9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 1604 - AT - Income TaxReopening of assessment - computing deductions u/s 80IC - Held that - The issue of computing deduction u/s 80IC qua inclusion of other income such as rent, surplus on sale of assets, sale of scraps , insurance claims, provisions no longer required etc to the tune of ₹ 9,56,18,376/- was subject matter of appeal before learned CIT(A) and is hit by the second proviso to Section 147 which could not have been re-opened by the AO u/s 147 as the assessment order stood merged with the appellate order of learned CIT(A), but to say that learned CIT(A) is seized of the matter w.r.t. determining the controversy as to the inclusion of export benefits to the tune of ₹ 2,36,32,653/- for computing eligible profits derived from the industrial undertaking for computing deduction u/s 80IC is fallacious and to contend that the assessment order originally framed u/s 143(3) cannot be now subject to re-assessment proceedings u/s 147 despite the income having escaped assessment in light of Hon‟ble Supreme Court decision in the case of Liberty India Limited (2009 (8) TMI 63 - SUPREME COURT) is not acceptable and is hereby rejected as learned CIT(A) was never seized of this controversy. Thus, we uphold re-assessment order passed by the AO u/s 147 - Decided in favour of revenue.
Issues Involved:
1. Validity of reopening the assessment under Section 147. 2. Inclusion of export incentives in the computation of profits eligible for deduction under Section 80IC. Detailed Analysis: 1. Validity of Reopening the Assessment under Section 147: The core issue was whether the reopening of the assessment under Section 147 was justified. The Revenue contended that the reopening was valid as the assessee's claim of deduction under Section 80IC, which included export incentives, was contrary to the Supreme Court’s decision in Liberty India Ltd. The assessee argued that the reopening was merely a change of opinion by the AO, which is not permissible under law, and that no new tangible material had come into possession of the AO to justify the reopening. The tribunal held that the reopening was valid as the original assessment allowed the inclusion of export incentives for computing eligible profits under Section 80IC, which was contrary to the Supreme Court’s decision in Liberty India Ltd. The tribunal emphasized that any opinion formed contrary to the Supreme Court’s decision is non-est and bad in law, and thus, the reopening of the assessment was justified. 2. Inclusion of Export Incentives in the Computation of Profits Eligible for Deduction under Section 80IC: The dispute revolved around whether export incentives could be included in the computation of profits eligible for deduction under Section 80IC. The AO had originally allowed the inclusion of export incentives, but later reopened the assessment, disallowing these incentives based on the Supreme Court’s decision in Liberty India Ltd., which held that such incentives do not have a direct nexus with the profits derived from the industrial undertaking. The tribunal upheld the AO’s decision, stating that the Supreme Court’s ruling in Liberty India Ltd. is binding and that export incentives cannot be included in the computation of profits eligible for deduction under Section 80IC. The tribunal noted that the inclusion of export incentives was an ex-facie wrong claim and any opinion formed contrary to the Supreme Court’s decision is non-est and bad in law. The tribunal also addressed the assessee’s contention that the original assessment order had merged with the appellate order of the CIT(A) and thus could not be reopened. The tribunal rejected this argument, stating that the CIT(A) was not seized of the matter regarding the inclusion of export benefits for computing eligible profits under Section 80IC. Conclusion: The tribunal allowed the Revenue’s appeal, holding that the reopening of the assessment under Section 147 was valid and that export incentives could not be included in the computation of profits eligible for deduction under Section 80IC. The appellate order of the CIT(A) was set aside, and the reassessment order passed by the AO was upheld both on merits and on the legal ground concerning the validity of the reopening.
|
