TaxTMI 
TaxTMI 
2015 (6) TMI 855
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....e both the appeals can be heard together. We therefore proceed to dispose of both the appeals by a consolidated order for the sake of convenience. We thus proceed with the facts of A.Y. 2006-07 in ITA No. 2444/AHD/2011. 3. The relevant facts as culled out from the material on record are as under. 4. Assessee is a company stated to be engaged in the business of manufacturing of fertilizers and chemicals. Assessee filed its original return of income for A.Y. 2006-07 on 29.12.2006 declaring total income of Rs. 49,78,97,223/- after claiming set off of brought forward losses and carry forward depreciation. Thereafter Assessee filed revised return of income on 30.10.2007. The assessment was initially framed under section 143(3) vide order d....
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....as no escapement of income 3. The learned CIT(A) has erred in confirming the disallowance of interest expenditure u/s 14A despite the fact that the appellant had sufficient own funds and that the AO had not established nexus between investment and borrowed funds. It is submitted that it be so held now. 4. The learned CIT(A) has erred in upholding the disallowance of Rs. 50 Lacs on account of administrative expenses relatable to exempt income which was unreasonable having regard to the facts of the case and derived at on an adhoc basis. It is submitted that it be so held now and the disallowance confirmed by CIT(A) be deleted. 5. Ground no. 1 & 2 are in connection with challenging the reopening of assessment. 6. Before us, ld. A.....
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....ed in the original assessment and therefore the reassessment was not permissible. He further placed reliance on the decision in the case of CIT vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) , Gujarat Power Corporation Ltd. Vs. ACIT (2012) 26 Taxman.com 51 (Guj) . With respect to the addition of FBT to book profit, the ld. A.R. submitted in the reason for reopening it was stated that FBT was not added to the profits for computing book profits u/s. 115JB and therefore there was escapement of income. The ld. A.R. submitted that question no. 103 of Circlular 8/05 issued by CBDT clearly mentions that FBT is allowable as deduction while computing book profit and further the circular issued by CBDT are binding on the Assessing Officer. He f....
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.... of the income has been disclosed by the Assessee and the A.O has taken a particular view on those disclosed facts while passing the assessment order in regular proceedings, then without anything more, it would not be open for the A.O to re-open the assessment proceedings as reopening in such a case would be reopening on account of change of opinion. In the present case the reasons for re-opening indicate that the re-opening has been initiated on two grounds namely disallowance u/s. 14A and on account of non addition of FBT to determine the book profit for the purpose of computing tax u/s. 115JB. With respect to the disallowance u/s. 14A we find that A.O at para 5 of the original assessment order passed on 26.12.2008 after considering the s....
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....avour of the Assessee, the other two grounds of the Assessee have become academic and therefore not adjudicated. 8. In the result, the appeal of the Assessee is allowed. 9. We now proceed with ITA No. 2445/AHD/2011 for A.Y. 2007-08. The grounds raised by Assessee reads as under:- 1. The order passed by the learned CIT (A) is erroneous and contrary to the provisions of law & facts of the case and therefore needs to be suitably modified. It is submitted that it be so done now. 2. The learned CIT(A) has erred in upholding the action of the A.O. in reopening the assessment u/s 147 of the Act despite the fact that: (i) There was no tangible material other than that already on record at time of original assessment (ii) Reopening....