TaxTMI 
TaxTMI 
2015 (9) TMI 263
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion, testing and commissioning of Power Plant equipments. The assessee filed its return of income for the assessment year 2005-06 on 28.10.2005 declaring an income of Rs. 4,86,711. The same was processed under S.143(1) of the Act. Later on, the case was reopened by issuing notice under S148 of the Act on 30.9.2009 and the assessment was ultimately completed determining the total income of the assessee at Rs. 27,07,840. Aggrieved by the assessment, assessee preferred appeal. 3. In the appeal before the CIT(A), the assessee has in the first place contested the legality and validity of the reopening the assessment. The case was reopened by the Assessing Officer issuing a notice under S.148 of the Act, on the ground that there was a differenc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... notice u/s. 148 was issued, the reopening of assessment under S.147 would still be valid. As for the estimated income brought to tax, the CIT(A), following the decision of Special Bench in the case of Arihant Builders, Developers and Investors P. Ltd. (106 ITD 10), restricted estimation of profit in the assessee's case to 8% of the gross receipts (as against 10% adopted by the Assessing Officer) for both sales as well as job work charges clear of all deductions, and directed the Assessing Officer to recompute the income accordingly. 4. Still aggrieved, assessee preferred the present appeal before us 5. Effective grounds of the assessee in this appeal are as follows- (1) The learned Commissioner of Income-tax(Appeals) IV erred both on fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at Rs. 21,00,776 is wholly unsustainable in law." 7. The learned counsel for the assessee, reiterating the averments made in the above grounds and additional grounds, submitted that the very reopening is bad in law, and no addition, in relation to the grounds on which reopening was initiated, having resulted in the reassessment made by the Assessing Officer, the impugned re-assessment order cannot be sustained. He placed reliance on the decision of the Calcutta Bench of the Tribunal in the case of Meheria Reid & Co. V.s. ITO (81 DTR Cal. Trib 36) and the Gujarat High Court in the case of CIT V/s. Mohmed Juned Dadani (Tax Appeal No.984 of 2011 to 967 of 2011 dated 29.1.2013), copy filed before us. 8. The learned Departmental Representative....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roceedings under this section, notwithstanding that the reason for such issue has not been included in the reasons recorded under sub-section (2) of section 148. This amendment will take effect retrospectively from 1st April, 1989 and will accordingly, apply in relation to assessment year 198990 and subsequent years." 10. In the case of Travancore Cements V/s. Addl. CIT and Anr. (305 ITR 178), it was held that Explanation of S.147 of the Act does not in any manner even purport to expand the power to the Assessing Officer under S.147 of the Act. In any case, an explanation cannot expand the scope and speech of the main body of the statutory provision. In the leading decision of the Bombay High Court in the case of CIT Jet Airways (I) Ltd. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... made by the Assessing Officer cannot be upheld. 11. With respect to 2nd additional ground of appeal, we refer to the decision in the case of Meheria Reid & Co. Vs. ITO, [2013] 81 DTR (Kol)(Trib) 386 wherein it has been held as under: "In the instant case, assessment has been reopened on the ground that there is discrepancy between professional income declared by the assessee and the professional income as per TDS certificates and that it requires verification to find out whether any taxable income has escaped assessment - There is nothing in the reasons to indicate that there is escapement of income - A variation in these two figures does not necessarily lead to escapement of income - Mere need to verify the discrepancy does not bring th....