Income Tax Appellate Tribunal - Delhi
Bhayana Builders (P) Ltd., New Delhi vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI 'A' BENCH
BEFORE SHRI HARI OM MARATHA , JM & SHRI A.N. PAHUJA, AM
ITA nos..897,1878 &1879/Del/2012
Assessment years : 2005-06 to 2007-08
A.C.I.T.,Circle-2(1), Room V/s. M/s Bhayana Builders (P)
no. 398D, CR Building,IP Ltd., 7, Factory Road, Near
Estate,New Delhi Safdarjung Hosptial, New
Delhi
[PAN :AAACB 4147 N]
(Appellant) (Respondent)
Revenue by Shri Anuj Tiwari, AR
Assessee by Shri Pirthi Lal, DR
Date of hearing 30-08-2012
Date of pronouncement 01-10-2012
ORDER
A.N. PAHUJA:- These three appeals filed by the Revenue on 22.02.2012 against an order dated 7.12.2011 for the AY 2005-06 ; on 24.04.2012 against an order dated 07.02.2012 for the AY 2006-07 and on 24.4.2012 against an order dated 27.2.2012 of the AY 2007-08 of the ld. CIT(A)-V, New Delhi, raise the following grounds:
I.T.A. No.897/D/2012 "1. The ld. CIT(A) has erred on facts and in law in treating the reopening of the case u/s 147 of the I.T. Act as invalid and cancelling the order passed u/s 147/143(3) of the I.T. Act.
2. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any time before or during the hearing of this appeal."
2 ITA nos.897,1878&1879/Del./2012 I.T.A. No.1878/D/2012
1. "The ld. CIT(A) has erred on facts and in law in allowing the ground of appeal of the assessee challenging the reopening of the case u/s 147 of the I.T. Act. The CIT(A) has not appreciated that in the original assessment the Assessing Officer has not considered the issue as to whether the expenditure on wooden shuttering and centering material is revenue as per the law.
2. The ld. CIT(A) has erred on facts and in holding that wooden shuttering and centering is to be allowed as revenue expenses.
3. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any time before or during the hearing of this appeal."
I.T.A. No.1879/D/2012
1. "The ld. CIT(A) has erred on facts and in deleting the disallowance of commission paid to M/s Brainstreet Marketing (P) Ltd. at ``18,85,000/-,
2. The learned CIT(A) has erred on facts and in holding that wooden shuttering and centering is to be allowed on consumption basis as revenue expenses.
3. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any time before or during the hearing of this appeal."
2. At the outset, the Bench rejected the request for adjournment on behalf of the assessee and considering the nature of issues and findings of the ld. CIT(A),proceeded to dispose of these appeals after hearing both the parties.
3. Adverting first to ground no.1 in the appeal of the Revenue for the AY 2005-06, facts, in brief, as per relevant orders are that assessment in this case 3 ITA nos.897,1878&1879/Del./2012 was initially completed vide order dated 5th December, 2007 u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the 'Act'), determining an income of ``1,10,87,180/- in pursuance to return filed on 27th October, 2005, declaring an income of ``1,10,50,707/-. Subsequently, on perusal of assessment records, the AO noticed that on account of allowance of claim of wooden shuttering and centering expenses, income of the assessee had escaped assessment, the expenditure being capital in nature, in the opinion of the AO. Accordingly, the AO recorded the following reasons in terms of provisions of section 148 (2) of the Act:
"Note for reasons to believe u/s 147 of the I.T. Act in the case of Bhayana Builders Pvt. Ltd. assessment year 2005-06 PAN AAACB 4147N The return of income for the assessment year 2005-06 was filed on 27.10.2005 declaring an income of ``1,10,50,707/- and the assessment was completed u/s 143(3) of the Act on 5.12.2007 at an income of ``1,10,87,180/-.
On perusal of assessment records, it is detected that during the previous year relevant to assessment year 2005-06, the assessee company had debited an amount of ``2,60,28,512/- on account of shuttering and centering expenses which includes wooden shuttering and centering as well as steel shuttering and centering. Out of total expenses of ``2,60,28,512/-, the assessee company had claimed expenses amounting to ``2,42,56,947/- on account of wooden shuttering and centering and an expenses of ``17,71,565/- on account of steel shuttering and centering. Only an amount of ``17,71,565/- being steel shuttering and centering was taken as capital expenditure and ``2,42,56,947/- as revenue expenditure, whereas, the whole amount i.e. ``2,60,28,512/- should have been taken as capital expenditure and only depreciation at the prescribed rate i.e. @25% on ``2,42,56,947/- to be allowed.
In view of the above, I have reason to believe that an amount of ``2,42,56,947/- chargeable to tax has escaped assessment for the assessment year 2005-06 and, hence, clearly attracts the provisions of clause (c) of Explanation 2 to Section 147 of the I.T. Act."
4 ITA nos.897,1878&1879/Del./2012 3.1 After recording the aforesaid reasons, the AO issued a notice u/s 148 of the Act on 2nd July, 2010. In response, the assessee filed return on 9th August, 2010. During the course of reassessment proceedings on 8th October, 2010, the assessee raised objections against initiation of proceedings u/s 148 of the Act relying, inter alia, on a number of judicial pronouncements. However, the AO rejected these objections and upheld the validity of reopening of the assessment in the light of decisions in Teekoy Rubbers (India) Limited Vs. CIT (Ker) 181 ITR 387; Renusagar Power Co. Ltd. Vs. Income-tax Officer and another (All) 117 ITR 719; M.A. Chidambaram Vs. CIT (Mad) 216 ITR 175; Tube Suppliers Ltd. Vs. CIT (Mad) 216 ITR 596 and CIT Vs. First Leasing Company of India Ltd. (Mad) 241 ITR 248.
