Income Tax Appellate Tribunal - Chennai
Ttk Health Care Limited, Chennai vs Department Of Income Tax on 25 November, 2008
IN THE INCOME TAX APPELLATE TRIBUNAL
BENCH "B" CHENNAI
(Before Shri Pradeep Parikh, Vice-President and
Shri George Mathan, Judicial Member)
.....
I.T.A. No.369/Mds/2009
Assessment Year : 2000-01
The Dy. Commissioner of Income- M/s. TTK Health Care Ltd.,
tax, Company Circle-III(4), 6, Cathedral Road,
Chennai. v. Chennai-600 006.
PAN : AABCT3312J
(Appellant) (Respondent)
Appellant by : Shri P. B. Sekaran
Respondent by : Shri R. Vijayaraghavan
O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER :
This is an appeal filed by the Revenue against the order of the learned CIT(Appeals)-III, Chennai in appeal No. 546/07-08/A-III dated 25-11-2008 for the assessment year 2000-01.
2. Shri P.B. Sekaran, learned CIT(DR) represented on behalf of the Revenue and Shri R. Vijayaraghavan, Advocate represented on behalf of the assessee.
3. At the outset it was submitted by the learned authorized representative of the assessee that the assessee has filed a petition under Rule 27 of the ITAT Rules wherein as a respondent the assessee proposed to support the order of the learned CIT(A) on the ground that the re-opening is without jurisdiction. It was the submission that the issue of re-opening has been raised before the 2 ITA No.369(/Mds/2009 learned CIT(A) and the same has been held against the assessee. However, on merits the additions made have been deleted. It was the submission that against the deletion of the additions on merits the Revenue has filed the appeal. It was the submission that as the issue of re-opening goes to the root of the assessment, the same may be heard.
4. In reply the learned DR did not raise any serious objection. In the circumstances the petition filed under Rule 27 of the ITAT Rules is admitted and the issue of reopening is also permitted to be raised by the assessee.
5. It was submitted by the learned authorized representative that the assessee had originally filed its return of income for the assessment year 2000- 01 on 30.11.2000 admitting the total income as 'Nil'. The assessment had originally been completed u/s 143(3) of the Income-tax Act, 1961 on 18.3.2003 wherein the total income assessed at nearly Rs. 8 crores. It was the submission that certain additions in the form of non-compete fee received from London International Group Plc (LIG) had been disallowed. Similarly, deferred advertisement expenditure had been disallowed. Unpaid bonus had been disallowed. Disallowance was also made under section 14A in respect of the expenditure for generating the dividend income. It was the submission that subsequently on 29.3.2007, i.e. much after the 4 year period, notice u/s. 148 had been issued and the assessment order under sec. 143(3) read with section 147 had been passed on 31.12.2007 wherein various additions had been made 3 ITA No.369(/Mds/2009 representing difference in opening stock, excess grant of depreciation and subsidy received by the company. It was the submission that the set off of business loss in respect of M/s. TTK Biomed Ltd. had also not been allowed. The learned authorized representative drew our attention to page 2 of the assessment order dated 31-12-2007 which he said were the reasons for reopening the assessment. The same is as follows :
"M/s. TTK Health Care Ltd. took over the business of TTK Biomed Limited under the scheme of amalgamation and the appointed date was 1.7.1999. While examining the records for this assessment year the following points have been identified:
1. The company adopted the opening stock of TTK Biomed Limited as on 1.4.1999 instead of the stock as on 1.7.1999 (the date on which M/s. TTK Biomed Limited got amalgamation with the assessee company) resulting in under assessment of Rs. 6,91,58,608/-.
2. Excess grant of depreciation on plant and machinery transferred by TTK Biomed Limited to the assessee company is to the extent of Rs. 5,51,303/-.
3. Subsidy received by the company being Rs. 1,52,760/- was not assessed to tax.
The amalgamating company TTK Biomed was manufacturing medical devices, condoms and latex gloves. TTK Biomed transferred the business of manufacture of medical devices on 30-9-1996 to TTK Maersk Limited for Rs. 21 crores. As part of the business has already been sold, the unabsorbed 4 ITA No.369(/Mds/2009 business loss and depreciation relating to the business of TTK Biomed cannot be carried forward and set off in the case of the assessee M/s. TTK Health Care Services Limited."
6. In respect of the first issue of reopening being that the company had adopted the opening stock of TTK Biomed Ltd. as on 1.4.1999 instead of the stock as on 1.7.1999 being the date on which TTK Biomed Ltd. got amalgamated with the assessee company, the learned authorized representative drew our attention to page 77 of the paper book filed by the assessee which was the copy of the Schedule 7 to the Balance Sheet of TTK Biomed Ltd. for the period ended 30-06-1999 wherein the current assets, more specifically the inventories have been valued at Rs. 6,91,58,608/-. It was the submission that this was the figure which was adopted by the assessee as on 1.7.1999 and there was no error in the adoption of the opening stock of TTK Biomed Ltd. after amalgamation. He further drew our attention to page 4 of the assessment order dated 31.12.2007 to show that the AO had erroneously taken the figure of Rs. 6,91,58,608/- as on 1.4.1999 whereas the figure as on 30.6.1999 was Rs. 6,91,58,608/-. It was the submission that the learned CIT(A) had also considered the submissions and had deleted the addition in page 9, para 7.5 of his order. It was also the submission that all the particulars have also been disclosed in the return filed and as the AO had not shown that there was a failure on the part of the assessee to disclose 5 ITA No.369(/Mds/2009 fully and truly all material facts necessary for the assessment, the reopening after the expiry of 4 years was bad in law.
7. In respect of the second reason which was the excess grant of depreciation, it was the submission that the AO had failed to appreciate that the depreciation had been calculated by applying the fifth proviso to section 32(1) and consequently as per the said proviso the depreciation relatable to TTK Biomed Ltd. for the 3 months period was apportioned to the accounts of TTK Biomed and only the balance had been claimed by the assessee. He drew our attention to the order of the learned CIT(A) in page 11 wherein the working of the depreciation had also been quantified and shown. It was the submission that the reason as recorded by the AO on this count was also wrong.
8. In respect of the third reason being the subsidy received to an extent of Rs. 19,52,760/- it was the submission that the assessee had not received any subsidy and the subsidy which was being talked about was the subsidy received during 1982-83, 1990-91 and 1991-92 by M/s. TTK Biomed Ltd. and which was recorded in the Balance Sheet of TTK Biomed Ltd. as subsidy. It was the submission that after the amalgamation the Balance Sheet of TTK Biomed Ltd. the capital reserves lying in the Balance Sheet of TTK Biomed Ltd. have been taken over by the assessee and shown under the head 'Capital Reserves'. It was the submission that the learned CIT(A) had also verified the same and had given 6 ITA No.369(/Mds/2009 a finding in page 13 para 9.7 of his order and consequently this reason for reopening the assessment was also invalid.
9. In respect of the fourth reason being the carried forward of depreciation and business loss of TTK Biomed Ltd. it was the submission that as per section 72 amended with effect from 1.4.2000 the continuation of the same business had been omitted with effect from 1.4.2000 and consequently the carried forward unabsorbed depreciation and business loss was liable to be allowed in the hands of the assessee. It was the submission that the provisions of section 72A had not been invoked by the AO for the purpose of reopening and consequently the provisions of section 72A could not be considered. It was the further submission that in view of the decision of the Hon'ble Madras High Court in the case of CIT v. A.V. Thomas Exports Ltd. reported in 296 ITR 603 (Mad) wherein the Hon'ble High Court had held that since there was no finding by the AO that there was any failure on the part of the assessee resulting in the escapement of income, the reopening was liable to be quashed. It was the submission that similar was the view of the Hon'ble Delhi High Court uin the case of Haryana Acrylic Manufacturing Co. v. CIT & Another reported in 220 CTR 450 (Del). It was the submission that in the said decision it was held that there was no whisper in the reasons supplied to the assessee that income escaped assessment by reasons of the assessee's failure to make a full and true disclosure of all material facts necessary for assessment and consequently, the 7 ITA No.369(/Mds/2009 notice issued u/s. 148 beyond the 4 years from the end of the relevant assessment year was barred by limitation and hence without jurisdiction. Thus it was the submission that there was no mention in the reasons recorded for reopening that the assessee had not made a true and full disclosure the reopening was liable to be quashed. It was the further submission that in the original assessment passed on 18.03.2003 the issue of brought forward losses of amalgamating company TTK Biomed Ltd. had been considered and as the details of the brought forward losses were not available the same had been disallowed subject to verification. It was the further submission that the same had also been verified and an order u/s. 154 was passed on 13.08.2003 granting the assessee set off of unabsorbed depreciation and business loss of M/s. TTK Biomed Ltd., the amalgamating company. It was thus submitted that all necessary materials for completing the assessment had been placed before the AO at the time of original assessment itself and there being no allegation of non- disclosure of true and material facts by the assessee for the completion of the assessment, the reopening by issue of notice under section 148 on 29.3.2007 was liable to be quashed.
