF AO FO R REOPENING OF ASSESSMENT UNDER THIS SECTION IF AN ASSESSMENT U/ S 143(3) WAS MADE ORIGINALLY AND 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR HAS EXPIRED THEN AO CANNOT REOPEN THE ASSESSMENT UNLES S IT IS ESTABLISHED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PAR T OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT IN THAT ASSESSMENT YEAR. IF WE SEE THE IMPACT OF THIS PROVISO IN THE PRESENT CASE THEN IT WILL REVEAL THAT ASSESSEE HAS FILED TH E RETURN U/S 139 A REGULAR ASSESSMENT U/S 143(3) HAS BEEN PASSED . ITS ASSESSMENT CAN ONLY BE REOPENED IF IT IS ESTABLISHED THAT INCOME E SCAPED TO TAX FOR THE FAILURE OF ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT FOR THAT ASSTT. YEAR. FROM READI NG OF THE REASONS REPRODUCED IN THE LD. CIT(A)S ORDER THERE IS NO SU CH ALLEGATION BY THE AO NOR HE HAS ESTABLISHED EITHER IN THE REASSESSMEN T ORDER OR IN THE REASONS THAT ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELEVANT FOR THIS ASSTT. YEAR ON THE OTHER HAND IT IS THE CONTENTION OF ASSESSEE THAT IN THE ORIGINAL ASSESSMENT PROCEEDING AO HAS RAISED A ITA NOS. 4613/DEL/09 ASSTT. YEAR 2001-02 6 QUERY AND ASSESSEE REPLIED THAT QUERY. LD. CIT(A) H AS ACCEPTED THIS PLEA OF THE ASSESSEE AND NOTHING WAS POINTED OUT BY THE LD. DR CONTRARY TO THE ABOVE FINDING OF THE LD. CIT(A). CO NSIDERING ALL THESE ASPECTS WE DO NOT FIND ANY ERROR IN THE ORDER OF LD . CIT(A) 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED .. ORDER PRONOUNCED IN THE OPEN COURT ON 9.7.2010. SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER VEENA DATED: 9.7.2010 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT