9911796707
TMI Blog2010 (8) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... that communication expenses debited by the assessee is not an ascertained liability rather it is contingent one which does not deserve to be allowed in this year. Subsequently, the assessee has raised an additional ground of appeal wherein it has challenged the reopening of assessment by issuance of a notice under section 148 of the IT Act, 1961. According to the learned counsel for the assessee, no investigation of fresh facts is required for adjudicating this issue because all necessary facts are already on record. Learned Departmental Representative though opposed the prayer of the assessee but was unable to controvert whether any fresh investigation of facts would be required or not. After going through the material on record, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment by issuing a notice under section 148 of the Act. According to the AO, the assessee had claimed provision of communication expenses of Rs. 43,48,141 on the basis of management's estimate pending finalization of the agreement. This item was thus a provision and not an ascertained liability, therefore, it was not allowable to the assessee. In the opinion of the AO, the income to this extent has escaped assessment, therefore, the assessment deserves to be reopened and a fresh assessment under section 147 read with section 143(3) is required to be made. He issued a notice under s. 148 on 29th March, 2007. After hearing the assessee, he passed the reassessment order on 29th June, 2007 and disallowed the claim of assessee. 3. Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of assessment proceedings, the AO has specifically asked a question. He took us through page No. 3 wherein copy of the questionnaire issued by the AO vide letter dt. 14th Feb., 2005 is available. At serial No. 4 of this questionnaire, the query of AO reads as under : "4. In addition to other business expenses debited in P&L a/c file details with evidence in respect of communication expenses and rent amounting to Rs. 1.66 crores and Rs. 1.70 crores respectively." 6. The assessee had replied this questionnaire vide its letter dt. 28th Feb., 2005. It has enclosed the details of communication expenses. Such details have been placed in the paper book at page Nos. 12 to 37. The assessee has also filed copies of certain invoices in order to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi)(FB); and 3. Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1 (SC). 8. Learned Departmental Representative on the other hand submitted that for reopening of an assessment, two conditions are to be satisfied in the present case i.e., whether assessee has disclosed all its facts truly and fully. Referring to Explanation 1, appended with section 147, he submitted that production of books of account before the AO or other evidence from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure. He pointed out that assessee failed to disclose all the material facts fully and truly. The assessee has not submitted any bills rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the record carefully. The learned counsel for the assessee has pointed out that the issue regarding communication expenses was duly considered by the AO in a scrutiny assessment made under section 143(3) of the Act. AO did not possess any fresh material for giving rise to any reason to believe that the income has escaped assessment. He has reopened the assessment only by reappreciating the material already available. On an analysis of the record, we do find merit in this contention. The assessee has demonstrated that all these aspects have been considered by the AO in the original assessment order though a specific finding is not discernible. We have already noticed the specific query raised by the assessee. The reply given by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been upheld by the Hon'ble Supreme Court also. On a detailed analysis of all the facts and circumstances, we are of the opinion that there was no new information or material which came to the notice of the AO which can authorize him to form an opinion that income has escaped assessment. As far as the case laws relied upon by the learned Departmental Representative in the case of Consolidated Photo & Finvest Ltd. (supra) is concerned, it is distinguishable on facts. On due consideration of the facts and circumstances in the light of Hon'ble Delhi High Court's decisions in the cases of Jal Hotels (supra) and Kelvinator of India Ltd. (supra), we find merit in the contentions of the assessee and quash the assessment order. 10. As fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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