3.2 The AO, thereafter, showcaused the assessee as to why the expenditure of ``2,42,56,947/- on wooden shuttering and centering expenses be not treated as capital in nature. In response, the assessee stated that the total amount of ``2,60,28,512/- comprised wooden shuttering and scaffolding- `2,42,96,947.70 and steel centering & shuttering-`17,31,565.30 . The assessee treated an amount of ``17,71,565/- steel shuttering & centering expenses capital in nature while claiming remaining expenses on wooden shuttering & scaffolding revenue in nature on the ground that the ply and batten consumed for making base of casting and flooring of multistoried building, remained soaked with concrete mixtures and watering for about 4 weeks at a stretch ;since this ply and batten could at the most be used, not more than 3 to 4 times, therefore, the amount was clamed as revenue expense. However, the AO did not accept the submissions of the assessee while relying upon decisions in Scientific Engineering House Pvt. Ltd. Vs. CIT (1986) 157 ITR 86 (SC); Orissa Cement Ltd. Vs. CIT (1969) 73 ITR 14, 20 (Del.); CIT Vs. Bank of India Ltd.(1979) 118 ITR 809 (Bom); CIT Vs. Elecon Engg. Co. Ltd. (1987) 166 ITR 16 (SC) and CIT Vs. Sri Krishna Bottlers Pvt. Ltd. (1989) 175 ITR 154(AP) and concluded that wooden shuttering and centering material was plant. Consequently, the AO disallowed the claim, treating the amount as capital in nature, resulting in disallowance of 5 ITA nos.897,1878&1879/Del./2012 ``1,82,22,710/- after allowing depreciation @25% on the amount of wooden shuttering and centering..
4. On appeal, the assessee questioned the validity of reopening of the assessment, relying, inter alia, on the decision of Hon'ble Apex Court in CIT Vs. PVS Beedies Pvt. Ltd. 237 ITR 13 (SC) and CIT Vs. Simbaoli Sugar Ltd. (2011) 333 ITR 470(Del.). The assessee pointed out that the original return filed by them was selected for scrutiny and the AO required the assessee to submit the following details:-
1) "Copy of ledger a/c of centering and shuttering - wood, purchased during the year under reference;
2) Copy of ledger a/c of steel shuttering, purchased during the year under reference.
3) Copy of ledger a/c of centering, shuttering and scaffolding consumed during the year ended 31.3.2005 along with working thereof."
4.1 The assessee having submitted complete details vide letter dated 15.10.2010, there was complete disclosure of facts relating to claim of expenses on wooden shuttering centering, scaffolding etc. Since the assessee had already disclosed the primary facts, relying upon decisions in CIT Vs. Bhaji Lavji, 79 ITR 582; Income-tax Officer Vs. Lakhmani Mewal Das, 103 ITR 437 (SC); CIT Vs. Motor & General Finance Ltd., (2009) 184 Taxman 465 (Del), the assessee argued that reopening of the assessment was invalid. Inter alia, the assessee relied upon a number of decisions in CIT Vs. Kelvinator of India Ltd., 256 ITR 1 (Del-FB); CIT Vs. Goetze (India) Ltd., (2010) 321 ITR 431 (Delhi); Asteroids Trading and Investments (P) Ltd. Vs. DCIT (2009) 308 ITR 190; CIT Vs. Eicher Ltd. (2007) 294 ITR 310 (Delhi); Carlton Overseas (P) Ltd. Vs. Income-tax Officer (2010) 188 Taxman 11 (Delhi); Satnam Overseas Ltd. Vs. Addl. CIT (2010) 188 Taxman 172 (Del); Sudhir Gensets Ltd. Vs. Income-tax Officer (2011) 201 Taxman 216 (Delhi)(Mag.); CIT Vs. Random Constructors Pvt. Ltd. (2010) 186 Taxman 303 (P&H); CIT Vs. Indian Farmers Fertilizers Co-operative Ltd.(2008) 171 Taxman 379 (Delhi); National Dairy Development Board Vs. DCIT (2011) 6 ITA nos.897,1878&1879/Del./2012 242 CTR (Guj) 302; CIT Vs. Simbhaoli Sugar Mills Ltd. (2011) 333 ITR 470 (Delhi); Legato Systems (India) Pvt. Ltd. Vs. DCIT (2010) 187 Taxman 294 (Delhi); Diwakar Engineers Ltd. Vs. Income-tax Officer (2010) 187 Taxman 327 (Delhi); Jal Hotels Co. Ltd. Vs. Ass. DIT (2009) 184 Taxman 1 (Delhi). In the light of these submissions and decisions, the ld. CIT(A) concluded as under:-
"3.4 I have carefully considered the assessment order as well as the contentions of the appellant raised in the written submission. From para 4 of the original assessment order passed u/s 143(3), it is seen that there was a discussion in the order on the issue of expenses claimed on shuttering and centering, both wooden and steel, for which the AO had called for necessary details. The AO after examination of the details had allowed the expenses in respect of wooden shuttering and centering by following the decision in earlier assessments and after applying his mind to the issue. While, he had allowed expenses on wooden shuttering and centering and scaffolding on consumption basis, he had capitalized the expenditure claimed by the assessee on steel shuttering and centering and allowed depreciation thereon after taking into account the brought forward written down value of such materials. It may be added here that there may not be detailed reasons recorded in the assessment order on analysis of material on record. The Full Bench of the Jurisdictional High Court of Delhi in the case of CIT Vs. Kelvinator of India Ltd. had rejected the submissions of the department by holding that where the detailed reasons are not recorded, it may justify the reopening of the case. It was held that this submission is fallacious and the Full Bench decision of the Delhi High Court has also been confirmed by the Supreme Court in CIT Vs. Kelvinator of India Ltd., (2010) 320 ITR 521 (Supreme Court).
It is also seen that the department has been consistently following its earlier orders of treating the expenditure on wooden shuttering and centering and scaffolding on a consumption basis and capitalizing the expenditure of steel shuttering and centering and allowing depreciation thereon. This is a settled issue, as the assessee has also accepted the same.
In view of the facts of the present case and various decisions on the issue, I find that the primary facts were before AO and the same has been considered and discussed in the original assessment order. Since the re-assessment has been completed 7 ITA nos.897,1878&1879/Del./2012 on the same set of facts, the reopening is held to be invalid. Consequently, the order u/s 143(3) read with section 148 stands annulled.