10. In reply, the learned DR submitted that the details were not properly disclosed. It was the submission that the fact that in the course of original assessment the AO had mentioned that the brought forward losses of the amalgamating company TTK Biomed Ltd. was disallowed and would be 8 ITA No.369(/Mds/2009 considered after getting the records from the erstwhile AO of TTK Biomed Ltd. showed that all the necessary material facts were not before the AO while completing the original assessment. It was the further submission that the rectification order passed itself showed that the necessary material had to come from the AO of TTK Biomed, Mumbai and the assessee was unable to produce all the details necessary. It was the further submission that the provisions of section 72 was controlled by the provisions of Sec. 72A and insofar as sec. 72A relates to the carried forward and set off of accumulated losses and unabsorbed depreciation allowances on amalgamations or de-mergers and had contained the non obstante clause "notwithstanding anything contained in any other provisions of this Act". It was the submission that the reopening was valid at least in respect of the fourth issue being the carried forward of depreciation and business loss.
11. In reply the authorized representative submitted that the reason recorded did not show that section 72A was being invoked.
12. In respect of the departmental appeal the Revenue has raised the following grounds:
"1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case.9
ITA No.369(/Mds/2009 2.1 The learned CIT(A) erred in directing the assessing officer to allow the set off of losses/unabsorbed depreciation of M/s. TTK Biomed Ltd.
2.2 The learned CIT(A) failed to consider the order of the Central Board of Direct Taxes in F.No. SA/2005A and PAC-I dated 28.5.2007 by which the assessee is not entitled for the set off of loss/depreciation of M/s. TTK Biomed Ltd. since the assessee has not complied with the provisions of section 72A.
3.1 The learned CIT(A) erred in directing the assessing officer to allow deduction of opening stock of Rs. 6,91,58,608/- allegedly with M/s. TTK Biomed Ltd. as on 1.7.1999.
3.2 The learned CIT(A) erred in accepting existence of stock merely on the basis of account statement furnished by ITO, Mumbai without allowing the officer to examine the record of the amalgamating company. 3.3 The learned CIT(A) erred ought to have seen that the TTK Biomed Ltd. had before its merger sold the manufacture of medical devices to TTK Maersk Medical Ltd. to Rs.21 crores by agreement dated 30.9.1996 and only part of the assets were taken over by the assessee. Subsequently the assessee also entered into agreement with London Internation Group for transfer of condom manufacturing business and received Rs. 3.44 crores as non compete fee. The learned CIT(A) ought to have come to a decision only on examination of those agreements.10
ITA No.369(/Mds/2009
4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A)m may be set aside and that of the Assessing Officer restored."
It was submitted by the learned DR that in respect of grounds No. 2.1 and 2.2. being against the order of the learned CIT(A) in directing the AO to allow the set off of the losses/unabsorbed depreciation of M/s. TTK Biomed Ltd., the assessee had made an application to the CBDT for the relaxation of the conditions of section 72A(2)(b)(iii) of the Income-tax Act, 1961 read with Rule 9C(a) of the Income-tax Rules, 1962 on 29-03-2005. It was the submission that the said petition of the assessee had also been rejected. It was the submission that as per section 72A the business of the amalgamating company should continue and as per Rule 9C the assessee should manufacture or produce the articles to the extent of at least 50% of the installed capacity. The learned DR drew our attention to the chart at page 18 of the order of the learned CIT(A) in respect of the production details to show that out of 5 years after take over the assessee had not complied with the provisions of Rule 9C and after amalgamation the assessee company had not maintained the 50% level production of the installed capacity. It was the submission that as there 11 ITA No.369(/Mds/2009 was violation of the provisions of Rule 9C the assessee was not entitled to the set off of the carried forward losses and unabsorbed depreciation.
13. In reply the learned authorized representative submitted that the disallowance of the carried forward of the unabsorbed depreciation and business losses, if any, on account of the violation of Rule 9C would have been done only at the end of the 5 years from the date of amalgamation. It was the submission that the set off should have been permitted for the first year and the disallowance, if any, could have been considered only in the fifth year. For this proposition he relied upon the decision of the Madras High Court in the case of CIT v. Kumudam Endowments (242 ITR
159) wherein in respect of exemptions in respect of charitable and religious trusts it had been held by the Hon"ble High Court that the time limit for disinvestment in shares by charitable trust had been allowed till 31-3-1993 even though the amendment had been done by the Finance Act, 1992 to have retrospective effect from 1.4.1983. The Hon'ble High Court had held that for the assessment year 1986-87 though the assessee was holding the investments contrary to section 11(5), till such time for disinvestment was available upto 31.3.1993 the exemption could be denied. It was the submission that the assessee had attained manufacturing at 50% of the installed capacity during the third and fourth year and consequently the carried forward and set off of the unabsorbed 12 ITA No.369(/Mds/2009 depreciation and business loss in respect of the amalgamating company, TTK Biomed Ltd. was liable to be allowed. It was the alternate submission that if the unabsorbed depreciation and business loss was not allowable, then in view of the decision of the Hon'ble Madras High Court in the case of CIT v. Silical Metallurgic Ltd. (324 ITR 29 (Mad) the unabsorbed depreciation was liable to be added to the written down value and depreciation granted thereon.
14. In respect of grounds No. 3.1 and 3.2 the learned DR vehemently supported the order of the AO. It was the submission that the opening stock of TTK Biomed Ltd. as on 1.7.1999 should only be considered.
15. In reply the learned authorized representative submitted that the amount of Rs. 6,91,58,608/- was the value of the opening stock in the hands of TTK Biomed Ltd. as on 1.7.1999 as had been disclosed in the Balance Sheet. He vehemently supported the order of the learned CIT(A).
16. In respect of ground No.3.3 it was submitted that that M/s. TTK Biomed Ltd. had sold the business of manufacturing of medical devices to M/s. TTK Maersk Medical Ltd. before the merger and consequently only part of the assets were taken over by the assessee company on account of amalgamation. It was the further submission that subsequent to the amalgamation the assessee company had also entered into an agreement with M/s London International Group (LIG) for the transfer of the condom 13 ITA No.369(/Mds/2009 manufacturing business and had received Rs. 3.44 crores as non-compete fee which showed that at the time of the amalgamation itself the assessee had no intention to continue with the business of M/s. TTK Biomed Ltd. The learned DR drew our attention to page 3 of the departmental paper book which was the copy of the agreement entered into between LIG and TTK Biomed Ltd. and the assessee in respect of the non-compete fee for not competing in the rubber contraceptives manufactured by M/s. TTK Biomed Ltd. in 2000. It was the submission that as per section 72A, after the amalgamation the assessee should take over and also continue the business of the amalgamating company whereas the fact that non compete agreements have been entered into shows that there was a total intention to discontinue the business and consequently the carried forward and set off of the unabsorbed depreciation and business losses was not permissible.
17. In reply the learned authorized representative submitted that the non-compete fee was payable to the amalgamating company and consequently the same could not be held against the assessee. He vehemently supported the order of the learned CIT(A).
18. We have considered the rival submissions. At the outset it may be mentioned here that the reasons recorded for reopening the assessment are not placed before us. The paragraphs referred to in the assessment 14 ITA No.369(/Mds/2009 order which have been extracted above are not mentioned by the AO as reasons recorded for re-opening the assessment. They have been recorded as the issues which were noted and due to which income chargeable to tax has escaped assessment. In these circumstances the submission that there is no finding of the AO in the reasons recorded that the assessee has not truly and fully disclosed all material facts for the purpose of its assessment, the ground taken no more survives and the same is rejected. Here we may also mention that it is not the claim of the assessee that the reasons recorded have not been provided to the assessee.
19. Now we will consider each of the issues which have been raised by the AO, the first being that the company has adopted the opening stock of TTK Biomed Ltd. as on 1.4.1999 instead of the stock as on 1.7.1999 resulting in under assessment of Rs. 6,91,58,608/-. A perusal of the Balance Sheet and Schedule 7 thereto of TTK Biomed Ltd. as on 30.6.1999 clearly shows that the closing balance shown is as on 30.6.1999 at Rs. 6,91,58,608/-. Thus the opening stock as on 1.7.1999 would be at Rs. 6,91,58,608/-. In the circumstances we are of the view that the assessee has adopted the opening stock of TTK Biomed Ltd. as on 1.7.1999 at Rs. 6,91,58,608/- and such figure is not the opening stock as on 1.4.1999. Therefore the issue as noted in the assessment order 15 ITA No.369(/Mds/2009 being the first issue is held against the Revenue. Consequently, grounds No. 3.1 and 3.2 of the Revenue's appeal stand dismissed.
