2004 (10) TMI 295 - AT - Income Tax

Tribunal Upholds CIT(A)'s Order: Validates Reassessment, Deprecation Disallowance, and Interest Relief; Dismisses Appeals.

Gyarsi Lal Gupta & Sons. Versus Income-tax Officer, Ward 3 (3).

Gyarsi Lal Gupta & Sons. Versus Income-tax Officer, Ward 3 (3). - ITD 094, 329, TTJ 095, 386, Issues Involved:1. Initiation of proceedings u/s 147 read with section 148.2. Reference made by the Assessing Officer u/s 133(6) for calling information.3. Confirmation of disallowance of depreciation claimed through returns filed in response to notices u/s 148.4. Charging of interest u/s 234A and 234B.5. Deletion of trading addition by the CIT(A).Summary of Judgment:1. Initiation of Proceedings u/s 147 read with Section 148:The assessee challenged the initiation of proceedings u/s 147 read with section 148, arguing that the reasons for reopening were not supplied. The Tribunal found that the reasons were properly recorded and disclosed to the assessee. The CIT(A)'s order was sustained as it was not laconic.2. Reference Made by the Assessing Officer u/s 133(6):The assessee argued that the Assessing Officer called for information without prior approval of the CIT, which was a curable irregularity and not a nullity. The Tribunal held that no appeal lies against section 133(6) and the information obtained can still be used against the assessee. This ground was dismissed.3. Confirmation of Disallowance of Depreciation:The assessee claimed higher depreciation in returns filed in response to notices u/s 148. The Tribunal upheld the CIT(A)'s order, relying on the Supreme Court's judgment in CIT v. Sun Engineering Works (P.) Ltd., which stated that reassessment proceedings are open only for items of under-assessment. The original claim of depreciation was final and could not be revised in reassessment.4. Charging of Interest u/s 234A and 234B:The Tribunal noted that the Assessing Officer had given specific directions for charging interest u/s 234A, 234B, and 234C. The Assessing Officer was directed to allow consequential relief, if any.5. Deletion of Trading Addition:The Revenue appealed against the deletion of trading additions by the CIT(A). The Tribunal upheld the CIT(A)'s decision, stating that the reassessment proceedings are open only for items of under-assessment and not for reviewing concluded items. The CIT(A) had correctly followed the Supreme Court's decision in Sun Engineering Works (P.) Ltd. and the Punjab & Haryana High Court's decision in Vipan Khanna v. CIT.Conclusion:The appeals filed by the assessee for both years were dismissed, and the appeals filed by the Revenue for both years were also dismissed. The Tribunal upheld the CIT(A)'s order on all grounds.