2021 (3) TMI 912

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....and proper be granted in the interest of justice;" 3. The facts giving rise to this Writ Application may be summarized as under: 3.1) The writ-applicant filed his return of income for the Assessment Year 2013-14 on 30th July, 2013, disclosing the total income at Rs. 29,72,118/-. The revised return of income was filed on 26th February, 2014, disclosing the income at Rs. 29,72,118/-. 3.2) Thereafter, the case of the writ-applicant was selected for scrutiny assessment and notices dated 23.6.2015, 6.8.2015 and 18.8.2015 respectively under section 142(1) of the Income Tax Act, 1961 (For short "the Act, 1961") were issued calling upon the writ-applicant to furnish the proof of claims under Chapter-VI of the Act, 1961 with regard to the donation made to the Gujarat Cancer Society and also to furnish a copy of the ledger accounts of Hiramoti Texchem Pvt. Ltd. and Helios & Matherson IT Ltd. regarding the interest paid on capital. The writ-applicant submitted his replies dated 1.7.2015, 17.8.2015 and 1.9.2015 respectively. 3.3) The Assessing Officer passed the assessment order dated 15.10.2015 accepting the returned income. Thereafter, notice under section 148 of the Act, 1961....

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.... 80GGA of Rs. 15,75,000/- (175% of donation made to Gujarat Cancer Soc. Ltd. of Rs. 9,00,000/-). As the assessee was earning only Salary income, STCG on sale of shares and other income, deduction u/s. 80GGA was required to be allowed at 100% of the total donation made to Gujarat Cancer Soc. Ltd. not 175% of the donation made. However, the assessee on a later date i.e. on 26.02.2014 revised the return and income shown in original return of Rs. 5,64,062/- as other income was received as business income. Thereafter, assessee claimed deduction u/s.35(1)(ii) of the I.T.Act and requested the A.O. to allow 175% deduction. The intention of the assessee to revise the return was to claim of his business income, the assessee had produced only a statement of Commodity income (unsigned and selfprepared). The assessee failed to produce any other proof such as bills of commodity income or the Dmat Account. Hence, assessee had changed the nature of other income to business income only to avail enhanced deduction, that too without any proof. Further, on verification of the revised return, it is noticed that the assessee did not claimed deduction u/s. 35(1)(ii) in the revised retur....

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....ted that as stated in te reasons, you want to examine the proof such as bills of commodity income or the demat account. It is submitted that the same amount to fishing and roving inquiry which is also not permissible under law. The Assessee has submitted all the details that were asked for and the assessment was adequately scrutinized. Now the same cannot be relooked in the absence of any new "fresh tangible" material. It is further submitted that the revision of the income was bonafide. There is nothing on record of your goodself to come to a conclusion (that a prudent man could take) that the revision income was only for the purpose of claiming higher deduction. It is submitted that the reasons are erroneous and no income has escaped assessment. 4) It is further submitted that Where transactions between shareholder and company were in nature of current account, provisions of section 2(22)(e) would not be applicable. The cae of the assessee is identical to that decided by the High Court of Culcutta in Gayatri Chakraborty [2018] 94 taxmann.com 244 (Culcutta). It is submitted that the assessee has also paid and received interest on such current account transactions with the....

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....xplanation 2 to section 147 and has held that scope of section 147 after the amendment is large to cover the situation whereby deduction have been wrongly or excessively granted. At the stage of issue of reopening notice what is required is 'reason to belive' and not established fact of escarpment of income, therefore reopening of assessment on basis of certain tangible material is valid. 6. In view of the above mentioned facts of the case, the assessee's objections raised against the reopening proceedings are not acceptable as the case warrants scrutiny on the same lines. Accordingly, the objections so raised are hereby disposed off accordingly." 3.7 Being dissatisfied with the order of the Assessing Officer rejecting the objections raised by the writ applicant to reopen the assessment for the assessment year 2013-2014, the writ-applicant is here before this Court with the present Writ Application. 4. Mr. B.S. Soparkar, the learned counsel appearing for the writ-applicant invited the attention of this Court to the details called for by the Assessing Officer during the course of the scrutiny assessment proceedings to point out that in respect of both the issues for w....

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....dger accounts of Hiramoti Texchem Pvt. Ltd. submitted before the Assessing Officer during the scrutiny assessment to point out that the petitioner had a current account with the said firm reflecting frequent transactions and movement of funds and therefore, the provisions of section 2(22)(e) of the Act, 1961 would not be applicable. It was therefore submitted that the Assessing Officer had rightly not made any addition in the original assessment order. 7. On the other hand, Ms. Mauna Bhatt, the learned senior standing counsel appearing for the Revenue submitted that the assessment is sought to be reopened after taking recourse to all the administrative and legal procedures and after duly recording the reasons for income escaping the assessment. It was further submitted that the record was verified with respect to both the issues and the Assessing Officer being throughly satisfied that income has escaped assessment, thought fit to issue the impugned notice. 8. Ms. Bhatt would submit that although the writ-applicant had filed the copy of annual reports, audited Profit and Loss account and balance sheet along with the return of income, yet the requisite, full and true disclosure....

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....g Officer has changed his opinion with regard to the claim of assessee without considering the provisions of Section 80GGA read with Section 35(1)(ii) which provides deduction in respect of certain donation for the scientific research or rural development to any research association or institution, approved for the purpose of clause (ii) of Sub-section (1) of Section 35 of the Act. The writ-applicant has claimed deduction under Section 35(1)(ii) of the Act and not under Section 80GGA of the Act. This fact is also disclosed by the assessee in the revised return. 14. We may refer to and rely upon the decision of the Supreme Court in the case of Commissioner of Income Tax V/s. Kelvinator of India Ltd., reported in [2010] 320 ITR 561 (SC), wherein, it is held as under: "6. On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only ....