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TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 1083
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.... has been preferred by the assessee.. 2.0 The brief facts of the case are that the return of income was filed declaring an income of Rs. 8,84,23,980/-. Subsequently, the assessment was completed an income of Rs. 9,59,45,806/- u/s 143(3) of the Income tax Act, 1961 (hereinafter called 'the Act') on 26.12.2007. Thereafter, a notice u/s 148 of the Act was issued on 02.11.2011 after recording of reasons. In response to the said notice, the assessee submitted that the original return of income filed by the assessee may be treated as the return filed in compliance of notice issued u/s 148 of the Act. The reasons recorded for the re-opening are as under: "During the year, the assessee has claimed an amount of Rs. 2,05,16,000/- for running and m....
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....ll the three additions on merits and also observed that in view of all the additions having been deleted, there was no necessity to adjudicate on the legal issue of validity of assumption of jurisdiction for re-assessment. 2.3 Aggrieved, the Department is now in appeal before this Tribunal challenging the deletion of additions on merits whereas the assessee has filed memorandum of Cross Objections in which the assumption of jurisdiction u/s 148 of the Act has been challenged. The respective grounds raised by both the parties are as under: ITA No.5302/Del/2014 by the Department "1. The Ld. CIT (A) erred in deleting the addition made by the AO on account of running and maintenance expenses of foreign office amounting to Rs. 2,05,16,000/....
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....ng by the Assessing Officer that there had been any non-disclosure of material relevant facts by the assessee with respect to the issues which were the subject matter of re-opening. The Ld. Authorized Representative also submitted that the issues which were the subject matter of the reopening were duly disclosed in the audited financial statements of the assessee. It was also submitted that the issue pertaining to foreign office expenses had arisen after an audit objection being raised by the internal audit party of the Department and, therefore, the reopening was bad in law. 4.0 Per contra, the Ld. SR. Departmental Representative (DR) submitted that the assumption of jurisdiction u/s 148 was valid in law. 5.0 Arguing for the Department'....
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....een claimed that all the payments made to Mr. Danny Williams were made in foreign currency as per the norms of RBI through State Bank of India. The Ld. CIT (A), while deleting the addition, has noted that the Assessing Officer has not doubted the genuineness of the expenditure incurred and the Ld. CIT (A) has also noted that the expenditure incurred is duly supported by documentary evidences like vouchers, Bank Advices, and correspondences. A perusal of the assessment order passed u/s 147 of the Act shows that the Assessing Officer has based the addition merely on the reasons recorded for reopening wherein it has been stated that this expenditure was not allowable as per the provisions of the Act. How and why this expenditure was not allowa....
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....diately preceding assessment year, the assessee company had incurred quota expenses amounting to Rs. 1,85,92,535/- and since this expenditure did not result in creation of any tangible or intangible assets, it was necessarily incurred as part of the profit earning process and was, therefore, revenue in nature. In the Assessment Order passed u/s 147 of the Act, the Assessing Officer has not pointed out any reason for treating this expenditure as capital expenditure but has only as referred to the reasons recorded for reopening and has disallowed the same. Even the Ld. SR. DR could not point out any perversity in the findings of the Ld. CIT (A) on the issue. The Ld. CIT (A) has also placed reliance on a judgment of the Hon'ble Madras High Cou....