TaxTMI 
TaxTMI 
2022 (6) TMI 960
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.... and the order on objections dated 25 January 2022 passed by the Respondent No.4. 2. The Petitioner is a Company incorporated under the Companies Act and is engaged in the business of marketing of animal health products. 3. The Petitioner filed its original return of income in terms of Section 139 of the Act for A.Y. 2014-2015 on 27 November 2014 declaring total income of Rs.901328580. 4. The Petitioner's return was selected for scrutiny assessment. The notice under Section 142(1) of the Act dated 17 June 2016 calling upon the Petitioner to file various details / documents to complete assessment was issued. According to the Petitioner, specific details pertaining to sales and advertisement expenditure were called and the sam....
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....ure or an assumption. 10. It is submitted that the reasons recorded for reopening assessment must be based on new information or material, however, in the present case, the Assessing Officer is seeking to reopen the reassessment proceedings based on the same material facts which were before him when he concluded the original assessment proceedings. It is submitted that reassessment without any additional information amounts to change of opinion and the same is not permissible. 11. It is further submitted that the proviso to Section 147 of the Act provides that where an assessment under Section 143(3) of the Act has been made for relevant assessment year and four years from the end of the relevant assessment year has expired, then no r....
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....ed for distribution under head advertisement and sales promotion of Rs.22676984. It is submitted that such expenditure on account of freebies incurred in violation of the provisions of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2022 is not admissible under Section 37(1) of the Act being expenses prohibited by law. It is submitted that this aspect was not properly examined at the time of original assessment, which resulted in under assessment of income to the tune of Rs.22676984. It is thus submitted that the reopening is based on tangible material and this is not a case of mere change of opinion. It is submitted that petition be dismissed. 14. We have perused the Reasons recorded for reopening the ass....
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....id freebees and claimed it as a deductible expense in its accounts against income. In the instant case, on verification of records, it revealed that the assessee is debiting expenses on cost of samples purchased for distribution under head Advertisement and Sales Promotion of Rs.2,26,76,984/-. As noted above, such expenditure on account of freebees are categorised as incurred in violation of the provisions of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 and therefore not admissible under 37(1) of the Income Tax Act being expenses prohibited by the law, the entire expenditure on account of cost of samples purchased for distribution of Rs.2,26,76,984 is required to be disallowed by the assesse....
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....,580/- for the relevant assessment year 2014-2015 on 27.11.2014, the said return was then processed u/s.143(1) of the Income Tax Act, 1961 and later the case of Petitioner was selected for scrutiny which resulted in Assessment Order dated 26.12.2016 u/s.143(3) of the Act (copy of Order dated 26.12.2016 is at Exhibit - 'C' to the Petition) assessing total income at Rs.91,36,19,550/-. I say that it is subsequently it came to the knowledge of the Assessing Officer that the Petitioner - assessee is debiting certain expenses on cost of samples purchased for distribution under the head advertisement and sales promotion of Rs.2,26,76,984/- such expenditure on account of freebees are categorized as incurred in violation of provisions of the Indian ....
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....ssing Officer has no power to review an assessment which has been concluded. If a period of four years has lapsed from the end of relevant year, the Assessing Officer has to mention what was the tangible material to come to the conclusion that there is an escapement of income from assessment and that there has been failure to fully and truly disclose material fact. After a period of four years even if the Assessing Officer has some tangible material to come to the conclusion that there is an escapement of income from assessment, he cannot exercise the power to reopen unless he discloses what was the material fact which was not truly and fully disclosed by the assessee." 18. In the present case, the Petitioner had truly and fully disclose....