AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 329
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.... '(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that reopening of assessment is valid? (TC(A) No.196 of 2012 (2003-04) and TC(A) No.197 of 2012 (2005-06)) (ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that reopening of assessment made under Section 143(3) beyond 4 years on same set of facts would not amount to change of opinion? (TC(A) No.196 of 2012 (2003-04)) (iii) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that reopening of assessment on the basis of retrospective amendment to Section 80HHC by Taxation Amendment Laws 2005 would constitute reason to believe that assessee had failed to disclose fully and truly all material facts? (TC(A) No.196 of 2012 (2003-04)) (iv) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that reopening of assessment to disallow deduction under Section 80IA in the ninth year is valid though deduction under Section 80IA was allowed in the scrutiny assessment from the assessment year 1995-96 onwards? (TC(A) No.196 of 2012 (2003-04)....
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....e assessee have not been found to be false or baseless. In such circumstances, it is best for the Department to leave it to the assessee to take a decision as to what is best for them and for the health of the company. These aspects were rightly taken note of by the CIT(A) by observing that the assessee-company is able to get popularity because of its close association with the game of cricket and it is comparable to any other mode of advertisement establishing hoardings, publicity material and other conventional modes of advertisement. 22.Further, the CIT(A) rightly took note of the decision in Delhi Cloth and General Mills Co. Ltd. (supra) by observing that the power of the Revenue is confined only to examine the purpose of genuineness of the expenditure and not the expediency or the quantum. Nowhere there is any observation either made by the Assessing Officer or the Tribunal that the expenditure was not genuine. In fact, Mr.T.Ravikumar would fairly submit that all other expenditure, which have been claimed by the assessee towards sponsorship, advertisement, have been allowed in its entirety. The Tribunal fell in error in coming to a conclusion that donations were exten....
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....ich was granted from the assessment year 1995-96 onwards in the scrutiny assessments can be disallowed in the 10th year on a totally different interpretation of the provisions of the Act? (TC(A).No.155 of 2011 (AY 2002-03) and TC(A).No.156 of 2011 (AY 2004-05)) 7.Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that reopening of assessment made under Section 143(3) beyond 4 years on same set of facts would not amount to change of opinion? (TC(A) 155 of 2011 (AY2002-03))' 6. We now address the substantial questions relating to re-opening of assessment raised in respect of AYs 2002-03 and 2004-05. In respect of AY 2002-03, a return of income were filed in time and an assessment was completed on 29.12.2006, under scrutiny. In relation to AY 2004-05, the return of income filed within time was taken up for scrutiny and an order passed on 31.03.2005. 7. Prior thereto, the assessing authority had issued notices under Sections 143(2) & questionnaires under Section 142(1) of the Act for both years soliciting various particulars from the assessee. Those particulars included issues that had been identified for re-assessment as per....
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....,634/- and income by way of DEPB credit to the tune of Rs.32,07,04,678/-, but the assessee has not proved that, it had opted to choose either duty drawback or the DEPB during that period. Hence, the above DEPB receipt of Rs.32,07,04,678/-, should be excluded for the purpose of computation of 80HHC deduction being the export incentives as per the proviso to Section 80HHC(3) otherwise means that the deduction u/s. 80HHC can not be further increased on the above receipt by way of DEPB credit. Further, the above view has been confirmed by the Ld.CIT(A)-III vide the order No.730/2006-07/A-III dated 27.03.2007 in the case of M/s.Breaks India Ltd for the AY 2004- 05 on similar disallowance made by the assessing officer. Based on the above facts, it is clear that assessee has not produced the material facts fully and truly before the tax authorities for the purpose of claim of deduction u/s.80 HHC of the Income tax act. Hence, I have the reason to believe that, the income has escaped the assessment by way of excess claim of deduction u/s.80HHC for the current year. 2.Further, it is noticed from the details submitted by the assessee for the AY 20....
