Facts of the case in brief are that the assessee filed his return of income belatedly on 26/03/2010 showing taxable income of Rs. 6,03,414/-, which was processed under section 143(1) of the I.T. Act, 1961 (hereinafter referred to as Act, for short on 05/04/2010.
Section 132 contemplates existence of certain eventualities in the event of existence where of the competent authority should have reason to believe the existence of the circumstances mentioned in clause (a) to (c) of sub-section (1) of Section 132 of the Act
The agreement between the assessee and GAIL is a contract for sale of gas and not a works contract. VAT which is charged by the seller is on the composite price and not only on the price of the gas. The assessee is required to disclose the price of the gas and transmission charges separately in the same invoice. GAIL is a Government of India undertaking and regularly files its Sales Tax Returns declaring sale of gas inclusive of transmission charges. GAIL is regularly assessed to Income-tax and has been claiming credit for TDS and has also claimed credit for the A.Y. under consideration.
The depreciation u/s 32 is allowed on the actual cost of the assets. The term ‘actual cost’ has been defined in section 43(1) according to which, ‘actual cost’ means ‘the actual cost of the assets to the assessee reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority’. So, the only deduction permissible from the actual cost is the amount, which has been met by any other person or authority.
Briefly stated, the facts of the case are that the assessee-firm filed its return of income (ROI) on 29.09.2009 declaring total income at Rs. ‘NIL’. The books of accounts of the firm are duly audited u/s 44AB and the report in form No 3 CA and 3CB dated 26/09/2009 were filed alongwith the ROI. The assessee-firm derives its income from sale of Petrol and Diesel and also from transport business. The A.O has completed his order u/s 143(3) on 7.1.2011.
From the ratio laid down by the Hon’ble Delhi High Court, it is clear that the instructions issued in the Circulars by CBDT are applicable for pending cases also. Therefore, by keeping in view the ratio laid down in the aforesaid referred to cases, we are of the considered view that Instruction No.3/11, dated 09.02.2011 issued by the CBDT are applicable for the pending cases also and in the said instructions, monetary tax limit for not filing the appeal before the ITAT is Rs. 3.00 lakhs.
There is no dispute regarding the source of income of the assessee which is mainly from the business of purchase and sale of plots/lands. But it does not mean that such an assessee is debarred from purchasing and holding some plots/land as capital asset and claim benefit u/s 54F.
CIT(A) followed the earlier order of the Tribunal in assessee’s own case in part and not in toto. He was of the view that interest and salary to the partners be allowed but not interest to third parties and the depreciation was to be allowed as claimed in the original return because the claim made in the revised return could not be substantiated. However, he has brought nothing on record as to how and in what manner the claim in the revised return was not substantiated particularly when the then learned CIT(A) vide order dt. 30th March, 2007 accepted the filing of revised return and the said order on the issue of acceptance of revised return
It is settled position of law that where any issue is debatable, it cannot be corrected u/s 154 of the Act. In this regard, the Hon’ble Apex Court in the case of T.S. Balaram ITO v. Volkart Bros. [1971] 82 ITR 50 is relevant wherein an action taken by Assessing Officer u/s 154 of the Act was found to be illegal.
In the instant case also, the assessee furnished all the details relating to its claim for deduction u/s 80IB of the Act and the Assessing Officer thoroughly examined the claim while framing the assessment u/s 143(3) and on being satisfied the claim was allowed. Therefore, in the present case, reopening of the assessment by issuing notice u/s 148 of the Act is definitely a change of opinion which is not maintainable and therefore, the re-assessment framed by the Assessing Officer u/s 147 of by issuing notice u/s 148 of the Act after completing the assessment u/s 143(3) of the Act by taking a view which was in consonance with the judgment of the Hon’ble jurisdictional High Court was not valid.