Since the reopening u/s 147 has been held to be invalid and order passed in pursuance to reopening stands cancelled, the grounds on merit have become only of academic nature and requires no specific comments."
5. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A). The ld DR while carrying us through the assessment order, supported the findings of the AO while the ld. AR on behalf of the assessee relied upon the findings in the impugned order.
6. We have heard both the parties and gone through the facts of the case. Indisputably the original assessment in this case was completed vide order dated 15th December, 2007 u/s 143(3) of the Act, determining income of ``1,10,87,180/- in pursuance to return declaring income of ``1,10,50,707/- filed on 27th October, 2005. Thereafter, the AO reopened the assessment on 2nd July, 2010 u/s 147 of the Act i.e. four years after the end of the aforesaid assessment year on the ground that wooden shuttering and centering were capital in nature, even when during the course of original assessment proceedings, issue had been examined by the AO after raising queries and amount was allowed as revenue expenditure . As pointed out by the ld. CIT(A) , the AO raised a specific query regarding claim of wooden shuttering and centering expenses and the assessee filed relevant details vide letter dated 15th October, 2007. No failure on the part of the assessee in relation to material facts in respect of wooden shuttering & centering expenses in the original assessment for the year under consideration, has been attributed in the aforesaid reasons recorded by the AO nor the ld. DR ascribed any such failure to the assessee, before us. The reasons do not indicate why and how the assessee failed to make full and true disclosure of 8 ITA nos.897,1878&1879/Del./2012 material facts in relation to wooden shuttering & centering expenses. As pointed out by the ld. CIT(A), during the course of assessment proceedings the AO had raised a specific query relating to wooden shuttering & centering expenses and indisputably, the assessee submitted a detailed reply dated 15.10.2007. W e find that the facts mentioned in the aforesaid reasons were available with the AO even at the time of finalizing the initial assessment completed u/s 143(3) of the Act on 5.12.2007. On the basis of same material, if the AO takes a different view subsequently, after expiry of 4 years from the end of the assessment year, that would not confer any jurisdiction on the AO to issue notice u/s 148 of the Act. The scope and effect of section 147 as substituted with effect from April 1, 1989, as also sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a), two conditions were required to be satisfied- firstly the AO must have reason to believe that income, profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement occurred due to reason of either omission or failure on the part of the taxpayer to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the AO could have jurisdiction to issue notice under section 148 read with section 147(a).But under the substituted section 147, existence of only the first condition suffices. In other words if the Assessing Officer, for whatever reason, has reason to believe that income has escaped assessment, it confers jurisdiction to reopen the assessment. However, both the conditions must be fulfilled if the case falls within the ambit of the 9 ITA nos.897,1878&1879/Del./2012 proviso to section 147. Since in the case under consideration, notice u/s 148 had been issued only on 2.7.2010 that is after four years from the end of relevant assessment year, apparently, the issue that arises for our consideration is as to whether there was any failure on the part of the assessee to disclose fully and truly all material facts? No such failure is either evident from the assessment order or the reasons recorded by the AO nor has been pointed out before us by the ld. DR. Indisputably, the AO chose to reopen the assessment completed u/s 143(3) of the Act after recording reasons, wherein no such failure as has been envisaged in proviso to sec. 147 of the Act, has been attributed to the assessee. In Rakesh Aggarwal v. Asst. CIT [1997] 225 ITR 496, Hon'ble Delhi High Court held that in view of the proviso to section 147, notice for reassessment under section 148 would be illegal if issued more than four years after the end of the relevant assessment year unless failure is ascribed to the assessee in disclosing fully and truly all material facts necessary for his assessment. Hon'ble Gujrat High Court while adjudicating a similar issue held in Shree Tharad Jain Yuvak Mandal v. ITO [2000] 242 ITR 612 as under:
"A perusal of the aforesaid provision goes to show that under the proviso to section 147, the foundation of conferring jurisdiction on the Assessing Officer to assess or reassess the income for any assessment year beyond the end of four years from the end of relevant assessment year must be omission or failure on the part of an assessee to make a return under section 139 for any assessment year or to disclose fully and truly all material facts necessary for his assessment for that year and that the Income-tax Officer has reason to believe that the income chargeable to tax has escaped assessment for that year. In the absence of any such omission or failure on the part of the assessee, taking action for assessment or reassessment is not permissible for any year after the expiry of four years from the relevant assessment year.
The scope of the assessee's duty to disclose fully and truly all material facts necessary for assessment in the context of the provisions of section 34 of the Indian Income-tax Act, 1922, has
10 ITA nos.897,1878&1879/Del./2012 been succinctly stated by the Supreme Court by their Lordships in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191. The court observed:
"There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assessee."
The court further said:
"Does the duty, however, extend beyond the full and truthful disclosure of all primary facts? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else- far less the assessee-to tell the assessing authority what inferences, whether of facts or law, should be drawn."
6.1 Again in the case of Patidar Oil Cake Industries Vs. DCIT, 270 ITR 347(Guj), Hon'ble Gujrat High Court held "In the light of the fact that the assessments have been sought to be reopened after a period of four years from the end of each of the assessment years in question, the provisions of section 147 of the Act mandate that the Assessing Officer shall be vested with the jurisdiction to initiate reassessment proceedings only in case there is any omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the year under consideration and such failure should result in income chargeable to tax escaping assessment. On a plain reading of the aforesaid provisions and the reasons recorded, it becomes clear that there cannot be ascribed any failure or omission to the petitioner so as to vest the Assessing Officer with jurisdiction to reopen the assessments which were already finalised. In the circumstances, for the assessment years 1986-87, 1987-88 and 1988-89 in the light of the fact that the initiation by issuance of impugned notices is beyond the period of four years and the prerequisite conditions stipulated by section 147 of the Act are not fulfilled, there is no case made out for upholding the proposed reassessment. The notices for all the four years are, therefore, bad in law and are quashed and set aside."
