TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1147
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....see company in industrial property by making the calculation of the share of the assessee company at 20%. 2.1 Subsequently, notice u/s 148 of the Act dated 10.03.2017 was issued after recording the following reasons: Reasons recorded for re-opening of case u/s 147 of the I.T. Act, 1961 Name of assessee M/s Valco Industries Limited Address 27, Madhya Marg, Sector 26, Chandigarh PAN AAACV5195J Status Company Assessment Year 2012-13 Previous Year 2011-12 The original assessment in this case was made u/s '43(3) of the Income Tax Act, 1961 at income of Rs, 8,07,03,620/- by making an addition of Rs. 3,23,20,000/- in returned income of the assessee. The assessee company has two manufacturing units, Unit No-I is located at 184, Industrial Area, Phase-I, Chandigarh, which was set up in the year 1998 and the Unit Noll is located at Village Katha, Baddi setup in year 2004, The assessee is in the business of manufacturing of various types of aluminum products and availed deduction u/s 80IC in respect of Unit No-II Baddi. 2. The case of the assessee was completed on the basis of findings of a survey conducted u/s 133A at the business premises of the assessee o....
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....hat the assessee has claimed 100% deduction of the profit & gains derived by the undertaking/enterprises (Unit No-II, Baddi) from the eligible business at Rs. 5,84,94,739/-, whereas as per the above detailed discussion the assessee was eligible for only 30 % deduction at Rs. 1,75,48,422/-. Therefore, I have reason to believe that assessee has claimed excessive deduction u/s 80IC and income of Rs.4,09,46,317/- has been escaped assessment as per provisions of section 147 of the Income Tax Act, 1961. 6. Further, it is again clarified that I have gone through the complete case records and the perused the details available and I am satisfied that this is a fit case to issue notice u/s 148 as the amount of Rs.4,57,79,317 (Rs.48,43,000 + Rs.4,09,46,317/-) has not been offered for tax. Therefore, in view of the above, I have reason to believe that the amount of Rs.4,57,79,317/- has escaped assessment within the meaning of Section 147 of the Income Tax 1961." 2.2. In response to the notice issued u/s 148 of the Act, the assessee intimated the Assessing Officer (AO) that the return already filed u/s 139(1) of the Act may be treated as return in response to notice u/s 148 of the Act and al....
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....n such a mechanical approval is illegal, arbitrary and unjustified. 5. Without prejudice to the above, the Ld. Commissioner of Income tax (Appeals) has erred in upholding the addition of Rs.48,43,000/- taking share in the property at 23% as against 20% which is arbitrary and unjustified. 6. That the Ld. Commissioner of Income Tax (Appeals) has further erred in law as well as on facts in upholding the addition of Rs.4,09,46,317/- made by restricting the deduction claimed under section 80IC to 30% as against 1 00% claimed by the assessee which is arbitrary and unjustified. 7. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 8. That the order of the Ld.CIT(A) is erroneous, arbitrary, opposed to the facts of the case and thus untenable." 3.0. At the outset the Ld. Authorized Representative submitted that ground Nos.3, 4 and 5 were not being pressed. Accordingly, these three grounds are dismissed as not pressed. 3.1. The Ld. Authorized Representative submitted that ground Nos. 1 and 2 challenge the reopening of the already completed assessment by issuance of notice u/s 148 of the Act, whereas ground No.6 ....
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.... of the Act and were already on record. It was argued that at no point of time there was a doubt in the mind of the AO, at the time of the original assessment proceedings, with regard to the date of substantial expansion. The Learned Authorized Representative also submitted that it is settled law that the assessees are entitled to deduction u/s 80IC of the Act @ 100% for the first five years even in case of substantial expansion and he placed reliance on plethora of judicial precedents in this regard. It was submitted that, therefore, once the AO had duly examined the claim of the assessee during the course of original assessment proceedings, revisiting the same issue again was a mere change of opinion as all the necessary evidences and explanations had already been examined and veted by the AO during the course of original assessment proceedings and that he, only after being duly satisfied, had accepted the assessee's claim at that point of time. It was submitted that there was not fresh or cogent material available with the AO at the time of recording of reasons which would empower him to issue notice u/s 148 of the Act. It was submitted that, therefore, reopening of the assessme....
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.... Referring to the order passed by the ITAT against the order passed u/s 263 of the Act in assessment year 2013-14, the Ld.CIT DR submitted that no factual finding had been recorded by the ITAT and, therefore, the issue of initial assessment year for substantial expansion was still debatable. It was submitted that by taking the initial assessment year as 2007-08 for substantial expansion, the assessee's claim for deduction u/s 80IC of the Act in the present assessment year i.e. assessment year 2012-13 had rightly been curtailed to 30% instead of 100% as claimed by the assessee. While supporting the order of the Ld.CIT(A) the Ld.CIT DR argued that the Ld.CIT(A) had rightly dismissed the assessee's appeal on the legal grounds as well as on merits. 5.0. We have heard the rival submissions and have also perused the material available on record. We have also gone through the copy of reasons recorded for reopening of the case and have also gone through the objections raised by the assessee in this regard as well as the order of the AO rejecting the objections. The basic question for us to consider is whether the assessee's allowance of claim of deduction u/s 80IC of the Act can be revisi....
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.... there was any suppression of any material information on the part of the assessee which would justify the invocation of jurisdiction u/s 147 of the Act especially when the AO had already examined the claim of the assessee regarding deduction u/s 80IC of the Act in the original assessment order passed u/s 143(3) of the Act However, inspite of assessee's challenge to the assumption of jurisdiction u/s 148 of the Act, the Ld.CIT(A) chose to ignore its submissions and went ahead with upholding the same totally ignoring the fact that when he had passed the impugned order on 31.08.2021, the order of the Tribunal dated 14.06.2019 for assessment years 2010-11 and 201314 had already been pronounced wherein the assessee's claim for deduction u/s 80IC of the Act @ 100% had been accepted by the Tribunal and also by the Department in as much as there was no further appeal by the Department against this order of the Tribunal. If the assessee's claim for deduction is held to be allowable in assessment year 201314, there is no reason why the assessee's claim is not allowable in assessment year 2012-13 (i.e. the year under appeal) when the Statute specifically provides allowance of claim of deduct....
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.... and on a reasonable view. 5.5 A three judge Bench of the Hon'ble Apex Court in Commissioner of Income Tax, Delhi v. Kelvinator of India Ltd. reported in 1993 Supp(1)SCR 28 after considering the previous decisions, re-stated the correct position as follows: "5....where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe"..... Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. 6. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. 7. One must treat the concept of "chan....