2015 (3) TMI 152

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..... ng the ratio in Kelvinator (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) also held that initiation of reassessment proceedings on the basis of audit report objections is impermissible. In this regard, the Court also notices the ruling in Transworld International Inc. v. JCIT (2004 (9) TMI 26 - DELHI High Court) and Indian and Eastern Newspaper Society v. CIT (1979 (8) TMI 1 - SUPREME Court) ITR 996. This was subsequently affirmed in CIT v. Lucas TVS Ltd. (2000 (12) TMI 102 - SUPREME Court). In the circumstances, therefore, we are of the opinion that no question of law arises; the ITAT acted within its rights in applying the ratio of previous binding decisions and affirming the CIT (Appeals)’s order. - Decided against revenue. - ITA No. 88 .....

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..... on in the reassessment notice and further proceedings was the audit objections. Relying upon the precedents of the Courts, notably, CIT v. Kelvinator of India Limited 320 ITR 561, the CIT(Appeals) held that in the circumstances of the case, reassessment was not justified in law. The ITAT confirmed the CIT(Appeals) s views in the following terms: 5. We have heard rival contentions and perused the entire material available on record. From the facts as narrated above, it demonstratively emerged that the issue in question about wage revision (arrears) was duly considered during the course of assessment by way of specific query which was replied by the assessee. The assessing officer being satisfied allowed the claim during regular assessmen .....

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..... in turn, was an audit report. Now, as to the status of audit reports, the law is clear. In CIT v. Simbhaoli Sugar Mills Limited 2011 (333) ITR 470, the Court, after applying the ratio in Kelvinator (supra) also held that initiation of reassessment proceedings on the basis of audit report objections is impermissible. In this regard, the Court also notices the ruling in Transworld International Inc. v. JCIT 2005 (273) ITR 242 and the Supreme Court judgment in Indian and Eastern Newspaper Society v. CIT 1979 (119) ITR 996. This was subsequently affirmed in CIT v. Lucas TVS Ltd. 2001 (249) ITR 306 (SC). In the circumstances, therefore, we are of the opinion that no question of law arises; the ITAT acted within its rights in applying the rati .....

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