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TMI Blog2004 (10) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the decision of Hon'ble Calcutta High Court in the case of Grindlays Bank Ltd. In this case, the Hon'ble Calcutta High Court had quashed the enquiry notice issued under section 133(6) by the Assessing Officer on the basis of writ filed by the assessee. Therefore, it is clear that such an action on the part of the Assessing Officer can be challenged only through writ. The ld. A/R had submitted that the information was not called for with the prior approval of the Commissioner. We are of the opinion that even if the information is called for in contravention of the legal provisions, the material obtained thereby can still be used by the Department against the person concerned in the light of the decision of the Apex Court in the case of Pooran Mal v. Director of Inspection (Investigation) [1974] 93 ITR 505 and Dr. Pratap Singh v. Director of Enforcement [1985] 155 ITR 166. No such plea has been raised before the lower authorities. Therefore, this ground raised for the first time before us by the appellant is hereby dismissed. Disallowance of depreciation - In the case before us, depreciation of Rs. 9,840 for assessment year 1996-97 and Rs. 14,890 for assessment year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the excess claim of interest paid to Rajasthan Financial Corporation (RFC). The reasons recorded were disclosed to the appellant vide Assessing Officer's Office Letter No. 1591 dated 10-2-2003. The ld. CIT(A) had given the finding at Page-6 Para 3.3 of his order. The point regarding furnishing of the reasons was discussed with the ld. A/R by the ld. CIT(A) with reference to the reasons recorded-by the Assessing Officer and it was observed by the ld. CIT(A) that whatever reasons have been recorded, the escaped income in respect of those reasons have already been disclosed by the appellant. Therefore, having regard to the facts of the case, we are of the opinion that the reasons have properly been recorded and copies of reasons recorded had also been supplied to the assessee. Thus, we find that the order of the ld. CIT(A) is not laconic in any manner. The order of the CIT(A) is sustained for the reasons given therein. 5. Ground No. 1B, common in both the appeals, is regarding not quashing the reference made by the Assessing Officer under section 133(6) for calling for information. 6. According to section 133(6), the prescribed authority can call for any information from any perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not called for with the prior approval of the Commissioner. We are of the opinion that even if the information is called for in contravention of the legal provisions, the material obtained thereby can still be used by the Department against the person concerned in the light of the decision of the Apex Court in the case of Pooran Mal v. Director of Inspection (Investigation) [1974] 93 ITR 505 and Dr. Pratap Singh v. Director of Enforcement [1985] 155 ITR 166. No such plea has been raised before the lower authorities. Therefore, this ground raised for the first time before us by the appellant is hereby dismissed. 10. The Ground No. 2, common in both the appeals filed by the assessee, is regarding confirmation of disallowance of depreciation claimed through returns filed in response to notices under section 148. 11. The Assessing Officer had allowed the claim of depreciation at Rs. 9,840 instead of Rs. 1,09,840 for the assessment year 1996-97 and Rs. 14,890 instead of Rs. 7,89,023 for the assessment year 1997-98. In the original returns filed, the appellant had claimed depreciation at Rs. 9,840 for the assessment year 1996-97 and depreciation of Rs. 14,890 for the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (IT) had rightly placed reliance on the judgment of the Apex Court in the case of Chettinad Corpn. (P.) Ltd. wherein it was held that reopening an assessment could only be for the benefit of the Revenue and all items of disallowance or relief claimed by the assessee which are not relevant to the items which are the subject-matter of the enquiry during reassessment cannot be considered at the stage of reassessment. 15. The ld. A/R had placed reliance on the decision in the case of Mahendra Mills. From the perusal of the contention raised by the ld. A/R, it is evident that this judgment of the Apex Court helps the Revenue rather than helping the appellant. 16. In the case before us, depreciation of Rs. 9,840 for assessment year 1996-97 and Rs. 14,890 for assessment year 1997-98 was claimed in the original returns. However, in the returns filed under section 148 for reassessment of the escaped income, the appellant had claimed higher deduction of depreciation at Rs. 1,09,840 for the assessment year 1996-97 and at Rs. 7,89,023 for the assessment year 1997-98. For the reasons given above, we are of the opinion that the order of the CIT(A) is not laconic in any manner. The order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 494 (Cal.) (e) CWT v. D.R. Vadera [2000] 246 ITR 348 (Delhi) 24. The ld. D/R (IT) also contended that when the returns are processed under section 143(1)(a), it cannot be said that the matter has attained finality. For this purpose, he relied on the decisions in the case of Pradeep Kumar Har Saran Lal v. Assessing Officer [1998] 229 ITR 46 (All.) and Jorawar Singh Baid v. CIT [1992] 198 ITR 47 (Cal.). Ultimately, he submitted that the Assessing Officer can make even trading addition while making reassessment in pursuance of the notices issued under section 148 of the Income-tax Act. The ld. CIT(A) erred in deleting the additions, thus, made by the Assessing Officer. 25. The ld. A/R submitted that the declared trading results had been accepted by the Assessing Officer in the original assessment proceedings when the returns were processed in a summary manner under section 143(1)(a) of the Income-tax Act. No defects had been pointed out in the reasons recorded by the Assessing Officer. The reasons recorded were in respect of excess expenditure claimed on account of interest paid to the RFC and no reasons had been recorded under section 148 as to trading results. When the trading resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 have been initiated but also any other income chargeable to tax which may have escaped assessment and which comes to his knowledge subsequently in the course of such proceedings. 30. We do not agree with the contention of the ld. D/R that the whole of the assessment can be made de novo. The reassessment can be made only on the items mentioned above in this order. The ld. D/R had relied upon the decision of Hon'ble Apex Court in the case of Mewalal Dwarka Prasad where it was held that it was not for the High Court to examine the validity of the notice under section 148 in regard to two of the items of cash credits if it came to the conclusion that the notice was valid at least in respect of the remaining items. This does not help the Revenue. We are of the opinion that the ratio of the judgment in the case Sun Engineering Works (P.) Ltd would apply. This decision was delivered on September 17, 1992 whereas the decision in the case of Mewalal Dwarka Prasad was delivered by the Apex Court on February 10, 1989. Even otherwise the decision of later date could prevail while deciding the issue. The ld. D/R also placed reliance on the decision in the case of K.L. Srihari and submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3). The power that can be exercised under section 143(2) to correct the assessment made under section 143(1) does not exclude the power of the Assessing Officer to reopen the assessment under section 147 if the ingredients of section 147 are satisfied. 34. We find that the matter regarding trading results had attained finality when the Assessing Officer could not issue notice under section 143(2) for scrutiny of return filed within the stipulated period. When the stipulated period for issue of notice under section 143(2) had already expired, the matter has attained finality as held in the cases of Vipan Khanna and M.P. Iron Traders. 35. After appraisal of the facts of the case, we find that the matter regarding declaration of trading results had attained finality when the period for issue of notices under section 142 had already expired. Therefore, the Assessing Officer was not justified in making trading additions for both the years. Thus, we are of the opinion that the order of the ld. CIT(A) is not laconic in any manner. Therefore, we decline to interfere with his order. 36. In the result, the appeals filed by the assessee for both the years are dismissed and the appeals filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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