HV Transmissions Ltd vs. ITO (ITAT Mumbai)

DATE: (Date of pronouncement)
DATE: February 9, 2012 (Date of publication)

Click here to download the judgement (HV_Transmission_143_1_a_reopening.pdf)

S. 143(1) assessment cannot be reopening u/s 147 in absence of “new material”

The AO accepted the ROI filed by the assessee u/s 143(1). He thereafter issued a notice u/s 148 on the ground that the assessee had claimed a deduction for ERP software and that although only 20% of the said expenses was debited to the P&L A/c, the entire amount was claimed as a deduction. The assessee claimed that the reopening was not valid as there was no “new material” in the AO’s possession. HELD upholding the plea:

Though the assessment was originally u/s 143(1), it is clearly evident from the recorded reasons that there was no new material coming to the possession of the AO on the basis of which the s. 143(1) assessment was reopened. In Telco Dadaji Dhackjee Ltd, the Third Member held, after considering Rajesh Jhaveri Stock Brokers 291 ITR 500 & Kelvinator of India 320 ITR 561 (SC), that a s. 143(1) assessment could not be reopened u/s 147 without there being any new material coming to the possession of the AO. As the AO had reopened the s. 143(1) assessment on the basis of the material which was already on record, the reopening was not valid.

Note: The same view had been taken earlier in Aipita Marketing 21 SOT 302 after considering Rajesh Jhaveri 291 ITR 500 (SC)

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