TaxTMI 
TaxTMI 
2011 (2) TMI 978
X X X X Extracts X X X X
X X X X Extracts X X X X
....,743 as claimed by your appellant. The learned Commissioner of Income-tax (Appeals), erred in upholding the action of the Assessing Officer of not granting deduction on the export incentives of DEPB earned during the year. Your appellant submits that the deduction under section 80HHC of Rs. 3,22,99,743 as claimed by your appellant is allowable and ought to be allowed. Your appellant submits that the amendment made by the Taxation Laws (Amendment) Act, 2005 discriminates between the assessee having Export Turnover more than Rs. 10 crores and other assessees and hence the same should be considered as non-operative and ought not to have been applied in the case of your appellant. Without prejudice to the above, your appellant submits that at least the deduction under section 80HHC of Rs. 55,66,148 as granted by the Assessing Officer in the Original assessment should have been held as allowable by the Commissioner of Income-tax (Appeals). (3) The learned Commissioner of Income-tax (Appeals) erred in holding that section 243B is not appealable and not following the CBDT's Circular No. 2/2006, dated 17-1-2006 under which interest under section 234B cannot be levied i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ysis of the issues involved therein will be considered at a later stage, but pending the appellate proceedings before the ITAT, the Assessing Officer initiated proceedings under section 147 by recording reasons under section 148. The issue considered in arriving at the belief that income has escaped assessment was that the earlier Assessing Officer has considered loss in trading of goods and allowed it to be set off to the profit on incentives and accordingly made a mistake in allowing the excess deduction under section 80HHC. According to the opinion of the Assessing Officer since the assessee had no profits from export business the same could not be set off to the incentives and deduction under section 80HHC was not allowable. He relied upon the decision of the Hon'ble Bombay High Court in the case of Rohan Dyes & Intermediates Ltd. v. CIT [2004] 270 ITR 350/142 Taxman 503. Accordingly, as the assessment has been already completed under section 143(3) and the period of 4 years has not elapsed invoking Explanation 2(c) to section 147 with the approval of the ACIT, Range 1 a notice under section 148 was issued. The assessee contended that it was only a change of opinion and the ear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT [2002] 253 ITR 83. The Assessing Officer has further pointed out that a special leave petition against the decision of the Delhi High Court in the case of Kelvinator of India has been admitted by the Supreme Court as reported at 264 ITR 34. 3.4 On a consideration of the matter. I am inclined to agree with the Assessing Officer. As per the provisions of section 147 substituted by the Director Tax Laws (Amendment) Act, 1987, with effect from 1-4-1989, the ambit for reopening of assessment has been considerably widened. As per Explanation 2(c)(i) and (iii), underassessment of income or allowance of excessive relief in completed assessments have been deemed to be cases where income chargeable to tax has escaped assessment. In the instant case, the assessment was reopened in view of decision of the Supreme Court in the case of IPCA Laboratories Ltd. 266 ITR 521 and of the Bombay High Court in the case of Rohan Dyes and Intermediates Ltd. 270 ITR 350 where it was held that in the event of losses from exports, deduction under section 80HHC was not admissible. In view of these decisions, it is clear that the deduction allowed under section 80HHC in the original assessment was not co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ground raised before the ITAT in the cross appeal, the initiation of reassessment proceeding on the matter pending in appeal is bad in law and relied on the decision of the Hon'ble Bombay High Court in the case of Metro Auto Corpn. v. ITO [2006] 286 ITR 618 which in turn referred to Ador Technopack Ltd. v. Dr. Zakir Hussain, Dy. CIT [2004] 271 1TR 50/140 Taxman 16 (Bom.) by the jurisdictional High Court. On merits it was her submission that the issue was already considered by the ITAT on the first assessment order and the matter was restored back to the Assessing Officer to consider it in accordance with the provisions of law which are amended after passing the assessment order and further with reference to the DEPB allowance also the Board circular 2 of 2006 will apply and there is no case on merits for the Revenue. With reference to the levy of interest under section 234D it was submitted that the Special Bench decision in the case of ITO v. Ekta Promoters (P.) Ltd. [2008] 113 ITD 719 (Delhi) held that the levy of interest under section 234D for earlier years was also not correct and accordingly, the grounds are to be allowed. 8. The learned D.R. in reply, however, contested t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re the ITAT at the time of initiation of reassessment notice, we are of the opinion that reassessment initiated by the Assessing Officer is bad in law. 11. Not only that, as seen from the show-cause notice issued by the Assessing Officer and the replies given by the assessee vide letter dated 27-1-2003, all the facts are placed before the Assessing Officer and detailed explanation was given why negative profits of the business are ignored and deduction available to the extent of incentives. The assessee has given detailed two page note for the basis of computation as claimed by the assessee. The Assessing Officer also discussed the same issue in the assessment order passed on 27-2-2003 and vide para 4.3 considered the decision of the Hon'ble Bombay High Court in the case of IPCA Laboratories Ltd. (supra) and set off the trading losses to the incentives. This indicates application of mind by the Assessing Officer at the time of original assessment and subsequent belief by the Assessing Officer can only be considered as change of opinion on the same set of facts. The Hon'ble Bombay High Court in the case of Asteroids Trading & Investments (P.) Ltd. (supra) considered the issue on ....