20. Coming to the second issue being excess grant of depreciation on plant and machinery transferred by TTK Biomed Ltd. to the assessee company to the extent of Rs. 5,51,303/- it is noticed that the assessee has complied with the 5th proviso to section 32. It is also noticed that the learned CIT(A) has brought out the working of the depreciation in page 11 in para 8.8 of his order. This working has also not been disputed by the Revenue. In the circumstances, it cannot be said that income chargeable to tax has escaped assessment on account of the excess grant of depreciation on the plant and machinery transferred by TTK Biomed Ltd to the assessee company. We may also mention here that the learned CIT(A) has deleted the addition made on this count and the Revenue has not preferred any ground against such deletion.
21. Coming to the third issue being the subsidy received by the assessee company of Rs. 19,52,760/- it is noticed that the said subsidy has been received by TTK Biomed Ltd. during the years 1982 and 1991 and the assessee has only after amalgamation shown the same under capital reserves. In the circumstances as the subsidy received are not the income of the assessee for the relevant assessment year the finding of the learned CIT(A) in deleting the same is found to be correct and also the 16 ITA No.369(/Mds/2009 same does not result in escapement of income which gives room for reopening. We may also mention here that the order of the learned CIT(A) in deleting this addition has also been accepted by the Revenue insofar as no ground has been raised against such deletion.
22. Coming to the fourth issue being against the set off of the unabsorbed business loss and carry forward of depreciation relating to the business of TTK Biomed Ltd. it is noticed that the assessee has challenged that section 72 has been considered and section72A has not been invoked by the AO. A perusal of the issues raised by the AO does not show that the AO has considered only section 72 and not 72A. However, when deciding the issue in page 6 the AO has considered only section 72. Further the CIT(A) has considered section72A. Undisputably, the amalgamation of TTK Biomed Ltd. with the assessee company has taken place on 1.7.1999. In 2000 the assessee along with M/s. TTK Biomed and London International Group (LIG) has entered into non-compete agreement whereby both TTK Biomed Ltd. and the assessee has agreed to discontinue the business of manufacture and marketing of rubber contraceptives. This information has not been brought to the attention of the AO while filing its returns. In these circumstances can it be said that the assessee has truly and fully disclosed all material facts necessary for its assessment? The answer would an emphatic "No". Entering into an 17 ITA No.369(/Mds/2009 agreement for non-compete business is in the realm of knowledge of the assessee. The assessee very well knew that after amalgamation the assessee would not be continuing the business of TTK Biomed Ltd. that is being taken over. The intention of the assessee to discontinue the business of manufacture of rubber contraceptives which was being done by TTK Biomed is very clear from the agreement itself. Thus at the time of amalgamation itself the assessee knew that it would be violating the provisions of Rule 9C of the Income-tax Rules, 1962 which would disentitle the assessee for the carried forward and set off of the business loss in respect of TTKL Biomed Ltd. due to the applicability of section 72A. The assessee also very well knew that it has violated the provisions of Rule 9C of the I.T. Rules insofar as on 29-03-2005 the assessee has approached the CBDT with the request for waiver of the conditions under Rule 9C of the I.T.Rules/72A of the I.T.Act and this was also rejected by the CBDT. After the issue of notice u/s.148 on 29.3.2007 the assessee had requested that the return originally filed may be considered as the return in response to the 148 notice after knowing fully well that it had made the request to the CBDT for the waiver of the condition imposed under Rule 9C of the I.T. Rules read with section 72A of the I.T.Act. The fact that the assessee has made the application to the CBDT for the waiver clearly shows that all the material facts necessary for the assessment were not 18 ITA No.369(/Mds/2009 truly and fully placed before the AO in the course of original assessment or in the return originally filed. In the circumstances, the reopening on this count would be valid even though 4 year period has expired on account of the applicability of the proviso to section147. A perusal of the chart as extracted in the order of the learned CIT(A) in page 18 shows as under :
_________________________________________________ "Production Details - Surgeons Gloves:
Period Installed capacity Actual Prodn. Capacity In Million Pcs In Million Pcs July-99 to June-00 30.00 10.14 July-00 to June-01 30,00 14.87 July-01 to June-02 30.00 17.85 July-02 to June-03 30.00 19.96 July-03 to June-04 30.00 2.54"