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....sment. It is relevant to note that deductions, both under Sections 80HHC as well as 80IA, require Auditor's Certificates as well as prescribed forms to accompany the original returns. In this case, it is admitted that the relevant forms did accompany the returns of income filed by the assessee and that the officer had engaged in detailed discussion with the assessee on both the above issues. 12. Section 147 and the proviso to the extent to which it is relevant, are extracted below: Income escaping assessment. 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessmen....
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....as not produced the material facts fully and truly before the tax authorities for the purpose of claim of deduction u/s.80IB of the Income tax act. 2.As per Taxation Law Amendment 2005, if the export turnover exceeds Rs.10 crores, the benefit of deduction on the DEPB receipts u/s 80 HHC shall be given subject to the fulfilment of conditions laid down as per the above amendment to the section 80HHC(3) of the act. Hence, the assessee has to prove that, it had opted to choose either duty drawback or the DEPB being the duty remission scheme and the rate of the duty drawback was higher than the DEPB during that period. The corresponding proviso is reproduced as under. "Provided also that in the case of an assessee having export turnover exceeding rupees ten crores during the previous year, the profits computed under clause (a) or clause (b) or clause (e) of this sub-section or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiid) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the ass....
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....rned Senior Standing Counsel appearing for the Department has argued that there is thus no statutory embargo to initiate proceedings for reassessment. We agree with him on this count. 17. Explanation 2 to Section 147, sets out specific situations where the assumption of jurisdiction to re-assess has specifically been enabled by way of a deeming fiction. The adumbrated situations are deemed to be cases where income chargeable to tax has escaped assessment. One of such situations is the excess grant of deductions. In the present case, the reason for re-opening is that the grant of deduction under Sections 80HHC and 80IA by the assessing officer was in excess of what the appellant was entitled to. 18. Thus, while the veracity or otherwise of that allegation in regard to excess claim of deduction requires to be tested, as far as the assumption of jurisdiction under Section 147 is concerned, we do not find any cause to intervene. The re-opening has been made within the time limit provided and the invocation of Explanation 2 to justify the assumption of jurisdiction to reassess is also in order, subject of course, to the process of re-assessment on merits. 19. The substantial qu....
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....obacco and tobacco preparations, such as, cigars and cheroots, cigarettes, biris, smoking mixtures for pipes and cigarettes, chewing tobacco and snuff. 3. Cosmetics and toilet preparations. 4. Tooth paste, dental cream, tooth power and soap. 5. Aerated waters in the manufacture of which blended flavouring concentrates in any form are used. [Explanation.-"Blended flavouring concentrates" shall include, and shall be deemed always to have included, synthetic essences in any form.] 6. Confectionery and chocolates. 7. Gramophones, including record players, and gramophone records. 8. [***] 9. [Projectors.] 10. Photographic apparatus and goods. 11-21. [***] 22. Office machines and apparatus such as typewriters, calculating machines, cash registering machines, cheque writing machines, intercom machines and teleprinters. Explanation.- . . . . 23. Steel furniture, whether made partly or wholly of steel. 24. Safes, strong boxes, cash and deed boxes and strong room doors. 25. Latex foam sponge and polyurethane foam. 26. [***] 27. Crown corks, or other ....
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....l'. The argument of the revenue is that entry No.27 relates to all fittings or accessories of cork, rubber, polyethylene or any other material. This interpretation is too wide of acceptance as it would expose all products made of cork, rubber, polyethylene or any other material to the restriction. 32. There is yet another reason why the argument of the revenue does not appeal. Entry No.28 refers to pilfer-proof caps for packaging or other fittings of cork, rubber polyethylene or any other material. If all other fittings of cork, rubber, polyethylene or other material were covered under the ambit of entry No.27, as the revenue would argue, there would have been no necessity to refer to those products again in entry 28. 33. That apart, we do not find that the comma placed after the phrase 'crown corks', makes any difference to the interpretation that the fittings of cork, rubber, polyethylene or other material must relate to crown corks only. This argument is hence rejected and the substantial question of law in this regard is answered in favour of the assessee. 34. The decisions referred to by the assessee, would also support our conclusion as above. 35. We now a....