2020 (3) TMI 783

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Ltd., is engaged in the manufacture of medical consumables, filed its return of income on 16.10.2007 for assessment year 2007-08 admitting NIL income after set off of brought forward losses and unabsorbed depreciation. Subsequently, a revised return was filed on 10.09.2008. The original assessment was completed under Section 143(3) of the Act on 08.09.2011. Subsequently, the A.O. reopened the assessment by issue of a notice under Section.148 dated 19.03.2012 and reassessed the income under Section 143(3) r.w.s. 147 of the Act on 18.03.2013 determining the assessed total income at Rs. 17,06,62,317/- by making additions towards disallowance under Section 37(1) of the Act at Rs. 2,40,13,212/- and waiver of principal component under One Tim....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r Section 147 of the Act, which was earlier made under Section.143(3) of the Act, but deleted by the CIT(A) and confirmed by the Income Tax Appellate Tribunal (ITAT). 3.1 The Ld. A.R. further submitted that the Commissioner also failed to appreciate the fact that the Department is in appeal against the order of ITAT before Hon'ble Jurisdictional High Court and hence the A.O. had no jurisdiction to consider the same issue in re-opened assessment proceedings. Therefore, the Ld. A.R. submitted that the reopening made by the A.O. is not valid under the law and hence, he pleaded that assessment proceedings should be quashed. 4. Further, Ld. A.R. submitted that the assessee company was established for manufacture of surgical consumable. Due....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sment year for disallowing certain expenditure as the assessee had not carried any business activity during the above year. Therefore, the Ld. D.R submitted that the reopening is validly made and hence, he vehemently supported the orders of the lower authorities. 5.1 The Ld. A.R. submitted that the original assessment under Section 143 was completed on 24.12.2009. In the assessment order, the fact relating to non-carrying of business activity has been duly considered and the fact that in that relevant previous year, the assessee had only income under Section 41(1), which was substantial also duly reckoned. Subsequently, the assessee filed a petition under Section 154 of the Act requiring the A.O. to adjust the carry forward losses on 28.....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t was reopened by issue of notice under Section 148 on 19.03.2012 to disallow the expenditure of Rs. .3,83,62,305/- as the assessee had not carried on any business activity during the year. The claim of expenditure, therefore, was not in relation to the income offered. However, in the re-assessment made under Section 143(3) r.w.s.147 dated 18.03.2013, the A.O., inter alia made disallowance of Rs. .2,23,92,916/- towards interest and finance charges and waiver of principal component under O.T.S Scheme at Rs. .7,74,73,061/-. 6.1 Thus, it is clear that the reason for reopening the assessment was for assessing the expenditure claimed at Rs. 3,83,62,305/- and not to consider the waiver of principal component under O.T.S Scheme. Since notice....