6.2 In the case of Devidayal Rolling Mills & Another Vs. Y.R.Saini,ACIT,285 ITR 514,Hon'ble Bombay High Court held that where an assessment order passed u/s 143(3) of the Act is sought 11 ITA nos.897,1878&1879/Del./2012 to be reopened beyond four years from the end of relevant assessment year, the Revenue must establish that there was failure on the part of the assessee to disclose fully and truly all material facts relevant for the purposes of the assessment.
6.3 In the case of Mercury Travels Ltd. Vs. DCIT & Another,258 ITR 533(Cal.), Hon'ble High Court in the light of facts of the case concluded that no income chargeable to tax had escaped assessment for those assessment years due to failure of the assessee to disclose fully and truly all material facts necessary for its assessment.
6.4 In Priyanka Carbon & Chemical Industries (P) Ltd. vs. DCIT (2008) 15 DTR (Guj.) 31, Hon'ble High Court held that when factual data was available with the AO at the time of assessment, on the same very material, if the AO takes a different view subsequently and that too after expiry of four years from the end of the relevant assessment year, that would not confer any jurisdiction on the AO to issue notice u/s 148 of the Act. Similar view was taken in ACIT vs. Jagdishbhai Nanubhai Tekrawala (2008) 12 DTR (Guj) 270, 6.5 In Vareli W eavers Pvt. Ltd. vs. DCIT (1999) 240 ITR 77 (Guj) also notices under section 148 read with section 147 of the Act were quashed by the Hon'ble High Court, there being no whisper in the reasons recorded by the AO about failure on the part of the assessee to disclose truly and fully all material facts .
6.6 In CIT Vs. DCM Ltd.,(2009) 24 DTR(Del.) 72,Hon'ble jurisdictional High Court found that there was no allegation in the reasons recorded by the AO that the assessee had failed to file its return or that it had failed to disclose fully and truly all material 12 ITA nos.897,1878&1879/Del./2012 facts in its return nor was there any allegation by the Assessing Officer that the assessee had failed to disclose fully and truly all material facts in its return of income nor even there was any allegation regarding escapement of income. In these circumstances, Hon'ble High Court upheld that findings of the Tribunal that notice u/s 148 of the Act ,having been issued after four years, the reopening of the assessment was not valid.
6.7 In CIT & Another Vs. Foramer France, 264 ITR 566 (SC),Hon'ble Apex Court upheld the order of the Hon'ble Delhi High Court in concluding that when there was admittedly no failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for the assessment, the proviso to the new section 147 of the Act squarely applied, and the impugned notices were barred by limitation mentioned in the proviso.
6.8 In Supreme Travels (P) Ltd. vs. DCIT, 182 Taxman 216(Bom.), Hon'ble Bombay High Court held that the Assessing Officer can reopen the assessment only if the ingredients of section 147 are fulfilled.
6.9 In Gujarat Carbon and Industrial Ltd. vs. Jt. CIT [2008] 307 ITR 271 (Guj), Hon'ble High Court in the absence of any failure on part of the assessee to fully and truly disclose all material facts relevant for the assessment of the assessment year in question, concluded that the impugned notice under s. 148 issued beyond a period of four years from the end of the relevant assessment year, is required to be quashed.
6.10 Likewise in Gujrat Fluorochemicals Ltd. vs. DCIT [2009] 319 ITR 282 (Guj), Hon'ble High Court concluded that the assessee having made full disclosure of material facts in the return which was 13 ITA nos.897,1878&1879/Del./2012 accompanied by several enclosures, assessment could not be reopened beyond four years from the end of the relevant assessment year for the reason that certain income has been wrongly assessed under the head 'Capital gains ' instead of ' Profits and gains of business or profession'.
6.11 In Nikhil K Kotak vs. Mahesh Kumar, AO [2009] 319 ITR 445 (Guj) also it was held that in the absence of any averment of the Revenue that there was any omission or failure on the part of the assessee to disclose fully and truly all material facts relevant for the assessment of the assessment year in question, impugned notice under s. 148 issued beyond a period of four years from the end of the relevant assessment year is bad in law and without jurisdiction.
6.12 In Cadila Healthcare Ltd. vs. Dy. CIT [2010] 41 DTR 145 (Guj), Hon'ble High Court concluded that in the absence of any averment in the reasons recorded by the AO for reopening the assessment that the petitioner has failed to disclose fully and truly any material fact necessary for its assessment for the year under consideration or any new material or facts coming to the notice of the AO leading to the conclusion that income had escaped assessment, the ingredients of the proviso to s. 147 are not satisfied and, therefore, entire proceedings under s. 147 initiated pursuant to the impugned notice after expiry of four years from the end of the relevant assessment year were without jurisdiction and cannot be sustained.
6.13 In Mihir Textiles Ltd. vs. Jt. CIT [2010] 43 DTR 11 (Guj),Hon'ble High Court held that the petitioner having submitted audited books of accounts, P&L a/c, and balance sheet along with notes and also made a specific disclosure in the form of a note regarding transfer of its undertaking, it cannot be said that the petitioner is guilty of not making full and true disclosure and, therefore, notice under s. 148 issued after the expiry of four years from the end of the relevant assessment year is quashed and set aside.
14 ITA nos.897,1878&1879/Del./2012 6.14 Similar view was taken in decision dated 28.11.2011 in CIT vs. Purolator India Limited in ITA no. 489/Del./2011 and decision dated 1.12.2011 in BLB Limited vs. ACIT in WPC 6884/2010,JSRS Udyog Limited & Another vs. ITO,313 ITR 321(Del.);Wel Intertrade Private Limited vs. ITO,308 ITR 22(Del.) and in a recent decision dated 11.11.2011 in ITA no.87 /2010 in Atma Ram Properties Pvt. Ltd. vs. DCIT by the Hon'ble jurisdictional High Court.
