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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘SMC’
Before: SHRI RAJPAL YADAV & SHRI WASEEM AHMED
PER RAJPAL YADAV, JUDICIAL MEMBER : Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-4, Vadodara dated 5.5.2017 passed for the Asstt.Year 2009-10.
The ld.counsel for the assessee at the very outset submitted that the assessee has taken additional grounds of appeal, whereby it has challenged reopening of the assessment under ground no.3. He submitted that the issue in dispute is squarely covered in favour of the assessee by judgment of Hon’ble jurisdictional High Court rendered in the case of CIT Vs. Mohmed Juned Dadani, 335 ITR 172 (Guj). Contention of the ld.counsel for the assessee is that assessment was reopened on the ground that the assessee has made deposits in cash in
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bank account, whereas no addition qua that issue has been made. Hon’ble Gujarat High Court after putting reliance upon the judgment in the case of CIT Vs. Jet Airways I Ltd., 331 ITR 236 and the judgment of Hon’ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. Vs. CIT, 336 ITR 136 has held that if no addition was made to the income of the assessee on the issue for which assessment was reopened then any income found to have been escaped from the assessment during the re- assessment proceedings on other issues cannot be added. On the other hand, the ld.DR relied upon the orders of the Revenue authorities.
We have duly considered rival contentions and gone through the record carefully. The reason for reopening of the assessment has been placed on page no.1 of the paper book, which reads asunder: Office of the Income Tax Officer, Lunawada, 4th Floor,Dayalu Complex, Modasa Road, Lunawada
PAN No : AABAT3395D Dated : 24/05/2016
To The Harsiddhi Co-Op Credit Society Ltd. Tower Road Santrampur-3 89260.
Sub.: Reason for issue of Notice U/s 148 of the Act, in your case-Reg.
Sir/Madam,
In this connection it is submitted that as per details available with this office, Cash of Rs.99,08,676/- has been deposited in the Bank account of The Harisiddhi Co op Credit Society, during the F.Y. 2008-09. From verification of the record, it is found that the you had not filed your return of income for the A.Y. 2009-10 relevant to F.Y. 2008-09.
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Therefore, I have reason to believe that the income chargeable to tax has escaped from assessment within the meaning of section 147 of the Income Tax Act, 1961 Yours faithfully,
Yours faithfully,
Sd/- q(Manoj Kumar Yadav) Income Tax Officer Lunawada
A computation of income at the end of the assessment order would show that the ld.AO has not made addition for which the assessment was reopened. This computation reads as under:
“6. Subject to the above remarks, the total income of the assessee is recomputed as under;- .
Total income as per return of income Nil Add: Income from other sources being interest as
Interest on FD from Dena Bank Rs. 39490/- Interest on FD from The SBI Rs. 128066/- Interest on FD from Bank of Baroda Rs. 188457- Rs. 1,86,401/- Disallowance as per Para-4 Rs. 5,30,857/- Total assessed income Rs. 7,17,258/- Round off... Rs.7,17,260/-
The Hon’ble Gujarat High Court, Delhi High Court and Bombay High Courts are unanimous while construing the expression “and also” employed in section 147 of the Income Tax Act. The relevant part of section 147 reads as under:
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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 re-assess 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 recomputed 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 relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub- section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year;
[Provided further that the AO may assess or reassess such income other than the income involving matters which are the subject matters of any appeal, reference or revision which is chargeable to tax and has escaped assessment].
xxxx xxxx xxxx
The Hon’ble High Courts have observed that if no addition is being made on an issue for which assessment was reopened, then no other addition on an issue unearthed as escapement of income during the course of re-assessment proceedings will be made. The expression “and also” authorises the AO to make addition of all other incomes which were found to be escaped during the re-assessment proceedings. Hon’ble Courts have observed that “and also” would mean that if addition is being made qua the issue for which assessment is being reopened, then other additions should be made. If no addition could be
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made on the items for which the assessment was reopened other additions cannot be made. Respectfully following the judgment of Hon’ble Gujarat High Court in the case of CIT Vs. Mohmed June Danani (supra), we allow this appeal of the assessee and quash the re- assessment order.
In the result, appeal of the assessee is allowed.
Pronounced in the Open Court on 26th March, 2019.
Sd/- Sd/- (WASEEM AHMED) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER