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TMI Blog2014 (7) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue for the assessment year 2005-06 and remaining two appeals are filed by the assessee for assessment years 2006-07 2007-08. For the sake of convenience, all these appeals were heard together and are being disposed of by way of this common order. 2. First we take up the appeal of the assessee for assessment year 2005- 06 in I.T.A. No.357/Lkw/2011. Ground No. 1 to 4 are regarding validity of reopening and these grounds are as under: 1. Because the re-assessment framed u/s 147/143(3) of the Act is contrary to facts, bad in law, without jurisdiction and be quashed. 2. Because there being no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, the re-assessment proceedings are void ab initio. 3. Because the 'deemed' return filed pursuant to Notice u/s.147 being belated the CIT(A) has erred on fact and in law in upholding the reassessment framed u/s. 147/143(3), the reassessment framed is void abinito and be quashed. 4. Because the CIT(A) has wrongly interpreted the grounds of appeal regarding 263 and reopening u/s.147 (both being independent) and has arbitrarily held that the appellant himself has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted position of fact that the original assessment was completed by the Assessing Officer u/s 143(1) of the Act and not u/s 143 (3) of the Act. In the light of this fact, we examine the applicability of various judgments cited by Learned A.R. of the assessee. 5.1 The first judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Gujarat High Court rendered in the case of Ratna Trayi Reality Services Pvt. Ltd. (supra). In this case, it was held that tangible material to show escapement of income is must. In the present case, it is admitted position that the income has escaped assessment because the deduction claimed by the assessee u/s 80IB in the return of income is not allowable to the assessee and therefore, escapement of income is there and reopening is made by the Assessing Officer after recording valid reasons and hence, the assessee does not get any help from this judgment. 5.2 The second judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Delhi High Court rendered in the case of Orient Craft Ltd. (supra). In this case, the facts are that return of income was filed by the assessee claiming deduction u/s 80HHC and 10B of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the Tribunal that where the reasons recorded by the Assessing Officer did not indicate any material on the basis of which it would be said that there was escapement of income, proceeding u/s 147 could not be resorted to for making roving enquiries or making investigation. In that case, the reasons recorded by the Assessing Officer indicated that the Assessing Officer has reasons to belief that there was escapement of income and the Assessing Officer only wanted to make investigations into the claim of the assessee regarding some expenses as well as donation and under these facts, it was held that initiation of proceedings u/s 147 was bad in law. In the present case, the facts are different. In the present case, there was concrete basis being the scrutiny assessment for assessment year 2004-05 on the basis of which the Assessing Officer came to the conclusion that there was escapement of income and the purpose was not to make roving enquiry and therefore, this Tribunal decision is not relevant in the facts of the present case. 5.5 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Bombay High Court rendered in the case of Balkrishna H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rutiny assessment for assessment year 2004-05 and therefore, this Tribunal decision is also not rendering any help to the assessee. 5.9 The next judgment cited by Learned A.R. of the assessee is the Tribunal decision in the case of Telco Dadajee Dhackjee Ltd. (supra). This Tribunal decision is not at all relevant because in this case, it was held that the decision of Third Member is not a final order disposing of final appeal as contemplated by 254(1) and it is difficult to appreciate how an application would lie u/s 254(2) against his decision and on this basis, the Misc. Application filed by the Revenue was held to be not maintainable. Reliance has been placed by Learned A.R. of the assessee on this decision on total misunderstanding of the ratio of this decision. 5.10 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Bombay High Court rendered in the case of Prashant S. Joshi Dattaram Shridhar Bhosale (supra). In this case, it was held by Hon'ble Bombay High Court that the reasons recorded by Assessing Officer for reopening could not be supplemented by affidavit. It is noted that payment made to a partner in realization of his sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -gratia hence cannot be excluded for purposes of deduction u/s.80IB. 7. Regarding merit of the issue involved, it was fairly conceded by Learned A.R. of the assessee that the issue is covered against the assessee by the judgment of Hon'ble Apex Court rendered in the case of Liberty India Vs Commissioner of Income-tax as reported in [2009] 317 ITR 218 (SC). Respectfully following this judgment of Hon'ble Apex Court, we do not find any reason to interfere in the order of CIT(A). These grounds are rejected. 8. In the result, the appeal of the assessee stands dismissed. 9. Now we take up the appeal of the Revenue for assessment year 2005- 06 i.e. I.T.A. No.260/Lkw/2011. The Revenue has raised the following grounds: 1. The Ld. Commissioner of Income Tax (Appeals)-I, Kanpur has erred in law and on facts in directing to deduct total interest of ₹ 15,92,727/- paid to bank from Jajmau Unit in place of ₹ 7,66,170/- from Jajmau Unit and ₹ 8,26,557/ in Banthar Unit as reallocated by the Assessing Officer without appreciating the facts brought on record by the Assessing Officer during the course of assessment proceedings. 2. The Ld. Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. 2. Because the CIT (A) has erred on facts and in law in arbitrarily holding that the assessee appellant is not entitled to deduction u/s 80-IB. 3. Because the CIT(A) has erred on facts and in law in disallowing the appellant's claim of exemption u/s 80IB on duty draw back receipts of ₹ 72,39,881/- and sale of license receipts of ₹ 40,08,735/- credited his business profit in the books of Banthar unit of the assessee. 4. Because the Duty Draw Back of ₹ 72,29,881/- being part of the cost of the goods exported is self consumed by the appellant (for it is not transferable), deduction u/s.801B shall not be denied on the same treating into be an incentive. 5. Because Duty Draw Back is a refund of the cost of goods manufactured and is not an amount provided to the appellant over and above .the cost. It is not ex-gratia also. 6. Because the CIT(A) has failed to appreciate the facts and circumstances of the case and has arbitrarily held that the duty drawback is an incentive and not income derived from the activity of industrial undertaking. 7. Because the CIT(A) has failed to appreciate that the disallowance of ₹ 8,76,376/- being interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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