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TMI Blog2010 (10) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... d other liabilities as proposed by the BIFR. Failure to pay these liabilities would have exposed the assessee company of getting black listed and losing the face from financial institutions and banks for its future projects. In fact, when the whole situation is looked from this angle, it seems that the assessee company had no choice but to pay the amount. Even the delay for making these payments would have led the assessee company into further trouble in the sense that liabilities of financial institutions and banks would have gone up further. Thus, it is clear that payments were made out of the commercial expediency and as observed by the Hon'ble Supreme Court in the case of in the case of S. A. Builders [ 2006 (12) TMI 82 - SUPREME COURT] that even if there is no necessity to make the payments and such payments are made voluntarily on the grounds of commercial expediency, then such claim has to be allowed. Thus, it become clear that claim has to be allowed even if it is not necessary to make such payments if the payments had been made voluntarily on the grounds of commercial expediency. Further it is not necessary that such business should be that of assessee itself. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndum of association of the company. In the case before us, as pointed out by the ld. counsel of the assessee, the same is authorised by clause-6 of ancillary object. With GPEL assessee is clearly related as a promoter and major shareholder towards diversification of its business. Moreover, the payments have been made under the legal compulsion in terms of Rehabilitation Scheme formulated by BIFR. ld. CIT(A) held that - '' the amount being advance made to Gujarat Prestrop Electricals Ltd. [GPEL] towards the liability of financial institutions, was for business purpose and that the claim of write off of the same was admissible. The learned CIT(A) also erred in allowing write off on account of reduction in the value of equity investments in the said Gujarat Prestrop Electricals Ltd. The CIT (Appeals) ought to have appreciated that the assessee company had no normal business transactions with GPEL''. Thus, we confirm the order of the ld. CIT(A). Provision towards payment of bonus - The proviso to sec.43B gives further concession that if payment in respect of any of the items referred in sec.43B is made in a particular year before the due date of filing of the income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such amounts have to be reduced from the book profits unless it is hit by the proviso to that clause. Admittedly, the profits credited in earlier year have already suffered tax though under normal provisions and, therefore, same is not hit by the proviso. In these circumstances, we are of the view, that assessee has correctly reduced the amount of general reserve which was duly withdrawn and reflected in the profit loss account. Thus, we confirm the order of the ld. CIT(A). In the result revenue s appeal is partly allowed - S/SHRI T.R.SOOD, AM AND N.VIJAYAKUMARAN, JM For the Appellant: Shri S.C.Sonkar, CIT-DR for the Respondent: Shri T.N. Chopra, Advocate O R D E R Per T.R.SOOD, AM: The issues raised in these cross appeals are related to common issues, therefore, these were heard together and are being disposed of by a common order 2. I.T.A.No.429/Coch/06 : In this appeal the revenue has raised the following grounds: 1. The learned Commissioner of Income tax (Appeals) erred in holding that depreciation at ₹ 31,66,617 was allowable proportionately on the building which was partly let out and partly used for business purpose; 2. The Commissioner of Income tax (Appeals) went ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Commissioner of Income tax (Appeals) was not justified in deleting the addition made to book profit u/s.115JB on account of uncertained liability. The learned Commissioner of Income tax (Appeals) ought to have seen that provision for diminution/reduction in the value of investments created in A.Y 2002-03 was reversed in subsequent year, which indicates that the same was not based on any actuarial valuation of liability. 9. The learned Commissioner of Income tax (Appeals) went wrong in his observation that the addition of ₹ 15,59,046/- was adhoc and not provided under statute. The CIT(A) ought to have appreciated that this was an expenditure covered u/s.10[34] read with sec.14A, and would be hit by explanation [ii] of section 115JB[2]. 10. The learned Commissioner of Income tax (Appeals) erred in allowing the claim of deduction for provisions for bonus and encashment of leave in the computation u/s.115JB which was not ascertained till 31-03-2002. 11. The learned Commissioner of Income tax (Appeals) erred in deleting the interest levied u/s.234D on the excess refund granted. 3. Ground No.1: After hearing both the parties, we find that during the assessment proceedings AO n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng tyres to Apollo International Ltd. In that sense, the premises let out to Apollo International Ltd. were being used for business purpose only and therefore, depreciation, repairs etc. of this portion are also to be allowed. 