TaxTMI 
TaxTMI 
2018 (7) TMI 1172
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....f Section 80 HH, 80 I and 80 IA? (3) Whether explanation 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 do....
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....p; Q 2 [80H H & 80I] Q 2 [80HH & 80I] Q 2 [80H H, 80I & 80IA] Q 2 [80HH , 80I & 80IA] Q 2 [80H H, 80I & 80IA] Q 2 [80HH, 80I & 80IA] Does not arise At pg 133 of Typed set The Tribunal annulled the reassessment proceedings and had not gone into other grounds on merits in Assessee's and dismissed Department appeals without going into any of the other grounds raised. 3 . Explanation "baa" to section 80HHC whether applicable 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] ....
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....assessment was completed and the benefit was extended to the assessee. These assessments were reopened pursuant to a notice under Section 148 of the Act dated 08.08.1997. 11.Both the Department as well as the assessee have filed paper books containing the assessment orders, Orders-in-Appeal etc., but the paper books do not contain the reasons for reopening required to be recorded in terms of Section 147 of the Act. Therefore, we perused the revised assessment orders dated 05.03.1999 for the assessment years 1990-91. The Assessing Officer states that the original assessment under Section 143(3) of the Act was completed on 18.03.1993 and the same was revised on 21.07.1993 and to consider certain points, the assessment was reopened with the prior permission of the Commissioner of Income Tax by issue of notice under Section 148 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 i....
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....0 HH and 80 I of the Act. In this regard, the Tribunal relied on the decisions of the Apex Court in the cases of CIT vs. Sun Engineering Works Pvt. Ltd. reported in 198 ITR 297 (SC) and Padmasundara Rao (Decd.) and Others vs. State of Tamil Nadu reported in 255 ITR 147 (SC). Therefore, it held that it cannot be said that the case of P.C.Cherian (supra) was applicable to cases arising under Sections 80 HH and 80 I of the Act in the case of tyre retreading business. 15.Further, the Tribunal agreed with the submissions of the counsel for the assessee that from a perusal of the decision in Madurai Pandian Engineering Corporation Ltd (supra), that references were made by the Department in Tax Case Nos.1820 to 1821 of 1986, which means, the issue was decided in favour of the assessee by the Tribunal and following those decisions, the assessee 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 ....
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....ted in (1981) 131 ITR 0636 (Cal.), held that retreading activitiy is processing akin to an industrial or manufacturing activity. 21.In the case of Sixth Income Tax Officer vs. General's New Tread reported in 13 ITD 460 (SB), the Bangalore Bench of the ITAT held that the assessee, who produced an article by retreading, was entitled to investment allowance. It is submitted that the appeals filed before this Court in the case of Madurai Pandian Engineering Corporation Ltd (supra), are by the Revenue and those appeals were filed in the year 1986 and decided by this Court in favour of the Revenue on 02.03.1998. Thus, it is submitted that till the Division Bench decided the substantial question in favour of the Revenue in the case of Madurai Pandian Engineering Corporation Ltd (supra), on 02.03.1998, the decision of the Tribunal held the field, 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....
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....the submission of the learned Senior Standing Counsel for the Revenue. 28.With regard to the decision in the case of Honda Siel Power Products Ltd. (supra), we find that the said decision is wholly inapplicable to the facts and circumstances of the present case. In Girilal & Co. (supra), the issue was with regard to valuation of a property and the Court found that the assessee failed to truly disclose the exact size of the plot and this information was available only in the valuation report. Therefore, the Court held that Explanation 2(c)(iv) of Section 147 of the Act will apply. The said decision can have no application to the facts of the present case, as there is no allegation, that the assessee withheld the information from the Assessing Officer. 29.One more submission, which was made, was that the Assessing Officer without application of mind, had granted 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 t....