Pr. Cit-2 Kolhapur v. M/S Rds Construction Co

dik IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. INCOME TAX APPEAL NO. 1753 OF 2016 Pr. CIT-2 Kolhapur...Appellant vs M/s RDS Construction Co. ...Respondent. WITH INCOME TAX APPEAL NO. 1612 OF 2016 Pr. CIT-2 Kolhapur ...Appellant vs M/s RDS Construction Co. ...Respondent. ..... Mr N.N.Singh for the Appellant in both appeals ..... CORAM : AKIL KURESHI & B.P.COLABAWALLA, JJ. FEBRUARY 13, 2019. P.C. : These appeals arise in common background. The facts may be noted from Income Tax Appeal No.1753 of 2016. 2This appeal is filed by the revenue challenging the Judgment of the Income Tax Appellate Tribunal. The following questions are presented for our consideration. “(A) Whether on the facts and in the circumstances of the case and in law, theTribunal was justified in holding that AO has not power to reassess the incomeu/s 153A even in the case of completed assessment u/s 143(3) of the I.T.Act,1961 ? (B) Whether on the facts and in the circumstances of the case and in law, theITAT was right in deleting the additions made by the AO u/s 41(1) on a/c ofbogus claim of expenses in the name of labour contractors / sub-contractorswhich are outstanding for a number of years?” Pg 1 of 2 9.itxa.1753.2016.db.doc 3Question No.1 is squarely covered by the Judgment ofDivision Bench of this Court in the case of Commissioner of Income Tax Vs. Continental Warehousing Corporation Ltd.reported in372 ITR 645. It was held that in the proceedings under Section153(3) of the Income Tax Act, 1961 ("IT Act" for short), finalizedassessment or the reassessment shall not abate, and only undisclosedincome and undisclosed assets detected during the search could notbe brought to tax. In that view of the matter no question of law arisein this respect. 4Question No.2 came up for consideration under similarsituation. The question was rejected by making the followingobservations - “6. Insofar as question no.(i) is concerned, the same arises out of theadditions made by the Assessing Officer under Section 41(1) of the IncomeTax Act, 1961 (“the Act” for short) on account of bogus claim of liability.The Tribunal while giving relief to the assessee, referred to the decision ofthe Supreme Court and other decisions holding that merely because periodof 3 years expired from arising of the liability would not automatically meanthat the liability has ceased. We do not find any error in the view of theTribunal.” additions made by the Assessing Officer under Section 41(1) of the IncomeTax Act, 1961 (“the Act” for short) on account of bogus claim of liability.The Tribunal while giving relief to the assessee, referred to the decision ofthe Supreme Court and other decisions holding that merely because periodof 3 years expired from arising of the liability would not automatically meanthat the liability has ceased. We do not find any error in the view of theTribunal.” 5In the result no question of law arises. Income Tax Appeals are dismissed. No order as to costs. (B.P.COLABAWALLA, J.) (AKIL KURESHI, J.) Pg 2 of 2