TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 846
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....ANUBHAV SHARMA, J. M.: 1. These are the appeals and cross objections arise of the orders even dated 25.03.2009, 26.03.2009 passed by CIT(A), for Assessment Years 1990-91 to 1993-94. ITA No. 2339/Del/2009 (A.Y.: 1990-91) and ITA No. 2355/Del/2009 (A.Y.: 1990-91) 2. Facts in brief of the case are that the assessee is a non-banking finance company (NBFC), carrying on business of running financial schemes and had filed its return for which original assessment was completed u/s 143(3) of the Act and subsequently revised u/s 154 of the Act. The assessment for AY 1990-91 was reopened vide notice issued u/s 148 of the Act on following grounds:- "i). the assessee company had kept throughout the year average funds of approximately Rs.8,75,74,40....
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....eiving its dues. During the previous year, the agent collected Rs.4,95,84,387/- as 'service charges' from depositors but did not remit it to the assessee i.e. the amount was appropriated by the former. (ii). The assessee collected deposits amounting to Rs. 50,13,52,752/- during the previous year in its various financial schemes. It was a statutory requirement that the particulars of each loan or deposit of Rs.20,000/- or more taken or accepted by the assessee prescribed form had to be furnished in the Tax Audit Report (Colun 10). But the same was not furnished by the auditors. (iii). Even in the course of assessment proceedings, this information about deposits was not furnished. In course of assessment proceedings for subseque....
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....t of unexplained deposits u/s 68 of the IT Act, 1961. 3. Whether on the facts and in the circumstances of the case, the CIT(A) was correct in deleting the disallowance of interest of Rs.3,54,46,701/- as contingent and unascertained liability, being the interest bearing funds lying with the agent as interest free. 4. Whether on the facts and in the circumstances of the case, the CIT(A) was correct in deleting the addition of Rs.10,49,477/- relating to disallowance of reimbursement of expenses. 5. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) was correct in deleting the addition of Rs.4,95,84,337/- made on account of Service Charges. The appellant craves leave to add, amend any/all the ground of appeal before ....
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....der stands annulled/set aside. 3. That once the ld. CIT(A) has deleted the addition made on account of service charges he is not justified in restoring back the same to the file of the Assessing Officer for quantum allowability as held in para 13 of the appellate order." 7. Heard and perused the record. 8. Arguing on the additional grounds which go to the root of jurisdiction of the reopening, the ld DR submitted that the ld CIT(A) has fallen an error in observing that there was illegal exercise of reopening powers and Ld. CIT(A) was unmindful of the fact that the reasons of second reopening were different. There was concealment of special audit and the issue with regard to special audit should have been taken into consideration by the ....
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....those raised earlier. The aforesaid reproduction of reasons show that merely by wording the reasons differently ld AO had tried to invoke the jurisdiction of reassessment. The fundamental question in earlier assessment was the analysis of the income occurring form the deposits collected through its agent. Once the additions from were made in original assessment and re-examined in reassessment proceedings, the same could not have been subject matter of reasons to believe by merely expending the scope of enquiry of the manner and nature of deposits collected by the assessee. 12. The order of the ld CIT(A) reflects that he had duly taken into consideration all the legal aspect of the issue with regard to reopening while sustaining the submiss....
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....3-94 at page No. 707-711 of the paper book in Volume-II, III and IV respectively, it can be observed that similar to the reasons for reopening for Assessment Year 1990-91 as discussed above, the reopening was in regard to issues already examined and artificially expanding the scope of enquiry on the manner and nature of deposits collected by the assessee. Ld. CIT(A) inspite of appreciating the submissions of assessee failed to benefit the assessee by deciding the grounds in favor of the assessee. 15. In regard to ITA NO. 2358/Del/2009, for AY 1993-94, it can be observed that there is an additional legal issue, of questioning the reopening being barred by limitation provide u/s 149 of the Act as notice was issued on 02.06.2001 i.e. after ex....