IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "G", MUMBAI
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER
ITA No. 1220/Mum/2011
Assessment Year: 2005-06
Meera Cotton & Synthetics DCIT 9(2)
Mills P. Ltd. Mumbai
301 Dwarkesh, Subhash Vs.
Cross Lane, Kandivali (W)
Mumbai 400 067
PAN: AABCM 8385 J
(Appellant) (Respondent)
Assessee by Shri Vijay Mehta & Govind
:
Javeri
Revenue by : Smt. Parminder
Date of hearing : 25.08.2014
Date of Pronouncement : 25.08.2014
ORDER
PER Dr. S.T.M. PAVALAN, JM:
This appeal filed by the assessee is directed against the order of the
Ld.CIT(A) -20, Mumbai dated 27.12.2010 for the Assessment Year 2005-06.
2. In this appeal, the assessee, among other things, has agitated the decision of
the Ld.CIT(A) confirming the assessment made by the AO u/s 143(3) r.w.s 147 of
the Income Tax Act.
3. Briefly stated, the assessee, a private company engaged in the business of
production of texturised yawn, knitted fabrics and woven fabrics, in its return of
income had declared a total income of Rs.81,04,562/- u/s 115JB of the Income Tax
Act. Thereafter, the assessee received a notice dated 01.05.2008, bearing No. DCIT-
9(2) rectification/07-08, informing the assessee that the deduction u/s 80IB of
Rs.66,67,566/- will be disallowed because the quantum of deduction was not stated
in form 10CCB as submitted with the copy of the return. The said notice further
stated that the assessee had reduced its book profit by Rs.47,03,675/- by charging
ITA No. 1220/Mum/2011
2 Meera Cotton & Synthetics Mills P. Ltd.
Assessment Year: 2004-05
the same to the book profit of the company as deficit in depreciation on change of
the method of providing depreciation. The assessee, vide its letter dated 06.05.2008,
submitted its contentions as to why the proposals of the AO were not valid and had
contended that the proposed action of the AO was not in consonance with provisions
of sections 115JB and 80IB of the Act. Further, the AO issued a notice u/s 148
reopening the said assessment on the same grounds as stated in the notice for
rectification. Consequently, the AO finalized the assessment u/s 147 by disallowing a
sum of Rs.66,67,566/- u/s 80IB of the Act and also increased the book profit of the
assessee by disallowing a sum of Rs.47,03,675/- as deficit in depreciation due to
change in the method of providing depreciation. In the process, the assessee was
assessed to a total income of Rs.66,77,566/- under the normal provisions and a sum
of Rs. 21,89,336/- was raised as tax payable by the assessee. On appeal, the
Ld.CIT(A) confirmed the reopened assessment and aggrieved by the impugned
order, the assessee is in appeal before us.
4. Having heard both the sides and perused the material on record, it is not
disputed that the notice of rectification u/s 154 and the notice for reopening u/s 148
have been issued on the same ground. When the action initiated for rectification has
been pending, by AO sent the notice for reopening of the assessment also. In this
connection, it is pertinent to mention that the Tribunal, in the case of M/s. Jet Speed
Audio Pvt. Ltd. in ITA No. 8424/Mum/2011, vide its order dated 22.06.2012, to
which the present Accountant Member is also a party, has held that after initiating
the proceedings u/s 154, the action of AO to subsequently issue notice u/s 148 is
bad in law as there is no evidence that proceedings initiated u/s 154 are concluded
or communication to that effect has been sent to the assessee. For the said decision,
the Tribunal has relied on the earlier decision of the Tribunal in the case of Mahinder
Freight Carriers Vs. CIT, 129 ITD 278. In view of the fact that the said decisions are
squarely applicable to the case of the assessee wherein similar facts are involved,
following the said order, we over turn the order of the Ld.CIT(A) and quash the
assessment order passed by the AO u/s 143 r.w.s.147 of the Act. Since, we have
quashed the re-assessment order passed u/s 147, we do not find it necessary to
ITA No. 1220/Mum/2011
3 Meera Cotton & Synthetics Mills P. Ltd.
Assessment Year: 2004-05
deal with the other issues pertaining to the validity of additions raised by the
assessee.
5. In the result, the appeal filed by the Assessee is allowed.
Order pronounced in the open court on this 25th day of August, 2014.
Sd/- Sd/-
(N.K. BILLAIYA) (Dr. S.T.M. PAVALAN)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 25.08.2014
*Srivastava
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The CIT(A) Concerned, Mumbai
The DR "G" Bench
//True Copy//
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.
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