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TMI Blog2014 (11) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... has adjusted the loss with Long Term Capital Gain from sale of land and held that it was not allowable - It was clearly evident that AO was conscious of the administrative expenses claimed by the assessee - It also cannot be said that assessee’s claim of administrative expenses was to be disallowed at the very first glance as the assessee has also shown income from operation – relying upon CIT vs Ganga Properties Ltd. [1989 (5) TMI 10 - CALCUTTA High Court] – assessee rightly contended that there was change of opinion and in this view of the matter reopening is not sustainable – reference is also made to CIT vs Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] - there was change of opinion and the reopening is not valid – ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act on 06.05.2008. Subsequently the case was reopened on the basis of the following reasons recorded :- In the instant case, assessment for the A.Y.2006-07 was completed u/s 143(3) of the Act on 06.05.2008 computing total income at ₹ 12,72,358/-. Subsequently on going through the assessment record of the assessee, it was noticed that during the previous year the assessee had no business activity like purchase or sale of stock. The assessee had only income from capital gain arisen on sale of properties and receipt of interest. Expenditure like Brokerage etc incidental to sale of capital assets had been allowed as deduction while computing capital gain. Thus computation of loss from business by allowing deductions of administra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Audit Fees 4500 b) Bank Charges 12469 c) Books Periodicals 521 d) Brokerage Commission 11340 e) Consultancy Charges 4408 f) Car running Exp. 122301 g) Conveyance Expenses 633 h) Courier Charges 1750 i) Directors Remuneration 240000 j) Subscription 10667 k) Electricity Charges 45895 l) General Expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not find place in the above details thus it is a matter on record that such expenditure has not been claimed twice once against business income secondly against income from capital gain. It has been only claimed from income from capital gain. Further I would like to state that in tax computation of Asst.Year 2006-07 Brokerage Commission expenses was also added back in income from Business Profession. The Detail explanations of administrative expenses is attached as per Annexure-I. 4) From the totality of the discussion made above. It is clear that administrative expenditure to the tune of ₹ 1311261 claimed against business income is allowable expenditure which again after adjustment of income of ₹ 38902/- (income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of the expenditure should be restricted to 50% of the claim of the assessee. Against the above order the assessee is in appeal before us. 4. We have heard both the counsel and perused the records. At the outset the ld. Counsel of the assessee submitted that the reopening in this case is bad in as much as there is change of opinion by the AO which is not permitted. The ld. Counsel of the assessee further submitted that there is no live link in the reason recorded for reopening and any tangible material found. The ld. Counsel further submitted that on merits also the issue is in favour of the assessee in view of the Hon ble Calcutta High Court in the case of CIT vs Ganga Properties Ltd. 199 ITR 94 (Cal.). The ld. DR, on the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med in administrative expenses was not to be disallowed apparently. The Hon ble Calcutta High Court decision in the case of CIT vs Ganga Properties Ltd. 199 ITR 94 also supports the case of the assessee. The allowance of 50% of the administrative expenditure by the ld. CIT(A) on merits is also a point that the expenditure was not apparently disallowable. Hence after due examination AO has formed an opinion that no further disallowance out of administrative expenses is required. In these circumstances we agree with the submissions of the ld. Counsel of the assessee that there was change of opinion and in this view of the matter reopening is not sustainable. In this regard we may refer to the decision of the Hon ble Apex Court in the case CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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