TaxTMI 
TaxTMI 
2017 (5) TMI 108
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....eding formreview or change of opinion. 3. On the facts and circumstances of the case and in law, the CIT(A) has erred indeleting the addition of Rs. 1,40,33,000/- made on account of disallowance u/s 43Bwithout examining the facts of the case. 4. The appellant craves leave to add, alter or amend any ground of appeal raisedabove at the time of hearing." 3. Brief facts qua the issue of reopening u/s 147 as challenged by the revenue vide ground nos. 1 and 2 are that, the assessee had filed its return of income on 30.10.2004 for the A.Y. 2004-05, declaring income of Rs. 4,15,84,748/- which was processed u/s 143(1). Later on, revised return of income was filed on 29.3.2006 which was also processed on 31.3.2006. The said revised return was selected for scrutiny and consequently, assessment order was passed u/s 143(3) vide order dated 27.12.2006 at an income of Rs. 4,62,11,350/-. The said order of the Assessing Officer (dated 27.12.2006) was later on found to be erroneous and prejudicial to the interest of the revenue by the Learned CIT (Central), New Delhi under his revisionary jurisdiction u/s 263.In pursuance thereof, again reassessment order was passed afresh vide ....
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....of the components of 'interest accrued but not due'. The assessee has claimed deduction of interest amount in contravention to the amended provisions of section 43B." 3. Thus, the assessee's case was reopened for the purpose of disallowance u/s 43B for sum of Rs. 1,40,33,000/- on the ground that the said amount of interest was payable and had not been actually paid before the due date of filing of return of income. As noted by the ld. Assessing Officer, the assessee did not file any return of income in response to notice u/s 148 and assessee's objection regarding reopening had also been disposed off by him vide letter dated 03.11.2011. Since, there was not much response from the assessee, he therefore, added the amount of Rs. 1,40,33,000/- u/s 43B. 4. Before the Learned CIT (Appeals), the assessee after explaining the entire background of the case and previous history of various assessments made in the case of the assessee, submitted that in this case the reopening u/s 147 has been done beyond the period of 4 years from the end of the relevant assessment year and without there being any failure on the part of the assessee to disclose truly and fully all material facts, the as....
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....riginal assessment was completed by the Assessing Officer u/s 143(3) of the Act on 27.12.2006. The details of the interest payable were filed by the appellant before the Assessing Officer vide letter dated 24th March, 2011. It was categorically stated by the assessee that the provisions of section 43B are not applicable as the interest is not payable to the Public financial institutions and scheduled banks. The records do not show any tangible material that created the reason to believe that the income had escaped the assessment. The reassessment proceedings amount to a review or change of opinion. In view of the judicial pronouncements discussed above, it is held that the reassessment proceedings are bad in law and the consequent assessment order passed by the Assessing Officer is null and void." 5. Before us the ld. DR, strongly relied upon the order of the Assessing Officer and submitted that even though the case has been reopened on the basis of audit objection but the fact remains that the prima facie there are a wrong claim of interest payable which could not have been allowed in terms of u/s 43B. Therefore, the Assessing Officer has rightly acquired jurisdiction for reope....
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....nce sheet. In response thereof, the entire details were furnished by the assessee along with the details of liabilities and also the interest accrued but not due and interest payable as appearing in the balance sheet. Based on such scrutiny assessee's claim was allowed by the AO. Once all these facts relating to interest and claim of deduction, both in relation to interest paid and interest payable were there before the Assessing Officer during the time of the original assessment proceedings, then without there being tangible material coming on record, it cannot be held that, there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for the purposes of assessment. It is a trite law that, where an assessment has been completed u/s 143(3), then there is a limitation upon the AO to take any action for reopening the assessment u/s 147 beyond the period of 4 years from the end of the relevant assessment year. To overcome such a limitation for acquiring jurisdiction u/s 147, it is mandatory for the Assessing Officer to bring out on record that the assessee has failed to disclose fully and truly all material facts necessary for the assessmen....
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....sessee has paid interest amounting to Rs. 36.44 crores on the loans. He further noted that the assessee has also advanced a sum of Rs. 811.90 lakhs to its 100% subsidiary company, 'M/s. Satara Rubber & Chemicals Ltd'. In view of these facts the Assessing Officer required the assessee to substantiate its claim of interest amount and also why the proportionate interest should not be disallowed. The assessee in response submitted that it has incurred certain expenses on behalf of its subsidiary company which was shown as recoverable loan and therefore, no amount of interest was attributable on notional basis. The ld. Assessing Officer, held that since it was interest free loan given to the subsidiary, therefore, disallowance of interest has to be made in view of the decision of Hon'ble Punjab and Haryana High Court in the case of Abhishek Industries Ltd. (286 ITR 1) and accordingly, worked out the disallowance at Rs. 96,42,800/- which was @ 12%. 12. Before the Learned CIT (Appeals), assessee submitted that, first of all, the said loan (in the form of incurring the expenditure on behalf of its subsidiary) was given out of business expediency and commercial relation between the asses....