6.15 In Haryana Acrylic Manufacturing Co., 308 ITR 38 (Del.),, Hon'ble jurisdictional High Court, inter alia, concluded as under:
"20. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in Wel Intertrade (P.) Ltd.',308 ITR 33(Del.) we had agreed with the view taken by the Punjab and Haryana High Court in the case of Duli Chand Singhania,269 ITR 192 that, in the absence of an allegation in the reasons recorded that the escapement of income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, any action taken by the Assessing Officer under section 147 beyond the four year period would be wholly without jurisdiction. Reiterating our viewpoint, we hold that the notice dated 29-3- 2004 under section 148 based on the recorded reasons as supplied to the petitioner as well as the consequent order dated 2-3-2005 are without jurisdiction as no action under section 147 could be taken beyond the four year period in the circumstances narrated above."
15 ITA nos.897,1878&1879/Del./2012 6.16 Here we may also refer to decision in Gruh Finance Ltd. v. JCIT(Assessment) 243 ITR 482Guj) ,wherein Hon'ble High Court observed, inter alia, as under:
"In so far as the expressions "reason to believe" and "change of opinion" are concerned, we are of the view that though the material was available on record, at the time of first assessment, when no conscious consideration of the material is made and a mistake has been committed, it would not, in any case, create an embargo or a ban on the competent officer to exercise powers under the amended section 147 of the Income-tax Act, 1961, as prima facie, there could not be "change of opinion" in that factual scenario. It has also not been shown to us on behalf of an assessee. If conscious application of mind is made to the relevant facts and material available or existing at the relevant point of time while making assessment and again a different or divergent view is sought, it would tantamount to "change of opinion", whereas, in the case of existing material, no conscious attempt has been made, it would tantamount to mistake in not considering the relevant point or proposition and it would not be a "change of opinion".
6.17 As regards change of opinion, we may reiterate that the assessee made disclosure of wooden shuttering and centering expenses during the course of original assessment proceedings ,when the AO raised a specific query relating to these expenses and indisputably, the assessee submitted a detailed reply dated 15.10.2007. These facts have not been disputed before us. In this context , we find that Hon'ble Apex Court while affirming the decision of Hon'ble Delhi High Court in Kelvinator of India Ltd.(supra) and going through the changes made to section 147 of the Act observed as under:
"....., we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from 1st April, 1989), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review ; he has the power to reassess. But reassessment has to be based on 16 ITA nos.897,1878&1879/Del./2012 fulfilment of certain preconditions and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, the Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in section 147 of the Act. However, on receipt of representations from the companies against omission of the words "reason to believe", Parliament reintroduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No. 549 dated October 31, 1989 ([1990] 182 ITR (St.) 1, 29), which reads as follows :"7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in section 147.-A number of representations were received against the omission of the words `reason to believe' from section 147 and their substitution by the `opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe' in place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same."
For the aforestated reasons, we see no merit in these civil appeals filed by the Department ; hence, dismissed with no order as to costs."
6.18 The aforesaid observations of the Hon'ble Apex Court when viewed in the light of facts and circumstances in the case before us, lead us to an inescapable conclusion that the AO reopened the assessment in relation to wooden shuttering and centering expenses merely on the basis of change of opinion and no 'tangible material' was brought on record before initiating action u/s 147 of the Act.
17 ITA nos.897,1878&1879/Del./2012 6.19 Moreover, Hon'ble Madras High Court in their decision dated 3.8.201 in CIT vs. M/s Baer Shoes (India) Pvt. Ltd, In ITA no.706 of 2010,following the view taken by Hon'ble Gujrat High Court in Austin Engineering Co. Ltd. vs. JCIT,312 ITR 70,concluded on the issue of reopening of assessment on the basis of subsequent decision of Hon'ble Supreme Court, in the following terms:
"4. We are not able to countenance the said submission made by the learned standing counsel for the appellant. In the present case on hand, the assessee at the time of filing return for the assessment year 1999-2000 has disclosed all the materials before the Assessing Officer and claimed deduction under Section 80HHC. Even before the earlier proceedings initiated under Section 147, it is not the case of the Revenue that the assessee has not disclosed the materials. Therefore, on a consideration of the materials available on record, the Assessing Officer passed an order on the earlier two occasions. Thereafter, the Assessing Officer has sought to reopen the assessment once again invoking the power under Section 147 of the Act, which, in our considered opinion, is not permissible in law on the facts of the case.
5. The judgment rendered by the Hon'ble Supreme Court is an expression of opinion on the interpretation of statute. The power under Section 147 will have to be invoked by the Assessing Officer in accordance with the said provision. In other words, merely because a judgment has been rendered, the same cannot be a ground for reopening the assessment under Section 147 of the Act. The Hon'ble Gujarat High Court in Austin Engineering Co. Ltd. vs. JCIT (312 ITR 70) has taken the view that in a case where the material facts were fully disclosed and the assessment was completed allowing deduction under Section 80HHC on export incentive, such an assessment cannot be reopened based upon a subsequent decision of the Supreme Court, since it merely would amount to a change of opinion. We are in respectful agreement with the judgment of the Gujarat High Court on the proposition of law laid down therein."
7. To sum up, in the instant case, as is apparent from the facts narrated in the impugned orders, the AO reopened the assessment completed on 5.12.2007 u/s 143(3) of the Act merely on the basis of facts already available before him at the time of original assessment proceedings. Not even a whisper is evident from the reasons recorded or the facts narrated in the impugned order as to 18 ITA nos.897,1878&1879/Del./2012 whether or not there was any failure on the part of the assessee in disclosing fully and truly all material facts necessary for his assessment. The reasons do not indicate why and how the assessee failed to make full and true disclosure of material facts in relation to royalty expenses. W e are of the opinion that any such failure as is envisaged in the proviso to sec. 147 of the Act, is a matter of fact alone and there can be no deemed failure . In these circumstances, in absence of any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration, the notice under section 148 of the Act having been issued after the expiry of a period of four years from the end of the relevant assessment year, the very initiation of proceedings under section 147 of the Act stands vitiated and as such cannot be sustained, the ingredients of section 147 having not been fulfilled. In view of the foregoing, especially in the light of consistent view taken in aforesaid decisions of the Hon'ble jurisdictional High Court and other Courts, considering the facts and circumstances of the case, we are of the opinion that there is nothing to suggest that all the primary facts were not disclosed by the assessee at the time of original assessment completed u/s 143(3) of the Act nor any failure on the part of the assessee to disclose fully and truly all the material facts has been ascribed in the circumstances narrated before us. It cannot be said that the assessee suppressed any material facts. It is well-settled that if a notice under section 148 of the Act has been issued without the jurisdictional foundation u/s 147 of the Act being available to the AO, the notice and the subsequent proceedings will be without jurisdiction and thus, liable to be struck down . In view thereof, we have no hesitation in upholding the findings of the ld. CIT(A) in quashing the reassessment order. Consequently, ground no. 1 in the appeal is dismissed..