122. On the other hand, the ld. CIT-DR submitted that once income from let out portion was returned and assessed as income from house property, then only deductions against the income from house property would be allowed in respect of let out portion. 123. We have considered the rival submissions carefully. We find force in the submissions of the ld. CIT-DR. Once a particular portion has been let out and income is being returned as well as assessed from let out portion as income from house property, then only deductions allowable under the Head income from house property would be allowed against such income. The Supreme Court in the case of Dr. V.P. Gopinathan, (supra) held that deduction under a particular Head could be allowed only in respect of deductions permitted under that particular Head. We, further, find that the Hon ble Delhi High Court in the case of CIT vs. H.G. Gupta Sons, 149 ITR 253 (Del.) was concerned with the similar issue. In that case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich represented food expenses on various hotels and resorts and, accordingly, this expenditure was disallowed. 9. Before the CIT(A) it was mainly argued that this expenditure was part of the employees salary package and was not in the nature of entertainment expenditure or personal in nature. Ld. CIT(A) agreed with this contention and allowed the same. 10. Before us, it was submitted that this issue is covered by the decision of the Tribunal in I.T.A.No.301/Coch/1991 and further similar arguments were made as in ground No.4 for I.T.A.No.274/Coch/2005. 11. On the other hand, ld. CIT DR strongly relied on the orders of the AO. 12. After considering the rival submissions, we find that identical issue came up in earlier years also before the ITR and it has been adjudicated in I.T.A.No.274/Coch/2005 vide para-104 which is as under- 104. After considering the rival submissions, we find that identical issue came up before the Tribunal and same was adjudicated in favour of the assessee vide para 23 of the order following the earlier order of the Tribunal in I.T.A. 301/Coch/1991. It has been recorded by the Tribunal that the Department has not filed any appeal before the Hon ble Jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.3: After hearing both the parties, we find that during assessment proceedings AO noted that assessee has reduced a sum of ₹ 10,59,119/- being dividend received from UTI Mutual Fund and Bank of India from the book profits u/s.115JB. He further noticed that no amount of expenditure has been reduced from this. On enquiry, it was submitted that no borrowed funds were used for buying these units and, therefore, there was no nexus between the borrowed funds and interest free investments. It was noted by the AO that such funds were being invested from the pool of funds and the same argument was taken by the assessee in the earlier year before the Supreme Court in the case of in the case reported at 255 ITR 273. Further, no separate accounts were being maintained for investments in mutual fund. Since, according to the AO, investment was made from the common pool of fund, he allocated the proportionate amounting to ₹ 15,59,046/-. He disallowed the interest accordingly. 14. On appeal, the ld. CIT[A] by following earlier year order and by observing that this addition was on an adhoc basis, deleted the addition. 15. Before us, ld. CIT DR submitted that this issue is squarely cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above facts and circumstances of the case, we cannot believe that the assessee has not incurred expenditure in relation to the income which does not form part of the total income of the assessee. Hence, after ascertaining the totality of the facts and circumstances, the determination of the amount of expenditure in relation to such income should be 0.5% of such expenditure incurred in relation to the exempted income. Hence, that alone will justify the assessee s claim and to that extent the assessee s claim is partly allowed. For the limited purpose of computing of the expenditure at the above percentage for the purpose of disallowance , we remit this issue back to the file of the Assessing Officer and decide in accordance with the above directions of the Tribunal. Hence this issue is decided partly in favour of the assessee. In the above decision, the Tribunal while holding that Rule 8D was prospective in nature, estimated the expenditure at 0.5% of the income. But, however, it was claimed before us that investment was held on account of business assets. The Hon'ble Kerala High Court in the case of CIT vs. Leena Ramchandran [supra] has held as under: (ii) Deduction u/s.36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted while computing total income as per the return. GPEL was jointly promoted company by the assessee and Gujarat Industrial and Investment Corporation (for short GIIC) for transfer of electric grade paper pheriolic copper clad laminates and glass epoxy copper clad laminates. The assessee had acquired 51,80,000 equity shares of ₹ 10 each in GPEL which worked out to 37.45% of the share capital of GPEL. The assessee had also stood guarantor to this company and had paid a sum of ₹ 32,69,65,146/- to the financial institutions and banks of GPEL towards one time settlement of the dues of GPEL and its