TaxTMI 
TaxTMI 
2018 (4) TMI 1000
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.... 3. Brief facts are, for the assessment year under dispute, assessee filed its return of income originally on 29th November 2008, declaring total income of Rs. 5,67,77,820. Assessment in case of the assessee was completed under section 143(3) of the Act vide order dated 21st December 2010, accepting the returned income. Subsequently, the Assessing Officer on verifying the tax audit report was of the view that while completing the original assessment the Assessing Officer has not disallowed an amount of Rs. 10,50,058 being penalty paid to BMC towards Octroi. Thus, the Assessing Officer being of the opinion that due to non-disallowance of the aforesaid amount there is escapement of income proceeded to re-open the assessment under section 147 ....
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....f the assessment since the re-opening was within a period of four years and the Assessing Officer has recorded reasons with regard to escapement of income. As regards the merits of the issue relating to disallowance of Rs. 10,50,058, the Commissioner (Appeals) after verifying the tax audit report filed by the assessee found that the assessee has disallowed an amount of Rs. 12,76,591, on account of penalty paid which does not include the amount of Rs. 10,50,058. He observed, as per the submissions of the assessee the amount of Rs. 10,50,058 represents Octroi duty for the earlier years which was paid during the impugned assessment year. The learned Commissioner (Appeals) observed, the claim of the assessee is not allowable firstly; because th....
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....been shown as penalty. He submitted that the amount of Rs. 11,18,335, shown as penalty has been disallowed by the assessee itself. As regards the observations of the learned Commissioner (Appeals) that the payment of Octroi pertains to earlier year and the assessee has already claimed deduction of the said amount, the learned Authorised Representative submitted, though, the Octroi duty in question related to purchases made in the earlier, however, the Octroi agent through whom such payment was intended to be made committed forgery and without actually making payment to the BMC furnished forged Octroi receipt to the assessee on the basis of which assessee claimed the Octroi payment as deduction. However, due to non-receipt of Octroi duty, th....
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.... the contrary, the Assessing Officer has merely relied upon the tax audit report to form a belief that deduction of an amount of Rs. 10,50,058, being in the nature of penalty has been wrongly allowed. Except the tax audit report, the Assessing Officer has not referred to any other material indicating escapement of income. Undisputedly, the tax audit report was available before the Assessing Officer at the time of original assessment and there is no reason to infer that the Assessing Officer has not examined the tax audit report at the time of original assessment considering the fact that it is the primary document which reveals assessee's financial affairs for the year. That being the case, it has to be concluded that while completing the o....