TaxTMI 
TaxTMI 
2022 (5) TMI 941
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....s to believe solely on the basis of audit objection without any independent reason based on possession of tangible material/information with the Ld. AO having live nexus and close link with the formation of belief that the income has escaped assessment; and 1.3 that the reassessment proceedings were based on change of opinion on the same set of facts which were existing and considered at the time of original assessment concluded under section 143(3) of the Act. 2. Without prejudice to the above grounds, the Ld. CIT(A) on the facts and in |he circumstances of the case and in law, erred in confirming the addition of prior period expenses amounting to INR 1,08,63,174 in the computation of book profits made by the the Ld. AO, without appreciating that profits as shown in the profit and loss account for the relevant assessment year prepared in accordance with the provisions of Companies Act, 1956 is to be considered while computing the 'book profits' as per Explanation 1 to section 115JB of the Act and the said expense was shown separately in the profit and loss account only due to specific requirement of the Accounting Standards prescribed by the Institute of Chartere....
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....lleged incorrect computation of book profit under 115JB of the Act (audit objection enclosed at page 1 of the Paper book). In respect to the same, the Appellant filed a submission dated March 30, 2017 before the Ld. AO whereby it submitted that the computation of the book profits under section 115JB of the Act was correct and the Appellant has also obtained and submitted the certificate from Chartered Accountant i.e. Form 29B in this regard. 7. Thereafter, notice dated 31 .03. 2017 u/s 148 of the Act and a subsequent clarification letter dated May 1, 2017 (notice u/ s 148 along with letter, page 2 to 3 PB), was issued to the Appellant requiring the Appellant to file its return of income, which was duly complied by the Appellant. 8. Further, the Appellant was provided reasons recorded for initiation of reassessment proceedings under section 147/148 of the Act, in respect of which the Appellant filed its objections vide letter dated July 7, 2017 against the initiation of reassessment proceedings. The said objections were disposed of by the AO vide order dated October 24, 2017. Subsequently, a detailed submission on merits of the case was filed by the Appellant vide submission d....
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.... 147/143(3) dated 20 .12.2017 disallowed an amount of Rs.1,08,63,174 /- and accordingly recomputed the book profits u/s 115JB to Rs.27,70,33,614 /-. 14. With reference to the reopening, the provisions Section 147 are as under: " Income escaping assessment. 147.If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or re- compute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub- section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to ....
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....omputed; (ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income- tax authority, under sub- section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (d) where a person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3 .- For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub- section (2) of section 148. Explanation 4.- For the removal of doubts, it is hereby clarified that the provisions of this sect....