AI Drafter 
TaxTMI 
TaxTMI 
2025 (2) TMI 545
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....Tax Act, 1961 (for short 'the Act') for re-opening of the assessment for Assessment Year 2017-18. 4. The brief case of the facts are as under: 4.1 The petitioner filed return of income for AY 2017-18 declaring total income of Rs. 39,69,64,650/- on 31.10.2017 and thereafter filed revised return of income on 09.02.2019 declaring total income of Rs. 83,33,75,590/-. 4.2 The case of the petitioner was selected for scrutiny and after considering the reply of the petitioner in response to the notice issued under section 142 (1) of the Act; the assessment order under section 143 (a) of the Act was passed on 09.12.2019, except in the return income of Rs. 2,96,81,980/- as per the computation of income submitted by the petitioner. 4.3 The petitioner thereafter was served with the impugned notice dated 27.03.2021 for re-opening of the assessment. The petitioner filed return of income in response to the said impugned notice on 21.04.2021 and requested for reasons recorded for re-opening. 4.4 The respondent submitted the reasons recorded on 19.05.2021 which reads as under: "2. Brief details of information collected/received by the AO: From the Statement of Total Income, i....
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....1 contending that so far as the issue of deduction of Rs. 17,37,80,816/- in respect of lease payment to CISCO, the same was considered during the regular course of assessment and with regard to the issue of claim on depreciation of goodwill of Rs. 11,02,862/- was also part of the details submitted by the assessee and during the course of regular assessment. With regard to the issue on claim of expenditure of Rs. 37,80,000/- and the foreign exchange fluctuation gain of Rs. 6,90,80,060/-, it was contended as under: "4.3 NO ESCAPEMENT OF INCOME CHARGEABLE TO TAX: 4.3.1 The assessee further submits that the condition precedent for the purpose of resorting to reopening proceedings under section 147 of the Act is that there must be "escapement of any income chargeable to tax". In absence of escapement of any income chargeable to tax, it is not open for the Department to reopen the case of an assessee under section 147 of the Act by issuance of statutory notice under section 148 of the Act. 4.3.2 In the present case, your good self has not appreciated the effect of notional foreign exchange gain and loss. The assessee had claimed net foreign exchange loss of Rs.....
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....m the reasons recorded in para 2, 2.1, 2.2 and 2.4 and highlighted that "from the statement of total income, it is seen that ... ... (para 2); it is seen from Note No.25 "Financial Charges" of the Annual Report that ... .. (para 2.1); it is seen from Note No.3 of the Annual Report that the ... ... (para 2.2); and the facts enumerated above have been found out on examination of the case records of the assessee and are self-explanatory ... ... (para 4). 5.2 It was submitted that thus, the respondent Assessing Officer could not have assumed the jurisdiction in absence of any tangible material coming in his possession and accordingly, the impugned notice is liable to be quashed and set aside as it is evident that re-opening is merely based on change of opinion and the same is not permissible in the eyes of law. 5.3 It was submitted that the reasons recorded by the respondent Assessing Officer referring to the amount of Rs. 6,90,80,060/- being unrealized profit & loss from foreign exchange is concerned, at the same time, the petitioner has also not claimed the unrealized loss of foreign exchange of Rs. 6,81,93,099/- by giving effect in the computation of income. 5.4 Learned Sen....
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....re is change of opinion for the reasons recorded. It was submitted that the Assessing Officer in the reasons for re-opening has categorically observed that escapement of income is mainly on three counts viz., (i) repayment of principal amount of loan wrongly claimed as revenue expenditure; (ii) claim with respect to foreign currency transaction and unrealized profit and loss from foreign exchange; and (iii) wrong claim of depreciation on goodwill. It was submitted that while framing the scrutiny assessment under section 143 (3), neither of the three items was examined nor any opinion was found on any of the three items mentioned in the reasons and therefore, the impugned notice cannot be said to be without jurisdiction. 6.1 It was submitted that on perusal of the notice issued under section 142 (1) and from the assessment order passed under section 143 (3), there is no reference to the taxability of income qua three issues as the same were not examined during the scrutiny of the assessment and therefore, it is not open for the petitioner to refer the general question raised in the notice issued issued under section 142 (1) and the reply submitted in re....
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....rd the notices issued during the regular course of assessment for AY 2012-13, 2013- 14 and 2014-15 and assessment orders for earlier years accepting the same as expenditure. 9. Thus, the Assessing Officer ought to have taken into consideration the nature of repetitive nature of transactions in form of the lease rent which is claimed by the assessee from year to year from 2012-13 onwards and no addition was made since then. 10. With regard to the claim of Rs.37,80,000/- on account of the applicable gain / loss on foreign currency transactions, the petitioner has explained in detail in the objections with regard to the nature of claim by making as reproduced hereinabove from pages 71 and 72 of the paper book to the effect that the petitioner had unrealized loss of Rs. 6,81,93,099/- which was added as income and on the other hand, the petitioner has deducted the unrealized gain of Rs. 6,90,80,060/- and also claimed net expenses of Rs. 37,78,154/- in the profit and loss for computation of the book profit and it cannot be disputed that the petitioner has explained that the claim of the assessee for bank charges for raising foreign currency Rs. 46,65,115/- is required to be conside....