19 ITA nos.897,1878&1879/Del./2012
8.. Now adverting to ground no.1 in the appeal of Revenue for assessment year 2006-07, facts in brief, as per relevant orders are that original assessment in this case was completed on an income of ``1,32,63,670/- vide order dated 27th May, 2008, u/s 143(3) of the Act, in pursuance to return declaring income of `1,25,33,804/- filed on 20th November, 2006. Subsequently, the AO recorded the following reasons in terms of provisions of section 148 (2) of the Act:
"Note for reasons to believe u/s 147 of the I.T. Act in the case of Bhayana Builders Pvt. Ltd. assessment year 2006-07 PAN AAACB 4147N The return of income for the assessment year 2006-07 was filed on 20.11.2006 declaring an income of ``1,25,33,804/- and the assessment was completed u/s 143(3) of the Act on 27.05.2008 at an income of ``1,32,63,670/-.
On perusal of assessment records, it is detected that during the previous year relevant to assessment year 2006-07, the assessee company had debited an amount of ``2,31,96,085/- on account of shuttering and centering expenses which includes wooden shuttering and centering as well as steel shuttering and centering. Out of total expenses of ``2,31,96,085/-, the assessee company had claimed expenses amounting to ``2,15,89,571/- on account of wooden shuttering and centering and an expenses of `16,06,514/- on account of steel shuttering and centering. Only an amount of ``16,06,514/- being steel shuttering and centering was taken as capital expenditure and ``2,15,89,571/- as revenue expenditure, whereas, the whole amount i.e ``2,31,96,085/- should have been taken as capital expenditure and only depreciation at. the prescribed rate i.e. @15% on ``2,15,89,571/- to be allowed.
In view of the above, I have reason to believe that an amount of ``2,15,89,571/- chargeable to tax has escaped assessment for the assessment year 2006-07 and, hence, clearly attracts the provisions of clause (c) of Explanation 2 to Section 147 of the I.T. Act. Therefore, notice u/s 148 of the Act is issued."
8.1 Accordingly, the AO Issued a notice U/s 148 of the Act on 2nd July, 2010. In response, the assessee filed return on 9th August, 2010.For similar reasons as 20 ITA nos.897,1878&1879/Del./2012 were adduced in his order for the AY 2005-06,the AO after rejecting objections of the assessee against reopening of the assessment, treated the amount of ``2,15,89,571/- on wooden shuttering as plant and therefore, capital in nature. As a result disallowance of ``1,56,17,730/- was made after allowing depreciation @25%.
9. On appeal, the assessee questioned the validity of reopening of the assessment. Relying upon the order of his predecessor for the AY 2005-06, the ld. CIT(A) quashed the reassessment in the following terms:-
"5. In the similar facts and circumstances, my predecessor, in her order dated 7.12.2011 for the assessment year 2005-06 has held the reopening of assessment as 'contrary to law' after making a detailed discussion on the legal position so far as section 147 is concerned. I do not find any reason for not following the appeal order for the assessment year 2005-06. Section 147 does not postulate conferment of power on the Assessing Officer to initiate reassessment proceedings on a mere change of opinion on the same set of facts. Matters which have been considered and decided cannot be reopened - CIT Vs. Kelvinator of India Ltd. 320 ITR 561 (Supreme Court) and Legato Systems (India) (P ) Ltd. Vs. DCIT 187 Taxman 294(Del). Therefore, the reopening of assessment is held as 'contrary to law'. The grounds of appeal challenging the reopening of the assessment are allowed."
9.1 As regards on merits of the claim, the ld. CIT(A) allowed the claim in the following terms:-
"6. Even on merits, as regards the expenditure on wooden shuttering and centering, the department has been consistently following its earlier orders of treating the expenditure on wooden shuttering and centering and scaffolding on a consumption basis and capitalizing the expenditure of steel shuttering and centering and allowing depreciation thereon. This is a settled issue, as the assessee has also accepted the same. Therefore, following the principles of law of consistency in respect of settled issues, wooden shuttering and centering is to be allowed on consumption basis as revenue expenditure. It is accordingly 21 ITA nos.897,1878&1879/Del./2012 held as allowable. The ground of appeal pertaining to this item is allowed."
10. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A). The ld DR while carrying us through the assessment order, supported the findings of the AO while the ld. AR on behalf of the assessee relied upon the findings in the impugned order.
