2017 (8) TMI 1241

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....lid without appreciating the fact that the amount of interest liable to be disallowed u/s 40(a)(ia) of the Act was due to non deduction of tax was not assessed to tax on the day when order was passed by him meaning thereby that this amount escaped assessment though on the day of reopening, it was assessed to tax. 2. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any before or during the hearing of this appeal." 2. Facts of the case, in brief, are that the assessee's case was reopened u/s 147/148 of the Income Tax Act, 1961 (the Act) by issuing notice dated 15.01.2009 to the assessee. The reasons for reopening are as under. "A consolidated order u/s 201 (1) of the IT Ac....

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....f commencement of commercial operation. Thus, the expenditure incurred relates to pre-commencement of business and same has to be treated as capital expenditure. In view of the above. I have reason to believe that an amount to the extent mentioned above chargeable to tax has escaped assessment for the assessment year 2005-06 and. hence, clearly attracts the provisions of clause (b) of Explanation 2 to Section 147 of the IT Act, therefore, notice u/s 148 of the Act is being issued. " 2.1. In the course of original assessment proceedings u/s 143(3) of the Act the A.O. had disallowed the entire amount of interest paid to ABN Amro Bank Stockholm Branch of Rs. 1,84,91,00,000/- on term loan taken. In the reassessment proceedings the A.O. has ob....

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.... Act. The assessment in this case was reopened on the ground that the interest was paid to ABN Amro Bank without deduction of tax at source and therefore the same should have been disallowed U/S 40(a)(i) of the Act. From the submissions made it is observed that the AO at the time of the original assessment order U/S 143(3) of the Act dated 31.12.2007 had disallowed the entire interest claim of Rs. 1,84,91,00,000/- on term loan. The interest paid to ABN Amro of Rs. 14,73,65,750/- was included in the interest amount of Rs. 1,84,91,00,000/-. Therefore, as things stood at the time when the AO issued notice for re-opening U/S 147/148 on 15.1.2009, the entire interest paid to ABN Amro Bank already stood disallowed in the assessment order, which w....