TaxTMI 
TaxTMI 
2018 (7) TMI 1172
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....baa to Section 80 HHC is applicable for tyre retreating charges? (4) Whether the Assessing Officer is entitled to restrict the depreciation of the actual cost by invoking Section 43(1)(3)? (5) Whether the excise duty and sales tax form part of the turnover for the purpose of deduction under Section 80 HHC? (6) Whether the net amount or the other income has to be excluded from the profits of business for the purpose of Section 80 HHC? 3.In this batch of appeals though six substantial questions of law have been framed, what we are required to decide is the first question as framed in Tax Case (Appeal) Nos.1313 to 1324 and 1326 and 1327 of 2007, viz., whether the Assessing Officer is empowered to reopen an assessment based on a subsequent Supreme Court decision? 4.The reason for framing the other five substantial questions of law, is on account of the fact that those questions were raised by the assessee / Department before the Tribunal. Since the Tribunal decided the question relating to jurisdiction of the officer to reopen the proceedings, both in respect of reopening of assessment done beyond the period of four years and those done within the period of four years, the Dep....
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....ble for Tyre Retreading Charges * Q 3 * Q 3 * Q 3 * Q 3 4 . Restrict Depreciatio n of actual cost by invoking 43(1)(3) * Q 4 * Q 4 5 . ST ED receipts to be excluded in TTO - 80HHC [@66 $2 in TCA 860 to 863/07 Typed Set] 6 . Net amount of other income has to be excluded from the profits of business for the purpose of Section 80HHC Q 6 [80HH & 80I] Q 6 [80HH ] Q 6 [80H HC & 80I] Q 6 [80H H] Q 6 [80HH C] Q 6 [80HH , 80I & 80IA] Q 6 [80HH C, 80HH & 80IA] 7.Since the substantial questions of law, to be decided in all the appeals, are identical and the factual position is also identical, we take up for consideration the facts relating to the assessment year 1990-91. 8.Before we proceed further, we observe that the appeals are in two batches, viz., one set o....
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....48 of the Act on 08.08.1997. Thus, the respondent / Assessing Officer has not stated as to what are the reasons for reopening the assessment and how he formed an opinion that income chargeable to tax has escaped assessment. Therefore, this is a substantial ground on which the proceedings could have been terminated. 12.Nevertheless, the assessee participated in the proceedings and submitted their response. The Assessing Officer while completing the revised assessment under Section 147, has allowed the deductions under Sections 80 HH and 80 I of the Act. The Revenue, preferred appeal as against the said order before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) noted that the main ground taken is with regard to the validity of the reopening and submitted that despite request from the appellant, the Assessing Officer did not furnish reasons for issuing the notice for reopening. Further, the assessee stated that there was no failure on their part to disclose any material and it was a change of opinion and they relied as many as 18 judgments of the Hon'ble Supreme Court and the High Courts in support of their stand. 13.The CIT(A) after considering the submissions o....
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....ssessee has claimed deduction under Sections 80 HH and 80 I of the Act. The Tribunal held that though a case can be reopened under Section 147/148 when a decision is ignored by the Assessing Officer in the light of the decision of the Hon'ble Supreme Court in ITO vs. Sharadbhai M. Lakhani reported in 243 ITR 1 (SC), but the same is not applicable to the cases on hand, because the decision itself was rendered under a different Act. Further, it held that Sharadbhai M. Lakhani (supra) was based on the decision of the Supreme Court in A.L.A. Firm vs. CIT reported in 189 ITR 285, and accordingly, distinguished the decision in those cases. 16.The Tribunal also referred to the decisions in the cases of Parashuram Pottery Works Co. Ltd. vs. ITO reported in 106 ITR 1 (SC); Calcutta Discount Co. Ltd. vs. ITO reported in 41 ITR 191; and the decision of this Court in Fenner India Ltd. vs. DCIT reported in (2000) 241 ITR 627 (Mad.) and after referring to Section 147 as well as the decision in the case of CIT vs. Kelvinator of India Ltd. reported in 256 ITR 1, held that the reopening was not sustainable and the reopening was mere change of opinion. 17.Mr.T.R.Senthil Kumar, learned Senior S....
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...., which was clearly in favour of the assessee. 22.Further, it is submitted that reopening could not have been made based upon the decision of the Division Bench, which was rendered subsequently. In support of such contention, reliance was placed on the decisions in the case of CIT vs. Baer Shoes (India) (P). Ltd. reported in (2011) 331 ITR 0435 (Madras) and in the case of DCIT vs. Simplex Concrete Piles (India) Ltd. reported in [2013] 358 ITR 129 (SC). 23.Heard the learned counsels for the parties and carefully perused the materials placed on record. 24.The short question, which falls for consideration, is whether the reopening of the assessments both within four years and beyond four years could have been done for the reasons assigned by the Revenue. We are required to take a decision in respect of the other substantial questions of law, after deciding the first question and if this question is answered in favour of the Revenue, then we may be required to examine the other substantial questions of law. However, if we answer the said question in favour of the assessee, then nothing further remains to be decided in these appeals. As pointed out in the preceding paragraphs, the As....
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....ranted the benefit of deduction and therefore, the Revenue had to file appeals before the CIT(A). On a reading of the assessment orders passed under Section 143(3) dated 18.03.1993, it is clear that there has been discussion between the assessee and the Assessing Officer and all materials have been placed before him and then the assessment has been completed granting benefit. Therefore, the order of assessment cannot not be stated to be an order without application of mind. 30.Thus, we come to the last and most important question to be decided, as to whether reopening of an assessment could be done based upon the decision in the case of Madurai Pandian Engineering Corporation Ltd (supra). As mentioned by us earlier, the decision was rendered by the Division Bench of this Court on 02.03.1998. Till such date, the decision of the Tribunal was in favour of the assessee. Apart from that, the Calcutta High Court in Kalsi Tyre (supra) has decided that business of retreading tyres is an industrial company within the meaning of Section 2(6)(d) of the Finance Act, 1968. The said decision was rendered in the year February, 1981. Thus, the law, which stood as on 02.03.1998, was in favour of t....