TaxTMI 
TaxTMI 
2014 (11) TMI 765
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....he eye of law and is liable to be quashed. 2. For that the re-assessment order dated 08.09.2011 framed u/s 147/143(3) is void and nullity in the eye of law as the recorded reasons are invalid and improper. 3. For that the re-opening of assessment for A.Y.2006-2007 is bad in law and is beyond jurisdiction in as much the assessment has been reopened on mere "change of opinion" on the same set of facts. 4. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the disallowance of expenditure upto 50% out of the total disallowance of Rs. 12,72,359/- made by the A.O. on account of administrative expenses. 5. That the appellant craves leave to add, alter or delete all or any of the grounds o....
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.... before the AO :- "1) It is alleged that as there was no business activity, administrative expenses to the extent of Rs. 1272359 is not allowable & hence setting of the said loss against income from capital gain was illegal. In the regard it is submitted that it is a matter on record that there was income from operation to the tune of Rs. 18000/- which is apparent from the Balance sheet. Therefore it is incorrect to hold that there was no business activity. Further the details of administrative expenses which constitute the total expenditure of Rs. 1311261. which again after adjustment of income of Rs. 38902 (Income from operation Rs. 18000 + Misc. income of Rs. 20902) comes to Rs. 1272359 is detailed below : Amount (Rs.) a) Audi....
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....t been claimed twice once against business income & secondly against income from capital gain. It has been only claimed from income from capital gain. Further I would like to state that in tax computation of Asst.Year 2006-07 Brokerage & Commission expenses was also added back in income from Business & Profession. The Detail explanations of administrative expenses is attached as per Annexure-I. 4) From the totality of the discussion made above. It is clear that administrative expenditure to the tune of Rs. 1311261 claimed against business income is allowable expenditure which again after adjustment of income of Rs. 38902/- (income from operation & Misc Income) comes to Rs. 1272359 has been legally adjusted against income from capital gain.....
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....in appeal before us. 4. We have heard both the counsel and perused the records. At the outset the ld. Counsel of the assessee submitted that the reopening in this case is bad in as much as there is change of opinion by the AO which is not permitted. The ld. Counsel of the assessee further submitted that there is no live link in the reason recorded for reopening and any tangible material found. The ld. Counsel further submitted that on merits also the issue is in favour of the assessee in view of the Hon'ble Calcutta High Court in the case of CIT vs Ganga Properties Ltd. 199 ITR 94 (Cal.). The ld. DR, on the other hand, relied on the orders of the authorities below. 4.1. Upon careful consideration in this case we note that reopening was do....
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....rties Ltd. 199 ITR 94 also supports the case of the assessee. The allowance of 50% of the administrative expenditure by the ld. CIT(A) on merits is also a point that the expenditure was not apparently disallowable. Hence after due examination AO has formed an opinion that no further disallowance out of administrative expenses is required. In these circumstances we agree with the submissions of the ld. Counsel of the assessee that there was change of opinion and in this view of the matter reopening is not sustainable. In this regard we may refer to the decision of the Hon'ble Apex Court in the case CIT vs Kelvinator of India Ltd. 320 ITR 561 (SC) and the decision of Hon'ble Delhi High Court in the case of CIT vs M/s.Eicher Ltd. 294 ITR 310 (....