TaxTMI 
TaxTMI 
2011 (12) TMI 585
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation of proceedings and the said notice 148(1) is illegal, bad-in-law and void and hence is liable to be quashed/set aside and accordingly, be quashed and set aside." 3. After hearing both the parties, we find that originally the return was processed u/s.143(1) and later on a notice u/s.148 was served on the assessee. Objections were raised before the AO regarding re-opening of the assessment. The AO upheld the re-opening on the basis that income has escaped assessment, particularly in respect of issues like loss on account of exchange fluctuation, income of units u/s.10B, interest on loans taken for new projects capitalized in the books but claimed as revenue, commission payment, provision for debts etc. are not allowable. 4. Before the ld. CIT(A), it was mainly submitted that sufficient time was not given to file the return as provided u/s. 148(1). The re-opening was without jurisdiction because the conditions laid down in sec. 147 were not satisfied because the AO had no material at all to form a reasonable belief. The ld. CIT(A) adjudicated this issue vide para 3.2 of his order, which is as under : "3.2 Finding: The Appella....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lly and find that originally the return was processed u/s. 143(1). Later on, the AO has recorded the reasons which clearly show that income has escaped assessment and the case is clearly covered by Explanation 2(c) of sec. 147. Further, the Hon'ble Supreme Court has held in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra) that if a return has been only processed u/s. 143(1), then re-opening is justified. In fact, the held column of the said decision reads as under : "Taxing income escaping assessment in the case of an intimation under section 143(1) is covered by the main provision of section 147 as substituted with effect from April 1, 1989, and initiating reassessment proceedings in the case of intimation would be covered by the main provision of section 147 and not the proviso thereto. Only one condition has to be satisfied. Failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings when intimation under section 143(1) has been issued." In view of the above position, we are of the opinion that assessment has been validly re-opened. 8. Issue No. 2 reads as under : Sr.No. Grounds of Ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ized during the year. The balance amount of loss crystallized in subsequent years on actual repayments of the loans. It has also been noticed that in Assessment Year 2001-02 the loss has been allowed only on the basis of actual repayment of the loan. The amount of exchange rate fluctuation loss relating to the amount of loan which was not paid during the year under consideration was a notional loss, hence it is not allowable as deduction. Reliance is placed on the decision of Rajasthan High Court in Dhadda & Co. vs. CIT (2003) 22 SITC 366. However, in view of the Supreme Court decision in the case of Sutlej Cotton Mills Ltd. vs. CIT (116 ITR 1) the actual loss of Rs. 3,75,63,754 only incurred during the year on repayment of loan obtained for working capital requirement of the company is allowable deduction u/s. 37(1) of the Act, which the Assessing Officer has already allowed in assessment order for Assessment Year 2000-2001. Therefore, the Assessing Officer has allowed the deduction correctly and no interference is called for. Consequently, Ground No.2 is dismissed." 10. Before us, the ld. Sr. Advocate of the assessee submitted that the issue is covered in favour of the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of import licences, insurance claim, sundry credit balance written back and staff agreement deposit forfeiture is concerned, the same has been decided against the assessee by the order of Tribunal for earlier year, particularly in asstt. year 1998-99 in ITA No.9329/Mum/2004 vide paras 9 to 11. This position is admitted in the chart also and accordingly we decide this issue against the assessee. 14.1 Similarly, compensation for amount received on surplus of assets can also be not related to the business of export and, therefore, the same is also decided against the assessee. 14.2 As far as the issue regarding CST reimbursement is concerned, the ld. counsel of the assessee pointed out that similar issue has been decided in favour of the assessee vide para 11.1 in ITA No.9329/Mum/2004. 15. On the other hand, the ld. D.R. submitted that this issue has been decided by the Hon'ble Bombay High Court in the case of CIT vs. Dresser Rand India Pvt. Ltd. (2010) 323 ITR 429 (Bom). 16. In the rejoinder, the ld. counsel of the assessee submitted that the issue involved in the present appeal is little different. It is not a case of sales-tax refund which was before the Hon'ble Bombay ....