TaxTMI 
TaxTMI 
2014 (11) TMI 765
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....ramed vide order dated 8.9.2011 is bad in the 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 ....
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....edings the assessee in this regard has submitted as under 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.....
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..... 12544000 coming under the head administrative expenditure does not find place in the above details & thus it is a matter on record that such expenditure has not 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 aga....
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....ld. CIT(A) proceeded to hold that the disallowance of the expenditure should be restricted to 50% of the claim of the assessee. Against the above order the assessee is 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.....
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....atter the entire expenditure claimed in administrative expenses was not to be disallowed apparently. The Hon'ble Calcutta High Court decision in the case of CIT vs Ganga Properties 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 H....