2016 (9) TMI 111

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.... assessment year 2008-09, the petitioner had filed return of income, in which, one of the major claims was of deduction of Rs. 31.32 crores under Section 80-IB (8A) of the Income Tax Act, 1961 ['the Act' for short]. The Assessing Officer called upon the assessee to justify the claim. In the process, the Assessing Officer also raised several other queries including the following: "An amount of Rs. 4,97,03,172/- shown as other incomes in (Schedule K) and deduction u/s. 80IB(8A) is also claimed in the said income. Please explain the nature of the income and the basis of same income u/s. 80IB(8A)." 3. In response to such queries, the petitioner replied under letter dated 10.08.2011 and produced a note in the form of Annexure H to th....

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....hat the entire receipts of the assessee are from contract research and not own research. It is also pertinent to mention that in the appendix to the form for approval to the renewal there is a specific column namely col. no. 2 and 3 dealing with contract research. The said column seek details of sponsorship fee (if any) name of the sponsors if, any. It is, thus clear that the forms contemplates a sponsor research (contract research) as also falling within the ambit of sec 80IB(8A) of the IT Act, 1961. 31. It is also relevant to note that the prescribed authority after being fully conscious of the Act that the assessee is only a CRO has still though it fit to grant 80IA(8A) of the IT Act, 1961. It thus clear that on a overall reading of t....

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....ome of Rs. 31,32,49,090/- and after claiming the deduction u/s. 80IB(8A) the total income declared is Nil. The assessment was completed u/s. 143(3) r.w.s. 144C of the IT Act by raising a demand of Rs. 13,05,24,219/-. Against the assessment order u/w. 143(3) r.w.s. 144C dated 15.10.2012 assessee has filed appeal before ITAT and the Hon'ble Tribunal had allowed a relief of Rs. 31,32,49,090/- in respect deduction u/s. 80IB(8A) and order Giving Effect to ITAT's order was passed. While giving effect to ITAT's order the deduction of Rs. 31,32,49,090/- u/s. 80IB allowed includes interest income on fixed deposits amounting to Rs. 1,42,50,127/-. As the interest income earned on Fixed Deposits has no direct nexus with the profits de....

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.... assessment year. In that view of the matter, the requirement of the proviso to Section 147 of the Act that income chargeable to tax has escaped assessment due to the failure of the assessee to disclose truly and fully all material facts would have to be satisfied before the Assessing Officer can assume jurisdiction to reopen the assessment. 10. In this context, we see no failure on part of the assessee to disclose any of the material facts. The claim of deduction under Section 80-IB (8A) of Rs. 31.32 crores from the outset included several heads including sum of Rs. 1.42 crores by way of interest from fixed deposits. There was, thus, full disclosure on part of the assessee. Additionally, during the original assessment itself, the Assessin....