TaxTMI 
TaxTMI 
2016 (7) TMI 462
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....ly audited. The Assessing Officer took the return of the petitioner in scrutiny, during which, he raised various queries. The Assessing Officer framed the order of assessment on 05.02.2013 making no additions. To reopen this assessment, impugned notice came to be issued which may be noticed, was done within a period of four years from the relevant assessment year. In order to issue the notice, the Assessing Officer had recorded following reasons: "In this case the assessee filed the return of income on 15.10.2010 showing total income at Rs.NIL/. An order u/s. 143(3) of the IT Act passed on 05.02.2013 determining total income at Rs.NIL/. Subsequently, on verification of the details it is noticed that the assessee company engaged in the business of renting of property had shown receipts from rent at Rs. 4,48,01,028/- . The assessee claimed statutory deduction Rs. 1,34,40,308/- u/ s. 24(i) of the IT Act. The assessee also claimed deduction of Rs. 7,28,00,166/- on account of interest paid on loan. It was further seen that in the balance sheet as on 31.03.2010 there is no unsecured loan. However, the unsecured loan in the form of Optionally Fully Convertible Debentures (OFCD) at R....
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.... of past loans and the expenditure of interest in connection with such borrowings would be allowable in terms of proviso to section 24B of the Act. III. Counsel lastly contended that the entire issue was raised by the audit party. Though the Assessing Officer was convinced that the interest expenditure cannot be disallowed, only at the instance of the audit party, the impugned notice for reopening of assessment came to be issued. 5. On the other hand, learned counsel Shri Pranav Desai for the department contended that in the original assessment, the question of allowing expenditure of the assessee company towards interest on borrowed funds which were never used for acquiring house property was never examined by the Assessing Officer. Notice for reopening which was issued within the period of four years by recording proper reasons is therefore, valid. Counsel further submitted that whether there has been escapement of income, can be judged only during the reassessment proceedings and cannot be gone into in the present petition. He lastly contended that the present respondent- Assessing Officer had not acted at the behest of audit party but independently held a belief that inco....
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.... Fixed Assets Rs.206719/- 13) Interest on TDS Rs.1422617/- 14) House Keeping Expenses Rs.1143549/- 15) Legal & Professional Charges Rs.1034056/- 16) Security Service Charges Rs.1085541/- ... ... 20. Please furnish details of payment to persons specified in Section 40A(2)(6). Specify nature of work/Service these persons are doing for the company. Produce evidence of qualifications these persons are having with respect to job assigned to them with due justification as to why this claim should not be considered excessive.? " 7. Under letter dated 24.12.2012, the petitioner replied to such queries as under: Sr. No. Particulars Remarks 1. A brief note on the nature of activities under taken during the year relevant to A.Y 2010-11. Also furnish the address of the office, branches and other premises if any and the nature of activities conducted from these premises. Please give details of sister concerns, if any, with which you are dealing. The Company has acquired a building (mall) at Rajkot, Gujarat on single ownership basis for the purpose of generating rental income from immovable properties. For address of office, br....
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....f the Act dated 26/08/2011 was issued and duly served on the assessee company by speed post. Notice u/s. 142(1) dated 03/01/2012 along with questionnaire was issued and duly served on the assessee. Due to change in incumbency, notice u/s. 143(2) of the Act dated 11/10/2012 was issued and served on assessee on 12/10/2012 by speed post. Further notice u/s. 142(1) of the Act dated 22/10/2012 was issued calling for certain details/Information/documents which was served on Assessee Company on 23/10/2012. 3. In response to the above notices, General Manager of the assessee company Shri K. Ramakrishnan attended and furnished the details/information etc. from time to time. The same have been verified. The Books of Account maintained by the assessee were produced and the same were test checked. He case is heard and discussed. 4. Subject to the above remarks, the total income of the assessee company is computed as under: Total Income as per return Rs. NIL/- TOTAL ASSESSED INCOME Rs. NIL/-" 9. It can thus, be seen that the entire claim of interest expenditure was before the Assessing Officer during the original assessment proceedings. The Assessing Officer had raised seve....