TaxTMI 
TaxTMI 
2013 (8) TMI 660
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....AT, Delhi Bench in the case of Lalsons Entp. on which the learned CIT(A) relied, is not applicable to the facts of the assessee's case. 4. The CIT(A) erred in deleting an amount of Rs.3,10,20,000/- while computing the income under regular provisions of the Act. 5. The learned CIT(A) also erred in deleting the impugned addition of Rs.9,36,09,75/- as derived from the business of power and grant the deduction u/s. 115JA(2)(iv). 6. The CIT(A) ought not to have held that the additional income derived is also only from the power business on the ground that the details of income earned on account of energy charge, foreign exchange variation recovery is also one of the components of income." 2. We have heard the learned Departmental Representative and the learned counsel in detail and the learned counsel has also placed on record, a paper-book containing 25 pages and also the annual report alongwith statement of details during the course of hearing. The issues involved in this appeal are considered and decided hereunder- 3. The issue in dispute in grounds No.2 and 3 is with reference to exclusion of an amount of Rs.17,75,851 shown as re....
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....NSCO, and since the assessee had offered the same in the earlier year, the deduction this year cannot be allowed. The learned CIT(A), on noticing that the entries have been reversed and according to the PPA, the foreign exchange debt repayment has to be borne by the APSEB(Present AP Transco), any deficiency or gain on account of foreign exchange fluctuation would be to the account of APSEB only. Further, clarification given by the assessee that in the assessment year 2002-03, the assessee had accounted the gain derived on foreign exchange fluctuation as income in that year, which included the impugned addition of Rs.3,10,20,000, was also noticed by the CIT(A), who accordingly directed the Assessing Officer to delete the addition. Revenue is aggrieved. 6. After considering the rival contentions and examining the details on record, we notice that the original assessment in this case was completed under S143(3) by the order dated 30.03.2001, determining the loss of the assessee at Rs.9,37,00,379. The assessee has furnished the return admitting loss at Rs.9,91,61,190 in the re-assessment proceedings. It is also noticed that the assessment was reopened under S.148 issuing notice on 2....
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.... be considered whether the additional income accounted for by the appellant in its books is derived from its power business or not? One of the major component of additional revenue is on account of foreign exchange variation on approved capital cost. I observe that in the details of income earned on account of energy charges, foreign exchange variation recovery is also one of the components of income. Thus, it could be seen that the additional income derived is also from power business. Therefore, it is to be held that the AO's view that the additional revenue is not from the business of power is misplaced. Therefore, the A.O. is directed to consider the impugned addition of Rs.9,36,09,750 as derived from business of power and grant the deduction u/s. 115JA(2)(iv) in addition to the deduction of Rs.62,55,35,166/- already allowed...." 8. After considering the rival submissions, we do not see any reason to interfere with the order of the CIT(A). It is the assessee's income which has various components for working out the purchase price of energy from the assessee by the AP Transco and one of the components was capital cost of the power project. Since the amount accounted for as in....
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....r 2001-02 was filed on 31.10.2001 claiming 'NIL' income under the normal provisions and book profit of Rs.68,54,75,430. The assessment under S.143(3) was completed on 24.12.2003. On the reason that income tax received or receivable, being reimbursable by TRANSCO as per clause 3.4 of the Power Purchase Agreement with the said company, the Assessing Officer was of the opinion that an amount of Rs.3,40,93,235 has not been offered as income nor credited to the sales revenue, thereby the same amount has escaped assessment. Accordingly, in order to bring the said amount to tax, the Assessing Officer recorded satisfaction to the extent of income-tax receivable of RsS.2.40,45,266 to be treated as income of the assessee, both under the normal provisions and also under S.115JB, a notice under S.148 was issued on 12.7.2006, i.e. after four years from the end of the assessment year. 11. While determining total income at Rs.nil, in the re-assessment, the Assessing Officer made an addition of Rs.3.40 crores to the returned income under the normal provisions on the reason that this amount has accrued in terms of power purchase agreement entered into with the TRANSCO 12. Before the learned C....
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....in para 2.2 and para 3.1 of the original assessment order u/ s~ 143[3] dated 24/12/2003. The appellant cannot be penalized for non consideration or non application of the relevant information furnished by the AO. The A.O. has not made out a case or indicated in any manner that the appellant had failed to disclose the material facts necessary for assessment during the original assessment proceedings. On these facts, re-opening of assessment beyond four years, when the original assessment is completed u/ s 143(3) of the I.T. Act, 1961, appellant cannot be upheld in law. The head note in the judgment delivered by the Hon'ble Supreme Court in the case of CIT vs Foramer France [264 ITR 566[SC], reads as under: "Reassessment--Limitation--Law applicable--No failure to file return or to disclose fully and truly all material facts--Notice for reassessment--Issued beyond seven years--Barred by limitation-Income-tax Act, 1961, ss. 143(3), 147, prov. (as amended by Direct Tax Laws (Amendment) Act, 1987). Assessment - Pursuant to finding or order - Limitation - Extension of period- Direction or finding in order pass....
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....the notices were without jurisdiction, the assessee should not be relegated to the alternative remedy, the Department preferred appeals to the Supreme Court. The Supreme Court saw no reason to differ and dismissed the appeals. Decision of the Allahabad High Court in Foramer v. CIT(2001) 247 ITR 436 affirmed. 2.5. From the above it is very clear that re-opening of assessment beyond four years in case of early scrutiny assessment when there was no failure on the part of the appellant to disclose fully and truly all material facts, cannot be held to be valid. The legal position is further explained in the recent decision of the Hon'ble Andhra Pradesh High Court in the case of Mahalaxmi Motors Ltd. vs DCIT reported in 265 ITR 53, wherein the Hon'ble High Court explaining the same principle has observed as under: "As indicated above, in our considered view, the petitioner-assessee had furnished all material facts truly and fully before the assessing authority at the relevant point of time. When once all the information is furnished to the assessing authority, it is (or the assessing authority....
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....cts of the case." 13. The learned Departmental Representative before us reiterated the submissions that the assessee did not bring the income accrued to the assessee to the knowledge of the Assessing Officer, and relied on the explanation to the proviso, which states that production before the Assessing Officer, books of account or other evidence from which material evidence could, with due diligence, be discovered by the Assessing Officer, will not necessarily amount to disclosure within the meaning of the proviso. He reiterated the contentions as discussed by the Assessing Officer in the assessment order. 14. The learned counsel relied on the order of the CIT(A) 15. After considering the rival contentions, and perusing the paper-book placed before us containing pages 1 to 67 and the original assessment order of the Assessing Officer in this regard, we are of the opinion that the reopening of the assessment after four years from the end of the assessment year is bad in law, as held by the CIT(A). As seen from the satisfaction recorded for initiation of the proceedings, para 1 itself states that 'assessee company is having a Power Purchase Agreement with the TRANSCO'. As p....