TaxTMI 
TaxTMI 
2024 (3) TMI 730
X X X X Extracts X X X X
X X X X Extracts X X X X
....come having escaped assessment. 3. Petitioner is a company incorporated under the Companies Act, 1956, engaged in the business of manufacture and distribution of lubricating oils, greases, brake fluids and speciality products. 4. Petitioner filed its return of income ("ROI") for the AY 2014-15 on 28th November 2014, declaring a total income of Rs. 714,74,74,520/- as per the regular provisions of the Act. In the ROI, the business income was reduced by an amount of Rs. 3,31,35,671/-being provision for doubtful debts, written back, and for slow moving and obsolete inventory written back of Rs. 71,41,142/-. It is Petitioner's case that the reduction was claimed as no reduction thereof had been claimed in the year in which the provision was made. Similarly, in so far as capital gains arising on sale of immovable property at Ballabhgarh was concerned, an amount of Rs. 19,12,99,570/- received from the purchaser Hindustan Syringes and Medical Devices Limited was offered for tax as capital gains for sale of land. This included the consideration received from the purchaser as well as from NHRA towards compulsory acquisition. The balance consideration was reduced from the block of a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e on account of provision for doubtful advance/debts, written back of Rs. 3,31,35,671/-. On verification of other income in the P&L A/c, it is seen that the assessee company credited in respect of provision for doubtful advance written back to the extent of rupees Rs. 25,37,226/- and on account of provision for doubtful debts (net) to the extent of Rs. 1,93,13,921/- total Rs. 2,18,51,147/-. It means assessee claims excess deduction of Rs. 1,12,84,524/- (ie. 3,31,35,671-2,18,51,147). Further, it is also seen that the assessee company claimed deduction in computation of income on account of provisions for stock written back of Rs. 71,41,142/- but this amount not credited to the P&L account nor it is debited from expenditure. Hence, the assessee has claimed excess deduction to the extent of Rs. 1,84,25,666/-(i.e. 1,12,84,524+71,41,142). ii) It is seen from the computation of income and copy of agreement for sale of land dated 29.05.2013 that as per agreement total sale consideration of land at Ballabhgarh is Rs. 21,81,00,000/-. However, at the time of computation of LTCG, assessee company has considered sale consideration for the same at Rs. 19,12,99,570/- and worked out LTCG....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eature in ROI of Petitioner for past years. 12. Mr. Pardiwalla reiterated that each query was already answered by Petitioner, supported with requisite documents in its reply to the notices under Section 142(1) of the Act and each of the aspect was duly reflected in the computation of income and the tax audit. Hence, the original assessment order was passed only when the AO was completely satisfied regarding the explanations offered by Petitioner and it is presumed that the AO had replied the audit queries as such. Petitioner thus, seeks quashing of the impugned notice and the order rejecting its objections as assailed herein. Mr. Pardiwalla also brings to our attention three separate audit memos addressed to the AO by the revenue audit officer, which were duly replied by the AO on the basis of the explanation provided by Petitioner. 13. Mr Suresh Kumar has tried to justify the impugned order also on the merits of the matter. According to him, there was fresh tangible material in the form of three audit memos, which allegedly came into the possession of the AO after completion of the original assessment proceedings. It is for this reason that the AO had reason to believe that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....available to the AO by Petitioner itself. It is thus clear that there is no failure on the part of Petitioner to disclose fully and truly the necessary information. 16. The Department has heavily relied upon the audit objections received from its own revenue Department to justify reopening of assessment. But it is clear from the documents themselves that the AO had sought explanation from Petitioner in respect of queries raised by the audit party. In paragraph 17 of the Petition, Petitioner has averred that "In the present case, before the Respondent No. 1 made his submissions to the revenue audit objection he called for submissions from the Petitioner. As explained hereinabove, each of the said audit objections have been duly explained by the Petitioner's Chartered Accountant through their letters dated 20.02.2018 and 01.11.2019. The Petitioner understands that the then Respondent No. 1 had found the said explanation to be satisfactory and accordingly responded to the revenue audit objections. This is because from January, 2019 upto March 2021 that is for almost 26 months, no corrective steps were taken by the Respondent No. 1 in respect of any of the said items". This has not ....