ITA No. 2654/Del/2013. Case: Jindal Pipes Ltd. Vs ACIT, Circle 4(1). ITAT (Income Tax Appellate Tribunal)
| Case Number | ITA No. 2654/Del/2013 |
| Counsel | For Appellant: Ved Jain, Adv. and Ashish Chadha, CA and For Respondents: Umesh Chander Dubey, Sr. DR |
| Judges | N.K. Saini, Member (A) and Sudhanshu Srivastava, Member (J) |
| Issue | Income Tax Act, 1961 - Sections 143, 143(3), 147, 147(1), 148, 148(2), 68, 81, 80 HH, 80I, 80HH |
| Judgement Date | April 03, 2017 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
Sudhanshu Srivastava, Member (J), (ITAT Delhi 'D' Bench)
-
This appeal has been preferred by the assessee against the impugned order dated 28.03.2013 by the ld. CIT(A)-VIII, New Delhi and pertains to assessment year 2004-05.
-
Brief facts of the case are that the assessment in this case was completed u/s. 143(3) of the Income Tax Act, 1961 (the Act) on 18.12.2006 at an income of Rs. 17,84,18,464/- as against the returned income of Rs. 17,72,42,361/-. Subsequently, the assessment was reopened u/s. 148 after recording the following reasons:-
Assessment in this case was completed under section 143(3) at income of Rs. 17,84,18,464/-. The scrutiny of assessment records revealed that the assessee claimed an expenditure of Rs. 50,34,277/- on account of bank guarantee as per notes to accounts column 7. This expenditure was in the nature of contingent liability winch should have been disallowed. The mistake resulted in under assessment of income of Rs. 50,34,277/- involving tax effect of Rs. 24,02,043/-.
Further scrutiny of assessment records revealed that the assessee had residential building and received rental income on it. Depreciation on the same was claimed at Rs. 6,60,095/-. As it was not used for the purpose of business, depreciation was not allowable on the same. The mistake resulted in aider assessment of Rs. 6,60,095/- involving tax effect of Rs. 3,14,956/-.
In view of the above, I have reasons to believe that the income of Rs. 50,34,277/- and Rs. 6,60,095/- aggregating to Rs. 56,94,372/- chargeable to tax has escaped assessment within the meaning of section 147/148 of the Income Tax Act, 1961.
2.1 Further, reasons were recorded on 29.03.2011 as under:-
Assessment in this case was completed under section 143(3) of the Income Tax Act, 1961 on 18.12.2006 at an income of Rs. 17,84,13,464/-. As per the information received from Investigation Wing, Income Tax Department, New Delhi regarding list of Accommodation Entries, the above mentioned assessee was found to have taken accommodation entries amounting to Rs. 20,00,000/- from the following parties.
(i) Prakash Punit Commerce & Consultant amounting to Rs. 5,00,000/-
(ii) C.V. Metal Powders (Haryana) Ltd. amounting to Rs. 5,00,000/-
(iii) Saheb Enterprises amounting to Rs. 10,00,000/-
During the course of search I survey on the above parties, it has been proved that said companies/parties are involved in giving accommodation entries to various individuals/companies.
In view of the above, I have reasons to believe that the income of Rs. 20,00,000/- chargeable to tax has escaped assessment within the meaning of section 147/148 of the Income Tax Act, 1961.
2.2 In response, the assessee requested to treat the original return filed by the assessee to be the return in response to notice u/s. 148 of the Act and also requested for copy of reasons recorded u/s. 143 of the Act. Later on, the assessee filed the objections against reopening which was disposed of vide interim order dated 16.11.11. The reassessment was completed vide order dated 26.12.2011 at a total income of Rs. 18,04,18,464/- after making a further addition of Rs. 20 lakh as unexplained credit u/s. 68 of the Act to the income assessed vide order dated 18.12.2006 passed u/s. 143(3) in the original assessment proceedings.
2.3 Aggrieved, the assessee preferred an appeal before the Ld. CIT (A) challenging the reopening of assessment as well as challenging the addition on merits. The Ld. CIT(A) dismissed the appeal of the assessee and aggrieved the assessee has now approached the ITAT and has raised the following grounds of appeal:-
1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT (A)] is bad, both in the eye of law and on the facts.
2. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that proceedings initiated under Section 147, read with Section 148 are bad as the condition and procedure prescribed under the statute have not been complied with.
3(i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the reassessment proceedings initiated by the learned A.O. are bad in the eye of law as the reasons recorded for the issue of notice under Section 148 are bad in the eye of law and are contrary to the facts.
(ii) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts...
To continue reading
Request your trial