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TMI Blog2016 (7) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... in the second round of appeal also, no addition of suppressed receipts has been made by the AO. Thus, there is no addition of suppressed receipts of ₹ 3,38,508/- in the reassessment proceedings, meaning thereby that no addition was made on the ground which was the basis for reaching the conclusion of escapement of income in the reasons recorded for issuance of notice u/s.148 of the Act. We find that the Hon’ble Bombay High Court in the case of CIT vs Jet Airways (I) Ltd. reported at (2010 (4) TMI 431 - HIGH COURT OF BOMBAY ) on the issue as to whether addition on other grounds could be made when no addition has been made of the income, which was initially the basis of reopening has decided the issue in favour of assessee. - ITA No. 1454/Ahd/2012 & CO No.143/Ahd/2012 - - - Dated:- 31-5-2016 - Shri Shailendra Kumar Yadav, Judicial Member And Shri Anil Chaturvedi, Accountant Member For the Revenue : Shri R.A. Revar, Sr. DR. For the Assessee : Shri Sunil Talati, AR ORDER Per Shri Anil Chaturvedi, Accountant Member This is an appeal filed by the Revenue and the Cross-Objection filed thereof by the assessee, both against the order of the Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io and, therefore, quashed the assessment order. The findings of ld.CIT(A) while deciding the issue are as under:- 3.3. I have carefully considered the rival submissions. It is seen that in ITA No.3359/Ahd/2007 dated 21/5/2010, the Hon ble ITAT had allowed first ground of appeal of the revenue wherein the issue of reopening of the assessment was upheld. It is further noticed that the ITAT s order dated 21.5.2010 was further contested in miscellaneous application and the Hon ble ITAT decided miscellaneous application in M.A.No.311/Ahd/2009 dated 9/6/2010. In para 4 of this order the Hon ble ITAT has upheld we may also not hear that once the entire assessment is restored to the file of the A.O for completion of assessment de-novo in accordance with law, the assessee is at liberty to file any details and evidences before the A.O. for completion of assessment. The assessee is also had liberty to raise any objection with regard to initiation of proceedings u/s.147 of the I.T.Act. In view of above directions, I am of the considered view that the issue of notice u/s.148 needs to be adjudicated. 3.4. It is a matter of record that the assessment was re-opened u/s.148 with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be worthwhile to discuss the merits of the case. The additions made by the A.O. in the assessment order are not sustainable for the following reasons:- A. In the impugned order the A.O. had assessed the income @8%. The A.O. had derives support in this regard from the provisions of sec.44AD of the I.T.Act. It is a matter of record that the appellant is having a turnover of ₹ 8,15,79,208/- which is much above the prescribed limit of sales of sec.44AD of ₹ 40 lakhs. Secondly, the appellant is maintaining books of accounts regularly. It is held by the Hon ble Delhi Tribunal in DCIT vs. Allied Construction (2007) 291 ITR 16 that where the receipt from the business of civil construction exceeded ₹ 40 lakhs, provisions of sec. 44AD were not applicable. In the instant case provisions of sec.44AD will not be applicable as the turnover is definitely more than ₹ 40 lakhs. B. During the assessment proceedings the appellant has filed following details:- a) Details of bank account b) Details of shareholding c) Details of unsecured loans and deposit d) Details of addition to fixed assets e) Details of opening and closing stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for non-disclosure of contract receipt of ₹ 3,38,508/-. In the impugned order the A.O. had not made this addition. The only addition made by the A.O. in the impugned order is ₹ 65,26,337/- towards low gross profit. As discussed in para 3.5 above, no other addition can be made in the reopened assessment order, as the addition mentioned in the satisfaction before issuing the notice u/s.148 was not made. This way addition of ₹ 65,26,337/- is not tenable. 4.1. In view of above facts, I am inclined to agree with the contentions of the ld.A.R. Accordingly, the addition of ₹ 65,26,337/- made by the A.O. towards low gross profit is ordered to be deleted. This ground of appeal is allowed. 2.2. Aggrieved by the order of the ld.CIT(A), Revenue is now in appeal before us and has raised the following grounds:- 1. The ld. CIT(A) has erred in law and on facts in holding the notice issued u/s 148 of the I.T. Act dated 08.09.2005 as abinitio void, and in quashing the assessment order completed u/s 144 of the I.T. Act. 2. The ld. CIT(A) has erred in law and on facts in deleting the addition of ₹ 65,26,337/- made by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.3. The Ld.AR, on the other hand, reiterated the submissions made before AO and ld.CIT(A) and further submitted that the preliminary condition for reopening the assessment is that there must be tangible material to reach the conclusion that there has been escapement of income from assessment and the reasons recorded by the AO must have a live link with the formation of belief. He submitted that in the present case, the AO had reopened the assessment for the reason that assessee had suppressed job work receipts of ₹ 3,38,508/-. The aforesaid addition was deleted by the ld.CIT(A) and thus remained no addition to that count. He therefore submitted that in the absence of any addition on the main issue on which the assessment has reopened, no other additions could be made in the reassessment proceedings. He thus supported the order of ld.CIT(A). 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The issue in the present case is with respect to reopening of the assessment and the additions made in reassessment. On perusing reasons for reopening of the assessment as noted in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of the proceedings-However, if after issuing a notice under s. 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him to independently assess some other income-If he intends to do so, a fresh notice under s. 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee. 5.1. Before us, Revenue has not brought any contrary binding decision in its support. In view of the aforesaid facts, we do not see any reason to interfere with the order of the ld.CIT(A). Thus, this ground of Revenue is dismissed. 5.2. As a result, Revenue s appeal is dismissed. 6. Now we take up the Assessee s Cross Objection No.143/Ahd/2012 for AY 2002-03. 6.1. Before us, ld.AR vide letter dated 30/05/2016 submitted that if the appeal of Revenue is dismissed, he did not wish to press the grounds raised in the Cross Objection. We hereinabove, while deciding the appeal of Revenue have dismissed the appeal of Revenue and, therefore in view of the submissions of AR, the Cross Objections of A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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