2012 (8) TMI 976

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....eriod expenses on the ground that since the reopening of the assessment in respect of prior period expenses has been held by it to be bad in law, the ground had become infructuous. The brief facts necessary for deciding the appeal are that the assessment of the assessee for the assessment year 2004-05 was reopened for three reasons, which were recorded by the Assessing Officer as follows: - "On verification of the case records it has been observed that: - (I) The assessee has debited Rs. 60099.42 lacs to profit and loss account on account of demurrages. The expenditure being a penalty was inadmissible and should have been disallowed and added back; (II) The assessee has debited Rs. 2,70.58 lacs on account of pu....

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....ief allowed by the CIT (Appeals) in respect of these two items. However, with regard to the merits of the disallowance of the prior period expenses, the Tribunal in para 14 of its order held that since the Assessing Officer did not validly assumed jurisdiction to reopen the assessment on this point, the Revenue's ground has become infructuous and accordingly dismissed the same. The Revenue urges on the strength of the judgment of the Supreme Court in V. Jagmohan Rao and Others v. Commissioner of Income-Tax and Excess Profits Tax, Andhra Pradesh, (1970) 75 ITR 373 that once an assessment is reopened on a particular ground, it is open to the Assessing Officer to rope in all items of income that have escaped assessment and the reassessment ....