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TMI Blog2018 (9) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... and noted that on both the issues i.e. Prior Period Adjustments of brokerage refund as well as interest paid to Global Trust Bank and Madhavpura Mercantile Co-op Bank, the complete details were filed before the AO during the course of original assessment proceedings in response to the queries raised by the AO. Admittedly, the assessment was completed under section 143(3) of the Act and reopening by issuing notice under section 148 of the Act is beyond four years - decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... s) of ₹ 4,89,06,057/- and the balance of ₹ 3,06,78,407/- was shown as prior period item below the line of balance sheet. On verification of the previous year's assessment records and financial statements of A.Y.'s 2000-01, 01-02, 02-03 it was seen that the assessee company had never credited any brokerage income. On the contrary expenses were claimed towards brokerage and commission payment. Since the above brokerage income was not taxed in the earlier years as claimed by the company, it should have been treated as income arising during the relevant financial year and should have been taxed, instead of adjusting it against prior period expenses. The tax on the above income escaping assessment works out to ₹ 2,76,31,149/- (Rs. 2,63,1 5,380(tax) + ₹ 13,1 5,769(SC)" 2. While going through the financial statements it was seen that Ks. 19,27.71.401/- was debited to profit and loss etc towards Interest paid to Global Trust Bank and Madhavpura Mercanitle co-op bank. On perusal of the assessment records i.e. the list of secured loans and the bank statements of both the above banks, it was noticed that the interest of Ks. 10,43,77,146/- in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove binding precedents of the Hon'ble Supreme Court, I am of the view that the Ld. AO. had valid reasons to initiate reassessment proceedings which were duly recorded and communicated to the appellant and therefore, there is no merit in the arguments advanced by the Ld. AO. on this ground. Accordingly, this ground of appeal is dismissed." Aggrieved, now assessee is in appeal before Tribunal. 6. Before us, the learned Counsel for the assessee stated that the assessee before AO during the course of original assessment proceedings filed details of prior period adjustment vide letter dated 06.02.2006 and the relevant details are as under: - Details of prior Period Adjustment Sr. No. Particulars Amount A Prior Period of Income Brokerage Refund a) Woodstock Securities Pvt. Ltd 42,263,033 b) Vimla S. Jajoo 2,147,013 c) Herald Equities Pvt. Ltd 3,269,609 d) Marshall Equities Pvt. Ltd 2,501,237 e) Omega Equities Pvt. Ltd. 13,259,572 f) Millenium Equities Pvt. Ltd 11,746,339 75,186,802 Bank Interest Reversed Global Trust Bank Ltd. 420,314 Global Trust Bank Ltd. 3,621,243 Global Trust Bank Ltd. 356,165 4,397,722 B Prior Period of Expenses Global ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f opinion as the AO has applied his mind to the facts of the case and taken a view. For this the learned Counsel for the assessee relied on the decision of Hon'ble Bombay High Court in the cases of Aventis Pharma Ltd. vs. ACIT (2010) 323 ITR 570 (Bom), Asteriods Trading Investments (P.) Ltd. Vs. DCIT (2009) 308 ITR 1990 (Bom), ICICI Prudential Life Insurance Co. Ltd. Vs. ACIT (2020) 325 ITR 471 (Bom). 9. When this was pointed to the learned Sr. Departmental Representative that was the failure on the part of the assessee, he only referred to the re-assessment order and that the assessee during the course of assessment proceedings could not submit the confirmations of the brokers whoever refunded the excess brokerage charge to them. Hence, there is failure on the part of assessee itself. 10. We have heard the rival contentions and gone through the facts and circumstances of the case. We have gone through the reasons recorded for issuance of notice under section 148 of the Act as reproduced above and noted that on both the issues i.e. Prior Period Adjustments of brokerage refund as well as interest paid to Global Trust Bank and Madhavpura Mercantile Co-op Bank, the complete details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Allahabad High Court in the case Foramer vs. CIT (2001) 247 ITR 436 (All) wherein Hon'ble Allahabad High court has considered the issue as under: - "Having heard the learned counsels for the parties, we are of the view that these petitions deserve to be allowed. It may be mentioned that a new section substituted section 147 with effect from 1-4-1989. The relevant part of the new section 147 is as follows : "147. Income escaping assessment.-If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s case. As already stated above, Boudier Christian's case related to the employees of the company, whereas the impugned notice has been issued to the company. Hence, it cannot be said that the proposed reassessment in consequence of the impugned notice would be in consequence of, or to give effect to, any findings of the Tribunal in Boudier Christian's case. A direction or finding as contemplated by section 153(3)(ii ) must be a finding necessary for the disposal of a particular case, that is to say, in respect of the particular assessee and in relevance to a particular assessment year. To be a necessary finding it must be directly involved in the disposal of the case. To be a direction as contemplated by section 153(3)(ii) it must be an express direction necessary for the disposal of the case before the authority or court vide Rajinder Nath v. CIT[1979]120 ITR 141 (SC); Gupta Traders v. CIT[1982] 135 ITR 5042 (All.); CIT v. Tarajan Tea Co. (P.) Ltd.[1999] 236 ITR 4773 (SC) and CIT v. Goel Bros.[1982] 135 ITR 5114(All.), etc. The case of an expatriate employee was to be decided on the basis of the provisions of article XIV of the treaty, whereas corporate income was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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