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TMI Blog2006 (6) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... eassessment proceedings were completed on 11th March, 2002 at total income of Rs. 1,81,29,160. 2.2 Aggrieved by this order, the assessee moved an appeal before the CIT(A)-I, Pune. One of the grounds taken before him was that initiation of proceedings under s. 148 was bad in law in terms of proviso to s. 147. In the course of hearing before him it was pointed out that the notice under s. 148 was issued on 12th March, 2001, after lapse of four years from the end of the relevant assessment year. The learned CIT(A). pointed out that the said notice was issued after obtaining approval of the CIT, Nashik, in accordance with the provisions of s. 151 of the Act. The AO had recorded reasons on 7th March, 2001, which are also on record. The learned CIT(A) also referred to the letter of the assessee filed in response to the notice under s. 148, in which it was inter alia informed that the return of income was filed on 29th Nov., 1995 in the prescribed form and according to the assessee's view no income had escaped assessment. Thereafter, it was mentioned that the original return may be treated as a return filed under s. 148 of the Act. The assessee had also placed reliance on the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these expenses have been partly debited to P L a/c. The remaining amount has been claimed while computing the income of this year. It is also mentioned that the computation of the assessee in this regard is accepted, Le., over and above a sum of Rs. 10,70,800 debited to P L a/c, a further sum of Rs. 45.36 lakh is allowed as deduction in computation of income. Thus, it was the case of the learned counsel that since all the details necessary for computation of income had been furnished in original assessment proceedings, the reopening of the assessment was bad. 3.3 In this connection, he relied on a number of decisions, which may be summarized below: 1. Chandan Metal Products (P) Ltd. vs. Dy. CIT (2002) 76 TTJ (Pune) 201 : (2002) 81 ITD 366 (Pune); 2. Asstt. CIT vs. Gujarat Flurochemicals (2006) 6 SOT 264 (Ahd); 3. Caprihans India Ltd. vs. Tarun Seem, Dy. CIT (2003) 185 CTR (Bom) 157 : (2004) 266 ITR 566 (Bom); 4. ICICI Bank Ltd. vs. K.J. Rao, Dy. CIT (2004) 188 CTR (Bom) 380 : (2004) 268 ITR 203 (Bom). 3.4 As against the foresaid, the case of the learned Departmental Representative was that as per various decisions of Hon'ble Supreme Court including in the case of Brook ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0HHC. As the order of assessment has been set aside on the ground of lack of jurisdiction under s. 148, we do not think it necessary to go into these grounds and give a finding on them on merits. 6. In result, the appeal of the assessee is allowed. ITA No. 504/Pune/2003 for asst. yr. 1996-97 7.1 The assessee had filed return of income on 27th Nov., 1996 disclosing total income of Rs. 94,06,186. The assessment was completed at total income of Rs. 1,04,77,580 on 22nd March, 2002. The assessee had claimed deduction under s. 80HHC. While considering the aforesaid claim, the AO inter alia dealt with processing charges amounting to Rs. 8,44,104. It was pointed out that the company had done job work as well as engineering processing work for third parties. This activity is connected with production activities of the assessee. Therefore, it was pointed out that such processing charges should be included in total turnover for the purpose of computing the aforesaid deduction. 7.2 Aggrieved by the order, the assessee moved an appeal to the CIT(A). The claim of the assessee was that for quite sometime it had been having spare capacity, which was used for processing third party goods, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oing job work apart from undertaking exports and the receipts from the job work amounted to Rs. 66,35,083. The AO relied on cl. (baa) of the Explanation and held that such amount did not form part of the total turnover. The learned CIT(A) took the view that processing of goods was part of the business activity of the assessee and receipts from job work was included in the total turnover. Therefore, the assessee was entitled to include the whole of the profit in the profits of business. The Tribunal held that job work charges were not in the nature of brokerage, commission, rent or interest and, therefore, 90 per cent of such charges could not have been excluded from the profits of business. The Hon'ble Bombay High Court pointed out that the provision of aforesaid cl. (baa) cannot be invoked in every matter involving receipt by way of brokerage, commission, etc. It has to be seen whether the receipts accrued to the assessee by way of operating income. If it is so, then, the provisions of aforesaid clause are not applicable. In view of the finding that job work was integrally connected with the manufacturing activity of the assessee, the receipts therefrom were held to be operating i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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