MD. SAHABUDDIN Vs. INCOME TAX OFFICER
LAWS(IT)-2014-6-9
INCOME TAX APPELLATE TRIBUNAL
Decided on June 04,2014

Md. Sahabuddin Appellant
VERSUS
INCOME TAX OFFICER Respondents

JUDGEMENT

GEORGE MATHAN,J. - (1.) THIS is an appeal filed by the assessee against the order of ld. Commissioner of Income Tax (Appeals) - XXIV, Kolkata in Appeal No. 676/CIT(A) -XXIV/38(4)/09 -10 dated 18.06.2012 for the assessment year 2005 -06.
(2.) SHRI S.M. Surana, Advocate and Shri Sunil Surana, Advocate, represented on behalf of the assessee and Shri Apurva Kumar Das, JCIT, Sr. D.R., represented on behalf of the Revenue.
(3.) IN the assessee's appeal, the assessee has raised the following grounds: - (1) For that the order of the ld. CIT(A) is arbitrary, illegal and bad in law. (2) For that on the facts and circumstances of the case, the ld. CIT(A) erred in upholding the action of the AO is not filing the proceedings initiated u/s. 147 of the I.T. Act, 1961, when the AO was satisfied that the income of the appellant has not escaped assessment on the grounds of reasons recorded for initiation of proceedings u/s. 147 of the I.T. Act, 1961. (3) For that the ld. AO having been satisfied that there was no escaped income on the basis of recorded reasons, the proceedings initiated u/s. 147 should have been dropped. (4) For that on the facts of the case the proceedings initiated and continued u/s. 147 is bad in law and the assessment was liable to be quashed. (5) For that the findings of the ld. CIT(A) directing the AO to add the sum of Rs.12,37,716/ - in assessment year 2004 -05 when such finding or direction was neither necessary not required for the purpose of disposing off the appeal before him. (6) For that the ld. CIT(A) even otherwise erred in directing to reopen the assessment for assessment year 2004 -05 when the proceedings for the said year could not have been taken under normal provision of sec. 147 at the time when the ld. CIT(A) passed the direction. (7) For that even otherwise there was no justification to direct the AO to include the amount as income in assessment year 2004 -05 when there was no investigation or enquiry nor any facts on record to conclude that the said amount was income and that too for the assessment year 2004 -05. (8) For that on the facts and circumstances of the case, without prejudice to the grounds of appeal no. 2 to 7 above, the ld. CIT(A) erred in confirming disallowance of depreciation on vehicles for Rs.60,000/ - out of Rs.1,37,487/ -. (9) For that on the facts and circumstances of the case, without prejudice to the grounds of appeal no. at 2 to 7 above, the ld. CIT(A) erred in confirming disallowance of interest to bank Rs.87,825/ - out of Rs.1,84,300/ -. (10) For that on the facts and circumstances of the case, without prejudice to the grounds of appeal no. 2 to 7 above, the ld. CIT(A) erred in treating investment in immovable properties for Rs.12,37,716/ - in immediately preceding assessment year 2004 -05 as unexplained and consequently erred in giving direction u/s. 150 of the I.T. Act, 1961 to assess the same as unexplained investment in preceding assessment year 2004 -05. (11) For that on the facts and circumstances of the case, the order of the CIT(A) be modified and the assessee be given the relief prayed for. (12) For that the assessee craves leave to add, alter or amend any ground before or at the time of hearing. At the time of hearing, ld. A.R. for the assessee argued that the issue of reopening was to be reconsidered first. Ld. A.R. drew our attention to the reasons for reopening, which were recorded in the assessment order at page 2. It was the submission that the reason assigned for reopening of the case was that the asset side of the balance sheet was more than the liability side which implied that the assessee had made investments more than the known sources of income amounting to Rs.5,75,506/ -, which was the difference. It was the submission by the ld. A.R. that the reopening had been done on a specified reason that the asset side was more than the liability side. Assessee had explained the said discrepancy and the same had been accepted by the Assessing Officer and no addition made on the said count. It was the submission that consequently the very foundation of the reopening no more survived. It was the submission that once the reason for the reopening has been explained and such explanation has been accepted then the reopening no more survived and consequently no further addition can be made by resorting to reassessment proceedings. For this proposition, he placed reliance on the decision of the Hon'ble Mumbai High Court in the case of CIT -vs. - Jet Airways India Limited reported in 331 ITR 236, as also the decision of the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Limited -vs. - CIT reported in 336 ITR 136 as also the decision of the Hon'ble Mumbai High Court in the case of Hindustan Lever Limited reported in 268 ITR 332. He also placed reliance on the decision of the Hon'ble Supreme Court in the case of CIT -vs. - Sun Engineering Works (P) Ltd. reported in 198 ITR 297 (SC). It was the submission that the reassessment having been initiated on a particular ground and since no addition had been made in respect of the same, entire reassessment is vitiated in law.;


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