AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 290
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....ision of the Special Bench in Narang Overseas (P) Ltd. -111TD 1 (Mum. ) (SB) which was cited before him. 5)Having regard to the facts and circumstances of the case, and the provisions of law, the Appellant submits that the Assessing Officer be directed to delete the said mesne profits-Rs. 6,75,000/- from the taxable income. 6)The Assessing Officer erred in resorting to a roving and fishing inquiry in the course of reassessment proceeding under Section 147. 7)The learned Commissioner of Income Tax (Appeals) erred in holding that expenditure was required to be allocated to the earning of dividend income. 8)The learned Commissioner of Income Tax (Appeals) erred in ignoring Appellate decisions in the assessee's own case in earlier years, regarding allocation of expenses to earning of dividend income. 9)The learned Commissioner of Income Tax (Appeals) erred in directing the Assessing Officer to recompute disallowance under Section 14A, by applying Rule 8D. The learned Commissioner of Income Tax (Appeals)failed to consider that the provisions of Rule 8D were not retrospective. 10)The learned Commissioner of Income Tax (Appeals) erred in confirming the levy of interest under section....
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.... ) (3) During the year 2004-2005, upon settlement of a dispute with Whirlpool of India Ltd. , in respect of sub-leased premises, the assessee company received from Whirlpool of India Ltd. , arrears of compensation for the period 1. 10. 1999 to 5. 12. 2003 along with the TDS certificates in respect of the same. The TDS certificates pertain to the period of the compensation i. e,1999-2004. The assessee - company has claimed credit in respect of the TDS certificates in the current assessment year in accordance with the provisions of section 199, as the compensation income for the said period has been offered to tax in the current assessment year. " Assessee objected to proceedings initiated u/s. 147,however AO,vide his letter dtd. 2. 11. 2007 rejected the objections raised by the assessee-company. 2. 1. As per the AO assessee-company had received Rs. 6. 75 lacs as mesne profit for the wrongful occupation of the premises by Whirlpool of India Ltd and the amount of mesne profit was a receipt of revenue nature and hence taxable,whereas the assessee had claimed that same was a capital receipt and therefore not liable to tax. It was argued by the assessee that the amount received was da....
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....uring the year under consideration for wrongful occupation of the premises,that the relevant facts were revealed by the assessee in the return by way of note,that no reasons existed to justify the reopening the assessment,that in the note no. 2 and 3 assessee had disclosed everything,that income of Rs. 13. 28 lacs received as rent was disclosed in the return, that mesne profit of Rs. 6. 75 lacs was part of balance sheet,that reasons recorded by the AO were based on erroneous assumption and were contrary to the facts,that the income from the sub-letting of the premises had been taxed as income from business from the AY. 1975-76 onwards, that the Tribunal had held,while deciding the appeal for the AY. 1981-82 that the compensation received from sub letting had to be assessed under the head business income,that as the assessee was not owner of the property income from the premises could not be assessed as house property income,that there was absence of reasons to believe that income had escaped assessment. He referred to pages no. 3,5-6,13-17 and 24-25 of the Paper-book(PB). He relied upon the judgments of Hindustan Lever Ltd. (268ITR332),Prashant Jhaveri(324ITR154),Kelvinator India(3....
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....remises,that assessee received rent amounting to Rs. 13. 28 lacs in addition to mesne profits of Rs. 6. 75 lacs for the illegal possession of the premises by Whirlpool for the period 01. 10. 1999 to February,2003,that rental income from the premises was being assessed by the department under the head business income for last more than thirty years,that assessee had shown the compensation received from Whirlpool in the profit and loss account and offered the sum for taxation in the year under consideration,that in the return of income by way of notes it had mentioned that mesne profits received by it were to be treated as capital receipt,that in the reasons recorded by the AO it has been mentioned that the amount of Rs. 6. 75 lacs was actually compensation received by the assessee from Whirlpool,that said sum was income of the assessee from house property and same was taxable u/s. 22 of the Act. We find that AO has held that Rs. 6. 75 lacs received by the assessee were compensation for the extended period and was to be assessed u/s. 22 of the Act. In our opinion both the conclusions of the AO were factually incorrect. As stated earlier,assessee had received Rs. 13. 28 lacs and Rs. 6....
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.... apply where only an intimation was issued earlier under Section 143(1). It would in effect place an assessee in whose case the return was processed under Section 143(1) in a more vulnerable position than an assessee in whose case there was a full-fledged scrutiny assessment made under Section 143(3). Whether the return is put to scrutiny or is accepted without demur is not a matter which is within the control of assessee; he has no choice in the matter. The other consequence, which is somewhat graver, would be that the entire rigorous procedure involved in reopening an assessment and the burden of proving valid reasons to believe could be circumvented by first accepting the return under Section 143(1) and thereafter issue notices to reopen the assessment. An interpretation which makes a distinction between the meaning and content of the expression "reason to believe" in cases where assessments were framed earlier under Section 143(3) and cases where mere intimations were issued earlier under Section 143(1) may well lead to such an unintended mischief. It would be discriminatory too. An interpretation that leads to absurd results or mischief is to be eschewed. 14. Certain observat....