9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 617 - AT - Income TaxReopening of assessment - assessment was reopened for assessment years 2001-02 to 2004-05 on the basis of the ADIT and DDIT report in which it has been stated that there are cash deposits in the bank accounts of the assessee - Held that - Having relied upon the said report, the assessment was reopened under section 147 of the Act after issuance of notice under section 148 of the Act which was responded by the assessee. In assessment years 2000-01 to 2002-03, where the reopening was done on the same facts, the Tribunal has held the reopening to be bad and invalid and quashed the assessment framed consequent thereto. Therefore, in the impugned assessment year, we do not find any justification to take a contrary view. So far as the applicability of principle of res-judicata in Income-tax proceedings are concerned, we agree with the finding of the ld. CIT(A) that principle of res-judicata are not applicable in the Income-tax proceedings and every assessment year is independent assessment year, but it has been repeatedly held through various judicial pronouncements that rule of consistency must invariably be followed in Income-tax proceedings. If a particular view is taken in one assessment year, the same should be followed in other assessment year or succeeding assessment year unless and until contrary facts are brought on record. The order of the Tribunal in the immediately preceding years, where the reopening made on the same facts under section 147 of the Act was held to be invalid by the Tribunal repeatedly in three assessment years, should be followed in the instant assessment year. We accordingly, following the said order of the Tribunal, hold that the reopening of assessment is bad and accordingly the assessment framed consequent thereto deserves to be quashed. Accordingly we annul the assessments for assessment years 2003-04 and 2004-05 framed consequent to the bad reopening. Since the assessment is annulled, we find no justification to decide the issues on merit. - Decided in favour of assessee. Addition on account of cash deposit in different bank accounts of the assessee - Held that - Assessing Officer has made addition of the cash deposits in the bank accounts of the assessee having placed strong reliance upon the statement of Shri. Mukesh Rajani, Auditor of the assessee-company who deposed that the books of account of the company were produced before him in the form of computer printout. But this statement was never confronted to the assessee nor the assessee was allowed to cross-examine the same. Therefore, the statement of Shri. Mukesh Rajani cannot be relied on for making the addition. But the assessee has also not produced the details of the persons/debtors from whom he received cash for its deposits in the bank. From the totality of the facts and circumstances of the case, we are of the view that this issue was not properly examined by the lower authorities. Before us the assessee has also furnished the details of various persons from who cash was received, but it requires a proper verification by the Assessing Officer. In the light of these facts, we are of the view that this issue requires a fresh adjudication by the Assessing Officer and we accordingly set aside the order of the ld. CIT(A) and restore the matter to the file of the Assessing Officer with a direction to re-adjudicate the issue after affording an opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. Disallowance of expenditure incurred on deposit of earnest money with the Bombay Stock Exchange - CIT(A) deleted disallowance - Held that - The assessee has taken the decision in the interest of business to allow Bombay Stock Exchange to forfeit its earnest money, as the assessee was not in a position to deposit the balance amount in the interest of business. In any case, the assessee has suffered a loss of ₹ 5 lakhs and the same should be allowed as revenue expenditure. Since we do not find any infirmity in the order of the ld. CIT(A), we confirm his order on this issue.- Decided in favour of assessee. Addition on account of advance as on 31.3.2006 and debited in the profit and loss account during the year - CIT(A) deleted addition - Held that - The liability was crystalised in the impugned assessment year therefore, the assessee has rightly debited the said amount in the profit and loss account and there is no infirmity therein. Having agreed with the order of the ld. CIT(A), we confirm the same. Accordingly the appeal of the Revenue is dismissed. - Decided in favour of assessee.
Issues Involved:
1. Validity of reopening of assessment under Section 147 of the Income-tax Act, 1961. 2. Addition of Rs. 1,58,72,000/- on account of cash deposits in different bank accounts for assessment year 2007-08. 3. Deletion of addition of Rs. 5 lakhs on account of disallowance of expenditure incurred on deposit of earnest money with the Bombay Stock Exchange. 4. Deletion of addition of Rs. 15.40 lakhs made by the Assessing Officer on account of its appearance in the balance sheet as advance as on 31.3.2006 and debited in the profit and loss account during the year. Detailed Analysis: 1. Validity of Reopening of Assessment under Section 147: The assessee challenged the validity of reopening of assessment for the years 2003-04 and 2004-05. The reopening was based on information received from the DDIT (Investigation)-II, Kanpur, indicating unexplained cash deposits in the assessee's bank accounts. The Tribunal noted that similar reopening for assessment years 2000-01, 2001-02, and 2002-03 was held invalid by the Tribunal, as it was based solely on the directions of the ADIT (Investigation) without independent application of mind by the Assessing Officer. The Tribunal reiterated that reopening based on suspicion or for making roving enquiries is not valid. Consequently, the assessments for 2003-04 and 2004-05 were annulled. 2. Addition of Rs. 1,58,72,000/- on Account of Cash Deposits: For assessment year 2007-08, the assessee appealed against the addition of Rs. 1,58,72,000/- made by the Assessing Officer due to cash deposits in different bank accounts. The assessee claimed that the books of account were destroyed by an employee, supported by FIRs lodged with the police. The Tribunal found that the Assessing Officer relied on the statement of the Auditor, who stated that the books were audited from computer printouts. However, the statement was not confronted to the assessee, and no cross-examination was allowed. The Tribunal directed the Assessing Officer to re-adjudicate the issue, allowing the assessee to produce relevant evidence to justify the cash deposits. 3. Deletion of Addition of Rs. 5 Lakhs on Account of Earnest Money: The Revenue challenged the deletion of Rs. 5 lakhs by the CIT(A), which was disallowed by the Assessing Officer as capital expenditure. The assessee argued that the forfeiture of earnest money deposited with the Bombay Stock Exchange was a business expenditure incurred for trading rights, which was in line with its business objectives. The CIT(A) accepted this argument, considering it a business expenditure incurred on account of business expediency. The Tribunal upheld the CIT(A)'s decision, finding no infirmity in treating the forfeiture as a revenue expenditure. 4. Deletion of Addition of Rs. 15.40 Lakhs: The Revenue also contested the deletion of Rs. 15.40 lakhs, which was added by the Assessing Officer as prior period expenses. The assessee explained that the amount was deposited as rent under protest due to ongoing litigation, which was decided against the assessee in the impugned year, crystallizing the liability. The CIT(A) agreed with the assessee, noting that the liability crystallized during the year due to the court's decision. The Tribunal confirmed the CIT(A)'s order, agreeing that the liability was correctly debited in the profit and loss account for the relevant year. Conclusion: The Tribunal allowed the assessee's appeals for assessment years 2003-04 and 2004-05, annulled the assessments due to invalid reopening, and remanded the issue of Rs. 1,58,72,000/- cash deposits for fresh adjudication. The Revenue's appeal was dismissed, upholding the deletion of Rs. 5 lakhs and Rs. 15.40 lakhs by the CIT(A).
|
