AMBERNATH PLASTO PACKAGING P. LTD,MUMBAI vs. ITO WD 2(1)(1), MUMBAI

The grounds of appeal read as under:

(A.Y. 2009-10) Ambernath Plasto Packaging Private Limited vs. ITO 1) The learned Commissioner of Income Tax (Appeals) erred in confirming the reopening of the assessment proceedings under section 147 of the Income tax Act, 1961. 2) The learned Commissioner of Income Tax (Appeals) erred confirming the disallowance of Rs.5056/- out of purchases of Rs.44,057/- from Newspark Trading Company Private Limited and addition of the same to total income as non genuine transaction. 3) The learned Commissioner of Income Tax (Appeals) erred in confirming that rent received by the appellants for part of the building is Income from House Property and not Profits and gains of business as computed by the Appellants. 4) The learned Commissioner of Income Tax (Appeals) erred in disallowing depreciation on all the assets including part of the building given on rent. 5) The learned Commissioner of Income Tax (Appeals) erred in disallowing all the expenses totaling to Rs.6,16,332/-. 6) The learned Commissioner of Income Tax (Appeals) erred in confirming the double disallowance of Rs.1,95,833/-, once disallowed in computation of income by the appellants and again by the Assessing Officer in the assessment order.

At the outset in this case challenging the reopening the ld. Counsel of the assessee submitted that there was no escapement of income envisages on accounts of the reason recorded for reopening inasmuch as the assessee had not debited the amount purchased. The impugned transaction was debited to the capital work-in- progress and no depreciation there was also claimed. Hence, the counsel submitted that the reason recorded that there was escapement of income was totally wrong. In these circumstances, he placed reliance upon the decision of Hon’ble Gujarat High Court in the case of Reckitt Benckiser Healthcare India Ltd. vs. Asst. CIT [2014] 360 ITR 427 (Guj). In this case, the Hon’ble High Court has expounded that notice for (A.Y. 2009-10) Ambernath Plasto Packaging Private Limited vs. ITO reopening has to be held to be invalid when the expenditure is not actually debited and the reason of reopening claims that income on this account.