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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI RAJENDRA & SHRI SANJAY GARG
Per Sanjay Garg, Judicial Member:
The present appeals have been preferred by the assessee against the three separate orders dated 31.5.2012 passed by Ld. Commissioner of Income Tax (Appeals)-1 [hereinafter referred to as the CIT(A)], Mumbai relevant to the assessment years 2002-03 to 2004-05. Since, these appeals pertain to the same assessee and common grounds have been taken therein, we have heard these appeals together and these appeals are being disposed of by this common order for the sake of convenience.
2 ITAs No. 5092 to 5094/Mum/2012
The grounds taken in all the appeals are common except figures, therefore, for the sake of brevity, we reproduce below the grounds for the assessment year-2003-04: “1 The learned Assessing Officer has erred in reopening assessment in absence of 'new material' under section 147, which was previously completed under section 143 (1). Further the Learned CIT(A) has erred by stating that re-opening of the assessment u/s. 147 & assessment framed there under cannot be called illegal & bad in law.
Return of Income was processed u/s 143(1) & Assessment (a) reopened u/s 148. No new reference material was available to the Assessing officer on the basis of which belief could be formed that there was escapement of Income. The Audit report & Schedules to the accounts filed with the Return of Income clearly stated that advertisement income in Income & Expenditure Account was net of expenses.
2. The learned Assessing Officer has erred in not providing the copy of reasons recorded prior to issue of notice under section 148 to complete reassessment under section 147 of the Income Tax Act, 1961. Further the Learned CIT (A) has erred by justifying this act of Assessing officer.
3. The learned Assessing Officer has erred by obtaining approval of Additional C.IT.-16 (1),Mumbai instead of the Chief Commissioner or Commissioner before issuing notice u/s 148. Further the Learned CIT (A) has erred by stating that approval is to be obtained in case the notice is issued u/s 148 beyond 4 years whereas approval of the Joint Commissioner is required even if notice is issued within four years.
The learned Assessing Officer & CIT (A) has erred by not 4. allowing deductions available under section 57 (ii) of the Income - tax Act, 1961. The Learned Assessing Officer has disallowed the total expenses of Rs.12,64,503/- incurred for earning the advertisement income of Rs.17,55,000/- .The Learned CIT (A) has given partial relief by allowing expenses of Rs 4,08,756/- but has erred by disallowing the balance expenses (Major repairs) of Rs.8,55,747/- /- by treating it as capital expenditure which must be considered as per section 57 of the Income tax Act, 1961. These are repair expenses incurred for strengthening the society building due to the hoarding displayed on the terrace.
3 ITAs No. 5092 to 5094/Mum/2012
5. The Learned Assessing Officer has erred by not signing each page of the assessment order. The Learned CIT (CA) has erred by stating that there is no such requirement.
The Learned Assessing Officer & CIT(A) has erred by not 6. considering the favourable case laws decided by the Supreme Court & other authorities.
7. The Learned Assessing Officer has erred in not considering the order passed by AO under 143 r. w.s 147 for A. Y. 1999-00 having similar facts. Further the Learned CIT (A) has erred by justifying this act of assessing officer.
The Learned-assessing officer erred by stating that the society evades the actual payment of tax by resorting to obtaining artificial certificate from engineer for structural repairs stating that these repairs are incurred for putting hoarding. The learned CIT(A) has erred by not dealing with this ground in his order.
The ld. AO has erred in not making the allocation of exp3nses, which are eligible for deduction against taxable income of advertising and hoarding charges.”
The learned. AR submitted that at the instance of client, he does not want to press grounds No.3, and 5 to 9, therefore, these grounds are dismissed as not pressed.
With regard to the grounds No.1 and 2, the Ld. AR submitted that these grounds are legal in nature. These grounds pertain to reopening of the assessment in question. He has formally informed that in the earlier years, this ground has already been decided by the Tribunal against the assessee. With regard to the ground No.4, the Ld. AR submitted that this ground stands covered in favour of the assessee by the decision of the Tribunal in the assessment year 2000-01.
We have perused the order of the Tribunal for the year 2000-01. We find that the issue relating to the reopening of the assessment u/s 147 of the Act has been discussed in detailed by the Tribunal and it was found that the Assessing Officer (hereinafter referred to as the AO) had 4 ITAs No. 5092 to 5094/Mum/2012 valid reasons to believe that the income of the assessee has escaped assessment and the said issue has been decided against the assessee. However, so far as the issue taken vide ground No.4 on merits relating to allowability of the expenditure incurred for earning the advertisement income has also been dealt with by the Tribunal, wherein the Tribunal after going through the facts and circumstances of the case, observed that in the earlier year such expenditure for displaying hoardings and the repairs done to the building due to the fixing of the hoardings etc has been allowed to the assessee. Even a remand report was called for by the Ld. CIT(A) in the earlier years, wherein the AO has admitted the expenditure incurred by the assessee and was allowed and given set off of the same against the hoarding charges received by the assessee. The facts being identical for the year under consideration are squarely covered in favour of the assessee by the decision of the Tribunal for the assessment year 2000-01, following the same precedent, we allow ground No.4 taken by the assessee.
With regard to the issue of re-opening of the assessment, we may point out that the learned. AR has raised the contention that the reasons recorded by the AO for reopening of the assessment should have been supplied to the assessee before the conclusion of the assessment. However, he has admitted that the assessee did not make any request for supply of reasons during assessment proceedings. The contention of the Ld. A.R. has been that even though the assessee did not demand the copy of reasons recorded, still it was mandatory for the AO to supply the copy of reasons along with notice under section 148 of the Act.
As pointed out earlier that in earlier years the issue of re-opening has been decided against the assessee. However, since the only ground raised on merits by the assessee is covered in favour of the assessee and the assessee has not pressed the other grounds, hence, we do not deem
5 ITAs No. 5092 to 5094/Mum/2012 fit at this stage to deliberate on the issue of reopening. This issue raised by the Ld. A.R. at this stage is rendered academic in nature and is kept open to be decided in an appropriate case.