11. We have heard both the parties and gone through the facts of the case. Indisputably, the original assessment in this case was completed on 27th May, 2008 determining income of ``1,32,63,670/- in terms of order u/s 143(3) of the Act in pursuance to return declaring income of ``1,25,33,804/- filed on 20.11.2006. Thereafter, the AO reopened the assessment on 2nd July, 2010 u/s 147 of the Act on the ground that wooden shuttering and centering expenses were capital in nature, even when during the course of original assessment proceedings, issue had been examined by the AO in para 4 of the assessment order after raising queries and amount was allowed as revenue expenditure . As pointed out by the learned CIT(A), the AO, following his orders of earlier years has consistently been treating the expenditure on wooden centering and scaffolding as revenue in nature on consumption basis and capitalizing the expenditure of steel shuttering & centering while allowing depreciation thereon. Accordingly, the ld. CIT(A) concluded that reopening of the assessment on a mere change of opinion on the same set of facts is contrary to law. As already stated in Gruh Finance Ltd. (supra) ,Hon'ble Gujrat High Court observed in their decision that 'if conscious application of mind is made to the relevant facts and material available or existing at the relevant point of time while making assessment and again a different or divergent view is sought, it would tantamount to "change of opinion", whereas, in the case of existing material, no conscious attempt has been made, it would tantamount to mistake in not considering the relevant point or proposition and it would not be a "change of opinion". In the instant case, the assessee made disclosure of wooden shuttering and centering expenses during the course of assessment 22 ITA nos.897,1878&1879/Del./2012 proceedings, when the AO raised a specific query relating to these expenses and the issue has been considered in detail in para 4 of the assessment dated 27.5.2008.These facts have not been disputed before us. In this context , we find that Hon'ble Apex Court while affirming the decision of Hon'ble Delhi High Court in Kelvinator of India Ltd.(supra) and going through the changes made to section 147 of the Act concluded that "the AO has no power to review ; he has the power to reassess. But reassessment has to be based on fulfilment of certain preconditions and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer." These observations of the Hon'ble Apex Court when viewed in the light of facts and circumstances in the case before us, lead us to an inescapable conclusion that the AO reopened the assessment in relation to wooden shuttering and centering expenses merely on the basis of change of opinion and no 'tangible material' was brought on record before initiating action u/s 147 of the Act.
11.1 In the present case the re-opening of assessment is sought to be effected within a period of four years of the expiry of the relevant assessment year. However, it is now a well settled position of law that a mere change of opinion would not justify the Assessing Officer in seeking a recourse to the powers under Section 147 and 148 and there must be tangible material before the Assessing Officer to prove that income chargeable to tax has escaped assessment. The principle that there must be tangible material on the basis of which an assessment is sought to be re-opened even within a period of four years is now established in view of the aforesaid judgment of the Hon'ble Supreme Court in M/s.Kelvinator of India Limited(supra). Same view has been reiterated in D. T. & T. D. C. Ltd. v. ACIT,324 ITR 234(Del.);Asteroids Trading & Investment P. Ltd. vs DCIT,(2009) 308 ITR 190 (Bom) ; ICICI Prudential Life Insurance Co. Ltd. (2010) 325 ITR 471 (Bom); Bhavesh Developers vs. A.O. 23 ITA nos.897,1878&1879/Del./2012 (2010) 224 CTR 160 (Bom) and Aventis Pharma Ltd. vs. Astt. CIT (2010) 323 ITR 570 (Bom) (577).
11.2 In view of the foregoing, especially when the ld. DR did not place any material before us so as to enable us to take a different view in the matter, we are of the opinion that the very initiation of proceedings under section 147 of the Act stands vitiated and as such cannot be sustained, the ingredients of section 147 having not been fulfilled. It is well-settled that if a notice under section 148 of the Act has been issued without the jurisdictional foundation u/s 147 of the Act being available to the AO, the notice and the subsequent proceedings will be without jurisdiction and thus, liable to be struck down . In view thereof, we have no hesitation in upholding the findings of the ld. CIT(A) in quashing the reassessment order. Consequently, ground no. 1 in the appeal is dismissed. As a corollary, ground no.2 in the appeal does not survive for our adjudication and is , therefore, treated as infructuous.
12. Adverting now to ground no.1 in the appeal of the Revenue for the AY2007-08 relating to disallowance of claim of ``18,85,000/- on account of commission paid to M/s Brainstreet Marketing (P) Ltd., the assessee filed original return reflecting income of 7,50,11,940 on 30.10.2007,which was revised on 19.07.2008 declaring income of ``7,44,92,693/-.The said return was processed on 28.03.2009 u/s 143(1) of the Act. Subsequently, Income-tax Officer Ward 3(1), New Delhi informed the AO in the instant case that in the case of M/s Brainstreet Marketing (P) Ltd. in the AY 2007-08, it emerged from the statement of Shri Amit Kumar Aggarwal, director of the said company and four other commission agents that the commission received from M/s Bhayana Builders (P) Ltd. was bogus. On the basis of this information, the AO reopened the assessment u/s 147 of the Act with the service of a notice u/s 148 of the Act issued on 13.11.2009. In response to this notice, the assessee filed return on 24 ITA nos.897,1878&1879/Del./2012 10th December, 2009. During the course of reassessment proceedings, the AO asked the assessee as to why commission paid to M/s Brainstreet Marketing (P) Ltd. to the extent of ``18,85,000/- be not disallowed. In response, the assessee replied that the learned CIT(A) vide his order dated 15th October, 2010 in Appeal No.140/09-10 in the case of M/s Brainstreet Marketing (P) Ltd. had categorically concluded that commission paid to them was genuine expenditure and has been treated as business income of the said company. However, the AO did not accept the submissions of the assessee on the ground that the aforesaid order of the ld. CIT(A) in the case of M/s Brainstreet Marketing (P) Ltd. had not been accepted and there was no evidence of service rendered by the said company to the assessee. As a result ,amount of ``18,85,000/- was disallowed.
13. On appeal, the ld CIT(A) relying upon the aforesaid said order dated 15th October, 2010 of the ld. CIT(A) in appeal No.140/09-10 in the case of M/s Brainstreet Marketing (P) Ltd. deleted the disallowance, holding as under:-
"3.2 The issue involved and the submission made by the appellant have been considered.
i) The AO's only ground of disallowing commission payment by the appellant to M/s Brainstreet Marketing (P) Ltd. has been that the department has not accepted the order of CIT(A)-VI, New Delhi, in which the CIT(A) has held the commission receipt by M/s Brainstreet Marketing (P) Ltd. from the appellant as a genuine transaction and has directed the same to be accepted as 'business income' of M/s Brainstreet Marketing (P) Ltd. as against the same being assessed as 'other income' by the AO; otherwise the AO has not brought any thing on record to show that the transaction was bogus.
ii) For a commission payment to be treated as genuine, identity of the payee should be established, there should be no doubt as to the services rendered, there should be direct nexus between the services rendered and the business activity of the appellant; and payment should be reasonable keeping in view the business line of the appellant and further there should be no doubt as to the payment of money. The AO has not brought any thing on record to show that any of the aforesaid conditions is not fulfilled.
