TaxTMI 
TaxTMI 
2024 (5) TMI 228
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....ho is an individual, was engaged in the business of providing financial services and was also acting as a commission agent. [4] The petitioner filed return of income for the Assessment Year 2014-15 on 28th November 2014 declaring total income at Rs. 20,76,35,110/-. [5] The case of the petitioner was selected for scrutiny. The Assessing Officer issued notice dated 18th August 2016 and the petitioner was called upon to furnish various details including working of disallowance under Section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. [6] The petitioner, vide reply dated 15th September 2016, submitted that he had invested in unlisted shares of companies and has not earned any dividend income under Section 10(34) of the Act on such investments and no disallowance under Section 14A of the Act is made in the return of income. [7] The petitioner received another notice dated 3rd October 2016 requiring him to show cause as to why the provisions of Section 14A of the Act read with Rule 8D of the I.T. Rules should not be invoked for making necessary disallowance. The petitioner again replied by letter dated 24th October 2016 reiterating that no new investment w....
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..../2013 9,16,90,00,028 7 Average value of total assets 6,90,68,33,955 8 Disallowance u/s 14A read with rule 8D 8(a) (Interest expenditure x Average value of investments)/(Average value of total assets)-Rule 8D(ii) 1,51,83,313 8(b) 0.5% of average investment - Rule 8D(ii) 13,35,500 Total disallowance u/s 14A read with rule 8D Rs. 1,65,18,813 While computing total income disallowance u/s 14A read with rule 8D was not made. While as per section 14A read with Rule 8D the disallowance of Rs. 1,65,18,813 is required to be made as shown in table above: 1. In view of the facts above, I have reason to believe that income chargeable to tax to the tune of Rs. 1,65,18,813 has escaped assessment in the hands of the assessee within the meaning of section 147 of the IT Act and hence I am satisfied that it is a fit case for reopening the assessment under section 147 of the IT Act." [10] Learned Senior Advocate Mr. Tushar Hemani for the petitioner submitted that the impugned notice dated 30th March 2021 is without jurisdiction as the reopening is based on change of opinion by the Assessing Officer. It was submitted that the Asse....
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....he respondent has no jurisdiction to issue such notice and in spite of raising the objections by the petitioner, the same were discarded relying upon the record only by order dated 23rd February 2022. [10.5] In support of his submissions, learned Senior Advocate Mr. Hemani has referred to and relied upon the decision of the Hon'ble Supreme Court in the case of CIT, Delhi vs. Kelvinator of India reported in reported in 2010 (2) SCC 723. [11] On the other hand, learned Senior Standing Counsel Mr. Nikunt Raval for the respondents submitted that the petitioner has an alternative efficacious remedy in case of reassessment order is passed making addition on the basis of impugned notice. It was submitted that the respondent has reopened the assessment as the petitioner has claimed exempt income of Rs. 3,93,472/- on account of dividend as per Schedule 13 of the profit and loss account. The petitioner has claimed interest expenses of Rs. 39,26,19,331/- and the petitioner had investments of Rs. 26,71,00,000/- in unquoted shares of Spring Valley Organizers Pvt. Ltd. and Satyaprabhu Infrastructures Pvt. Ltd., coupled with the fact that the petitioner had claimed various administrative ex....
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....h October 2016 giving detailed explanation as to why no disallowance is required to be made under Section 14A of the Act read with Rule 8D of the I.T. Rules as there was no exempt income earned during the relevant assessment year and the assessee had made investment in long term, non-trade (unquoted investment) in private limited companies being carried forward from earlier years. [13] In view of the above facts and on perusal of the reasons recorded by the respondents, it is apparent that the respondent has failed to assume jurisdiction to issue such notice on the basis of the material which was available on record even during the course of original assessment proceedings and in absence of any fresh tangible material for reopening, the respondents could not have formed any reason to believe that the income has escaped assessment, more particularly, when the impugned notice is issued after four years from the end of the assessment year and after framing assessment under Section 143(3) of the Act, wherein the issue for which the reopening sought to be made is already considered by the Assessing Officer. Therefore, as per proviso to section 147 of the Act, as the petitioner has di....