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TMI Blog2015 (6) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... A, A.O worked out the disallowance u/s. 14A at ₹ 1.43 crores. Thus it can be seen that the A.O in the course of original proceedings and on the basis of submissions made by the Assessee had formed an opinion about the disallowance to be made u/s. 14A and had accordingly made the disallowance and in such a situation the reopening on account of disallowance u/s. 14A would be in our view a case of change of opinion. With respect to the addition of FBT to book profit, we find that CBDT in Circular No. 8/05 dated 29.08.2005 has opined that FBT is allowable deduction in computation of book profit u/s. 115JB and in such a situation in the present case, it cannot be said that the assessee’s action in not adding the FBT to book profit has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee filed revised return of income on 30.10.2007. The assessment was initially framed under section 143(3) vide order dated 26.12.2008 and the total income was determined at ₹ 202,70,19,600/- and the book profit of ₹ 423,99,08,469/-. Subsequently, the assessment were reopened by issuing notice u/s. 148 on 12.03.2010 and thereafter the assessment was framed u/s. 143(3) r.w.s. 147 vide order dated 29.11.2010 and the total income was determined at ₹ 432,03,06,066/- and the book profit at ₹ 395,23,91,496/- Aggrieved by the order of A.O., Assessee carried the matter before CIT(A) who vide order dated 01.07.2011 granted partial relief to the Assessee. Aggrieved by the aforesaid order of CIT(A) Assessee is now in appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e confirmed by CIT(A) be deleted. 5. Ground no. 1 2 are in connection with challenging the reopening of assessment. 6. Before us, ld. A.R. submitted that the original assessment proceedings u/s. 143(3) concluded vide order dated 26.12.2008 and thereafter notice u/s. 148 was issued on 12.03.2010 and the reason for re-opening the assessment were two, namely disallowance u/s. 14A and addition of Fringe Benefit Tax (FBT) to book profits computed u/s. 115JB of the Act. With respect to the disallowance u/s. 14A ld. A.R. submitted that the details of exempt income and source of funds invested in securities from which the exempt income were furnished to the A.O during the course of original assessment proceedings and at that time Assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns that FBT is allowable as deduction while computing book profit and further the circular issued by CBDT are binding on the Assessing Officer. He further submitted that in view of the aforesaid Circular of CBDT, there cannot be any reason by the A.O to believe that income has escaped assessment and therefore re-opening is bad in law on both the counts and therefore submitted that the re-opening u/s. 147 be quashed because it is on account of change of opinion and further there is no escapement of income. On the other hand ld. D.R. relied on the order of A.O and CIT(A). 7. We have heard the rival submissions and perused the material on record. It is an undisputed fact that the original assessment was framed u/s. 143(3) vide order dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . With respect to the disallowance u/s. 14A we find that A.O at para 5 of the original assessment order passed on 26.12.2008 after considering the submissions of the Assessee had come to the conclusion that as against nil expenses said to have been incurred by Assessee and therefore no disallowance u/s. 14A, A.O worked out the disallowance u/s. 14A at ₹ 1.43 crores. Thus it can be seen that the A.O in the course of original proceedings and on the basis of submissions made by the Assessee had formed an opinion about the disallowance to be made u/s. 14A and had accordingly made the disallowance and in such a situation the reopening on account of disallowance u/s. 14A would be in our view a case of change of opinion. With respect to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act despite the fact that: (i) There was no tangible material other than that already on record at time of original assessment (ii) Reopening is based on mere change of opinion (iii) The issue of disallowance under Section 14A of the Act was subject matter of appeal before ITAT in original proceedings 3. The learned CIT(A) has erred in confirming the disallowance of interest expenditure u/s 14A despite the fact that the appellant had sufficient own funds and that the AO had not established nexus between investment and borrowed funds. It is submitted that it be so held now. 4. The learned CIT(A) has erred in upholding the disallowance of ₹ 50 Lacs on account of administrative expenses relatable to exempt income whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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