_________________________________________________ A perusal of the provisions of section 72A read with Rule 9C clearly shows that the 5 years from the date of amalgamation as mentioned in section 72A(2)(iii) is the assessment years. This is because Rule 9C(b) specifies that the amalgamated company shall furnish to the AO a certificate in Form No. 62 duly verified by an Accountant with reference to the books of accounts and other documents showing particulars of production along with the return of income for the assessment years relevant to the previous years during which the prescribed 19 ITA No.369(/Mds/2009 level of production is achieved and for subsequent assessment years relevant to the previous years falling within 5 years from the date of amalgamation. Thus the chart as produced before the CIT(A) itself is not correct. Even according to the chart as produced before the learned CIT(A) in the years 1,2 and 5 the assessee has failed to attain the necessary 50% level of production and only for the years 3 and 4 the assessee has attained such level of production. However, if the chart is prepared considering each of the assessment years as provided in Rule 9C there would be a failure in all 5 years. Coming to the argument that the set off should be allowed in the first year and only if there is a failure at the end of the 5 years, the set off should be reversed, we feel that such a view is not possible insofar as the Act has not provided that the 50% production is to be attained within 5 years. It provides that it should have attained the 50% minimum production for every year for 5 years. In any case, this need not be looked at here in this case insofar as, as mentioned earlier, the assessee has expressed its intention to discontinue the business conducted by TTK Biomed Ltd. in the initial years itself by entering into the agreement with LIG. Further it is in any case noticed that in the first year the assessee has failed to attain the requisite 50% production and the assessee has failed to comply with the provisions of section 72A of the I.T.Act read with Rule 9C of the I.T. Rules and consequently the assessee would not be entitled to the carried forward and set off of the depreciation and business losses. In the circumstances, the finding of 20 ITA No.369(/Mds/2009 the learned CIT(A) on this issue stands reversed and that of the AO restored. Thus ground Nos. 2.1, 2.2 and 3.3 of the Revenue's appeal stand allowed.
23. In regard to the submission that the unabsorbed depreciation was liable to be added to the written down value and depreciation granted thereon by following the decision of the Madras High Court in the case of CIT v. Silical Metallurgic Ltd., referred to supra, it is noticed from the agreement entered into by the assessee with London International Group (LIG) that the assessee has agreed in para 6 of the said agreement that the equipment relating to the manufacture of the rubber contraceptives lying with TTK Biomed Ltd. shall be dismantled and rendered unsuable for manufacture of rubber contraceptives and at the option of LIG the equipment may be sold/transferred to LIG or any of their associates at the valuation which will not exceed inter company debt between TTK-LIG and BIOMED at the date of the agreement and which debt shall be extinguished to that extent. Thus the assessee has not used any of the equipment in respect of the rubber contraceptives manufacturing process of TTK Biomed Ltd. The assessee has also not placed before us any evidence to show that such machinery had continued to be used in respect of the manufacture of rubber contraceptives. Here it may also be mentioned that the chart, which has been referred to earlier and which has been extracted from the order of the learned CIT(A) from page 18 of his order, is in respect of the production details of surgeons gloves and not in respect of rubber contraceptives. Thus the 21 ITA No.369(/Mds/2009 assessee has practically stopped the production of rubber contraceptives and has failed to attain the requisite minimum production of surgeons gloves also. In these circumstances it is found that the said decision would not be applicable.
24. Grounds No.1 and 4 of the Revenue's appeal are general in nature and as no serious submissions were raised, they are dismissed as not contested. In the circumstances, the appeal of the Revenue is partly allowed and the application under Rule 27 of the ITAT Rules raised by the assessee is admitted for adjudication and dismissed on merits. Consequently the reopening of the assessment is upheld and the Revenue's appeal stands partly allowed.
25. The order was pronounced in the court on 16-07-2010.
Sd/- Sd/-
(Pradeep Parikh) (George Mathan)
Vice President Judicial Member
Chennai,
Dated the 16th July, 2010.
H.
Copy to: (1) Appellant
(2) Respondent
(3) CIT(A)
(4) CIT
(5) D.R.
(6) Guard file
22
ITA No.369(/Mds/2009