TaxTMI 
TaxTMI 
2023 (6) TMI 886
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.... (b) quash and set aside the impugned order dated 25.02.2022 at Annexure- 'J' to this petition; (c) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the notice at Annexure- 'A' to this petition and stay further proceedings for assessment for A.Y. 2014-15. (d) any other and further relief deemed just and proper be granted in the interest of justice; (e) to provide for the cost of this petition;" 3. Heard, learned Advocate, Mr. Soparkar, appearing for the petitioner and learned Standing Counsel, Mr. Patel, appearing for the petitioner. 4. The brief facts of the case are that the petitioner submitted its return of income for A.Y. 2014-2015 on 27.11.2014, declaring total income at loss of Rs .2,40,35,772/-. 4.1 It appears that the return of income filed by the petitioner was taken-up for scrutiny by the respondents and the petitioner was issued several notices under Section 142(1) of the Income Tax Act, 1961 (hereinafter referred to as, 'the Act'). By notice dated 03.08.2016, pointed questions, relating to the investments of the petitioner, income earned from it and dis-allowance of expen....
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....the assessee to truly and fully disclose all the material facts. It was submitted that, since, the Respondents have acted beyound their jurisdiction, the notice issued under Section 148 of the Act is bad and illegal. 5.3 It was also pointed out that there is no fresh and tangible material with the Respondents to form a belief or opinion that any income has escaped assessment. 5.4 In support of his submissions, learned Advocate, Mr. Soparkar, placed reliance on the decision of the Division Bench of this Court, rendered in the case of the petitioner, itself, in Special Civil Application No. 19990 of 2019, Dated: 05.02.2021, more particularly, the observations made in Paragraphs-12 and 13, thereof. 5.5. Learned Advocate, Mr. Soparkar, also placed reliance on the decision rendered in the case of 'INTERCONTINENTAL (INDIA) VS. DEPUTY COMMISSIONER OF INCOME TAX', (2016) 73 taxmann.com 232 (Gujarat), so also the decision of this Court, rendered in the case of 'JIVRAJ TEA LIMITED VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1)' (2017) 80 taxmann.Com 108 (Gujarat). 5.6 It was submitted that, since, the issue involved in this matter is covered by the aforesaid decisions, wit....
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....reat detail and clarified that section 14A of the Act provides for disallowance of expenditure even where taxpayer in particular year has not earned any exempted income. On verification of the records it is revealed that the assessee had invested Rs. 204,71,98,478/- in equity shares of Applewoods Estate Pvt. Ltd.. Further, the assessee had debited interest expenditure of Rs. 3,27,05,394/ during the year, but no disallowance was made by the assessee either in the computation of income not the assessing officer. Disallowance of expenditure under the provision of the Act is worked out as under: NAME Rs. (A) Interest Expense Rs. 3,27,05,394/- (B) Average Investment (204,71,76,505 + 204,72,20,452) / 2 Rs. 204,71,98,478/- (C) Average asset (315,17,68,883 + 298,67,86,985) / 2 Rs. 306,92,77,934/- Expenditure disallowance under Rule 8D(i) = A X B / C Rs. 2,18,14,392/- (a) Expenditure dis-allowance under Rule 8D(ii) 0.5% of B Rs. 1,02,35,992/- (b) Total (a + b) Rs. 3,20,50,384/- This resulted into under assessment of income of Rs. 3,20,50,384/-." 7.4 Thus, from the aforesaid reasons recorded by Respondent No.2, it is clear that Respond....
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....er indicates that, the assessee had disclosed all materials fully and truly before the respondent at the time of original assessment. Even on merits, it is settled that, disallowance under Section 14A of the Act cannot exceed the exempt income of the assessee. Thus, the twin conditions as provided under Section 147 of the Act, which are condition precedent for reopening of the assessment made after 4 years are not satisfied." 7.7 In the case of 'INTERCONTINENTAL (INDIA)' (Supra), this Court has observed as under at Paragraph-5 thereof; "5. From the aforesaid material on record, it appears that attempt on part of the revenue is to reopen the assessment after scrutiny assessment after a period of more than four years. In view of the settled position of law, in absence of any circumstances about nondisclosure of true and full material on part of the assessee, reopening is not permitted. In the present case, in absence of such contingency as is reflected from the record of the case, it is not open for the respondent authority to exercise power of reopening of assessment which had already become final. While submitting that the petitioner had truly and fully disclosed each a....