TaxTMI 
TaxTMI 
2020 (2) TMI 95
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....more appropriate in order to grant interim relief to the petitioner. d. Any other and further relief deemed just and proper be granted in the interest of justice. e. To provide for the cost of this petition." 3 Thus, it appears that the writ applicant seeks to challenge the impugned notice of reopening dated 26th March 2018 issued under Section 148 of the Income Tax Act, 1961 [for short, 'the Act, 1961'] for the assessment year 2011-12 beyond the four years. 4 The writ applicant filed his return of income for A.Y. 2011-12 declaring gross total income at Rs. 11,89,58,848/. 5 The case was selected for scrutiny. The assessee replied to the specific queries raised by the Assessing Officer. The scrutiny assessment was completed under Section 143(3) vide order dated 30th March 2014 assessing the income at Rs,15,07,12,217/after making disallowance of Rs. 5,77,70,489/on different counts. 6 It appears that the writ applicant being dissatisfied with the aforesaid addition preferred an appeal before the Commissioner of Income Tax (Appeals). The CIT(A) deleted the disallowance made by the Assessing Officer. The Revenue preferred appeal against the CIT(A)'s order befor....
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....e common expenses, in nature of administrative expenses need to be allocated between both theline of business ni order to arrive at true picture. Since one line of business is a trading concern (tea division) and other is manufacturing concern (general of electricity), the ratio of turnover cannot be a correct ratio owning in the difference in their basic character. Turnover of a trading concern can be high, without requirement of higher capital and efforts, but the profit percentage is low, as compare to manufacturing concern. Hence the allocation of common cost, owning to difference is character of both lines of business, the average of profit of ratio and the gross assets ratio. Gross Block as per schedules - 5 of audit report Total assets value Windmill assets value Percentage of windmill block to total blok 327360474 243954661 74.52% C. Average of A and B above: (74.52 + 28.58)/2 = 51.58% Hence 51.55% of the administrative expenses, amounting to Rs. 1,84,42,135/should be debited to the Windmill division, thereby reducing their total income and the income eligible for deduction u/s. 80IA by an equivalent amount the tax effect of which amounts to Rs. ....
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....e reads thus: 1. "The petitioner has challenged a notice dated 30.03.2015 issued by the respondent Assessing Officer for reopening the assessment of the petitioner for the assessment year 200809. 2. Brief facts are as under. 3. The petitioner is a company registered under the Companies Act. For the assessment year 200809, the petitioner filed return of income declaring total income of Rs. 3.75 crores (rounded off). The return was taken in scrutiny. The Assessing Officer passed order under section 143(3) of the Act on 22.12.2012 assessing assessee's total income at Rs. 13.16 crores. To reopen such assessment, impugned notice came to be issued. The Assessing Officer had recorded following reasons for issuing the notice. In the present case, assessment u/s. 143(3) of the Act was completed on 22.12.2010 by making following additions / disallowances: (i) Disallowance u/s.40A(2)(b) of the Act. (ii) Disallowance of deduction claimed u/s. 80IA(4) of the Act. (iii) Disallowance u/s.14A of the Act. During the year under consideration, the assessee company has shown turnover of Rs. 79,19,95,350/& the Gross profit of Rs. 13,24,86,180/( GP margin 16.73%) from Tea Div....
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....o. A. Calculation of gross asset ratio: Gross Block as per schedule5 of audit report Total assets value Windmill asset value Percentage of windmill block to total block 2,75,86,028 8,02,87,769 74.42% B. Calculation of profit ratio. Total business income Income from windmill Percentage of windmill income to total business income 5,76,55,839 1,81,96,506 31.56% C. Average of A and B above: (74.42 + 31.56)/2 = 52.99% Hence, 52.99% of the administrative expenses and the other expenses amounting to Rs. 2,30,92,136/should be debited to the windmill divisions thereby reducing their total income and the income eligible for deduction u/s.80IA by an equivalent amount and conversely the income of the other business other than windmill would accordingly increase. An amount of Rs. 1,22,36,522/is to be debited to the windmill division and thereby reducing the total income eligible for deduction claimed u/s. 80IA(4) of the Act. In view of the above facts, the undersinged have reason to believe that the amount of Rs. 1,22,36,522/is required to be taxed in the tea division of the assessee company as well as excessive deduction was allowed u/s.80IA(4) o....
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....the then learned AO. (f) Lastly but most importantly, it is very pertinent to note that the other expenses of Rs. 58,43,886/which have been held to be in the nature of common expenses and which are proposed to be bifurcated between the 2 divisions of the company, already stands fully disallowed in the computation of income except an amount of Rs. 36,812/, as being in the nature of donation, interest on late payment of TDS, loss on sale of assets, etc. and hence, there is no question of these expenses being wrongly claimed in the tea division instead of the windmill division, to claim higher deduction u/s. 80IA and therefore, the impugned reopening has been clearly made without proper verification of facts or application of mind. From the aforesaid facts there remains no doubt that all the expenses for each of the divisions stands verified and accepted by the then learned AO and therefore, it gets established that there is no failure on the part of our company to disclose fully and truly all the material facts necessary for assessment. Thus, in the absence of any failure on the part of our company to disclose fully and truly all the material facts necessary for the assessme....
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....nd also presented before the Assessing Officer during the course of assessment. This Court recorded a clear finding that there was no failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. In such circumstances, the Coordinate Bench, ultimately, held that the notice for reopening which was issued beyond a period four years should fail. 11 The writ applicant pointed out while raising his objections that there was no failure on his part to disclose truly and fully any material fact. He pointed out that his assessments were being examined by the Assessing Officer for the original assessment. The reopening on the basis of reanalysis of the existing material was nothing, but a change of opinion and the same is not permissible. He pointed out that no specific information has been received by the Assessing Officer to firmly believe that the income chargeable is escaped the assessment and as noted above, at the cost of repetition, he pointed out that reassessment was sought for in the assessee's own case for A.Y. 2008-09 which came to be questioned by this Court in the Special Civil Application No.4005 of 2016. 12 Having heard t....