25 ITA nos.897,1878&1879/Del./2012
iii) The undersigned has seen the assessment record. Orders from as many as 12 parties were arranged by M/s Brainstreet Marketing (P) Ltd.. for the appellant details as to these parties is available at (page 37 of PB). This list pertains to 'Calculations of Agency Commission to be paid to Brain Street Marketing (P) Ltd.' Below this list, there is a noting "kind atten:- Mr. Nitin Bhayana, director. We have received the above orders through Brain Street please approve the payment of their commission `75 per sq. mtr." This is signed as on 2.06.2006.
There are invoices (pg 35 & 36 of PB) issued by M/s Brainstreet Marketing (P) Ltd. showing commission charges of ``9,50,00,000/- and ``9,35,00,000/-. Service Tax @12% and education cess @2% has been charged on each of the aforesaid amounts. Then there is confirmation (pg 34 of PB) of accounts showing payments to M/s Brainstreet Marketing (P) Ltd. after deducting TDS of ``59,818 and ``58,874/- at the time of crediting amount of ``10,49,444/- and ``10,66,280/-. TDS has been duly deposited in govt. a/c. Certificate in form No.16A is available at page 112 of PB. From the aforesaid it may be seen that TDS was deducted from the commission payment to M/s Brainstreet Marketing (P) Ltd. and M/s Brainstreet Marketing (P) Ltd. have also charged service tax etc. on the payments received by it for the services given to the appellant."
14. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A). The ld DR while carrying us through the assessment order, supported the findings of the AO while the ld. AR on behalf of the assessee relied upon the findings in the impugned order.
15. We have heard both the parties and gone through the facts of the case. As is apparent from the facts of the case, the AO disallowed the claim for deduction of payment of commission to M/s Brainstreet Marketing (P) Ltd on the basis of findings of the AO in the case of the said company. On appeal , the ld. CIT(A) in that case allowed the claim , the transaction having been found to be genuine . The ld. CIT(A) in the impugned order found on perusal of records that M/s Brainstreet Marketing (P) Ltd. arranged orders for the assessee from as many as 12 parties and tax has already been duly deducted at source from 26 ITA nos.897,1878&1879/Del./2012 payments to them and credited to the account of the Government. In nutshell, the ld. CIT(A) allowed the claim on the basis of services rendered by the said company to the assessee. In the light of these findings, especially when the ld. DR did not place before us any material ,controverting the aforesaid findings of the ld. CIT(A) so as to enable us to take a different view in the matter, we are not inclined to interfere. Therefore, ground no.1 in the appeal f the Revenue for the AY 2007-08 is dismissed.
16.. Ground no.2 in the appeal of the Revenue for the AY 2007-08 relates to disallowance of expenditure of ``1,38,76,932/- on wooden shuttering and centering. Relying upon his own orders for preceding AYs 2005-06 & 2006- 07, the AO disallowed the claim of wooden shuttering and centering, treating the same capital in nature. Accordingly, the AO after allowing depreciation, restricted the disallowance to ``67,19,302/-.
17. On appeal, the ld. CIT(A), following the decision of Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Random Constructors Pvt. Ltd. (2010) 186 Taxman 303 (P&H), deleted the disallowance in the following terms:-
"4.2 The issue involved and submissions made by the appellant have been considered. Department has been consistently following its earlier orders of treating the expenditure on wooden shuttering and centering and scaffolding on a consumption basis and capitalizing the expenditure of steel shuttering and centering and allowing depreciation thereon. This is a settled issue, as the assessee has also accepted the same. Therefore, following the principles of law of consistency in respect of settled issues, wooden shuttering and centering is to be allowed on consumption basis as revenue expenditure. The Hon'ble High Court of Punjab & Haryana in its judgments noted above has also held that wooden shuttering material is an allowable revenue expenses even if the same could be used in a subsequent financial year. It is accordingly held as allowable. The ground of appeal pertaining to this item is allowed."
27 ITA nos.897,1878&1879/Del./2012
18. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A). The ld DR while carrying us through the assessment order, supported the findings of the AO while the ld. AR on behalf of the assessee relied upon the findings in the impugned order.
19. We have heard both the parties and gone through the facts of the case. Indisputably, in the preceding years starting from AY 1998-89 until assessment year 2003-04, the claim of the assessee has been accepted treating the amount incurred on wooden shuttering and centering, revenue in nature. Following the principles of consistency , the ld. CIT(A) allowed the claim for deduction of expenditure on wooden shuttering and centering on consumption basis as revenue expenditure. Similar view was taken by Hon'ble Punjab & Haryana High Court in M/s Random Constructors Pvt. Ltd.(supra),relied upon by the ld. CIT(A).Since the ld. DR did not place before us any material ,controverting the aforesaid findings of the ld. CIT(A) nor brought to our notice any contrary decision, so as to enable us to take a different view in the matter , we are not inclined to interfere. Therefore, ground no.2 in the appeal of the Revenue for the AY 2007-08 is dismissed.
20. No additional ground having been raised before us in terms of residuary ground no.2 in the appeal of the Revenue for the AY 2005-06 & ground no.3 in their appeals for the AY 2006-07 & 2007-08, accordingly, these grounds are dismissed.
21. No other plea or argument was made before us.
28 ITA nos.897,1878&1879/Del./2012
22. In result, these three appeals are dismissed.
Order pronounced in open Court
Sd/- Sd/-
(HARI OM MARATHA) (A.N. PAHUJA)
(Judicial Member) (Accountant Member)
NS
Copy of the Order forwarded to:-
1 Assessee
2. A.C.I.T.,Circle-2(1), Room no. 398D, CR Building,IP Estate,New Delhi
3. CIT concerned.
4. CIT(A)-V, New Delhi
5. DR, ITAT,'A' Bench, New Delhi
6. Guard File.
BY ORDER, Deputy/Asstt.Registrar ITAT, Delhi