capital requirements which was in accordance with the rehabilitation scheme approved by the BIFR/Gujarat High Court. The claim was made u/s.28 of the I.T.Act as, according to the assessee company, it was a loss incurred in the course of carrying on the business. However, AO was of the view that there was no connection between the assessee and GPEL and none of the products of GPEL were used by the assessee company. He was also of the opinion that repayment of the loan cannot be called as revenue expenditure. The loss, if any, suffered by the assessee has no direct and proximate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s year and that the same was not a debt considered for computing the income of the assessee and in any case it was not the money lent in the ordinary course of business and, therefore, same could not be allowed as bad debt u/s.36(1)(vii) r.w.s. 36(2)(i). 21. Perhaps an alternate claim u/s.37 was also made for which AO observed that it was treated as a debt in assessee s books and was written off as bad debt and, therefore, denial u/s.36(1)(vii) did not make the assessee eligible for claiming the same alternatively u/s.37. AO also relied on the decision of the Hon'ble Supreme Court in the case of CIT vs. Birla Bros. (P) Ltd. [77 ITR 751], and observed that by guarantying the loan of GPEL the business of Apollo Tyres [i.e. the assessee] was not benefited at all. AO also relied on the decision of the Calcutta High Court in the case of Roompooria Bros. Pvt. Ltd. vs. CIT [167 ITR 59]. 22. The assessee company had also filed copies of financial statements of GPEL for the year ended 31-3-2001 and 31-3-2002 on which AO commented as under: On going through those statements it is seen that the amount of interest waived by the bank as per the scheme of rehabilitation amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT in the case of Mc Dowel Co. I.T.A.No.373 dated 22-12-1998. The issue, therefore, becomes clear. The assessee is entitled to write off the advance of ₹ 326965146/- made to GPEL and written off as bad debt and also ₹ 46620000/- written off by the assessee on account of reduction in the value of equity investments made in GPEL. The appeal on this point is allowed. 24. Before us, the ld. DR referred to pages 18 to 22 of the assessment order where this claim has been discussed in detail and strongly supported the observations made by the AO. He then referred to the old decision of the House of Lords in the case of Soleman vs. Soleman where the whole concept of joint stock company was discussed and ultimately it was held that every joint stock company is a separate legal entity and, therefore, GPEL is a separate and distinct entity in contrast to the assessee company i.e. Apollo Tyres Ltd. (for short ATL). Basically, the assessee company i.e. ATL was trying to set up a new business through GPEL and it cannot be said that GPEL is a part of the assessee company. However, the assessee as a company did not purchased the business of GPEL because purchasing of a company cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shment of the plant to manufacture 200 tons p.a. copper clad laminates in the State of Gujarat from the Government of India in August, 1989. To realize this dream of putting up of this plant, the assessee company entered into an agreement with Gujarat Industrial Investment Corporation Limited (for short GIIC). He then referred to pages 299 to 308 of the paper book which is copy of the Memorandum of Association of the assessee company and referred to clause III-B(6) which is part of objects incidental or ancillary to the attainment of the main object which reads as under: To amalgamate, enter into partnership or into any arrangements for sharing profits, union of interests, co-operation, joint-adventure, or reciprocal concessions or for limiting competition with any person or company carrying on or engaged in or about to carry on or engage in, any business or transaction which the Company in authorised to carry on or engage in or which can be carried on in conjunction therewith or which is capable of being conducted so as to directly or indirectly benefit the Company. From the above, it is clear that the assessee company had power to amalgamate or enter into partnership or start new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the timely and effective implementation of the project and its efficient working . This agreement was later on modified on 25-3-1993 through which GIIC agreed to contribute further sum of ₹ 30,80,000/- towards share capital. Thus, in short through shareholders agreement the concept of public private sector partnership project was further manifested through which GIIC was to play the role of catalyst as an instrument of the Government of Gujarat in putting large projects in the State of Gujarat whereas the assessee company was entrusted with the operational management of the new project. 29. As per the shareholders agreement, ATL advanced the money aggregating to ₹ 5 crores to GPEL out of which ₹ 2.57 crore was advanced in F.Y 1997-98 and ₹ 2.57 crore was advanced in F.Y 1998- 99. For A.Y 1998-99 AO disallowed the notional interest of ₹ 24.30 lakhs on interest free loan to GPEL and the said disallowance was deleted by the Tribunal in view of the ratio of the Hon'ble Supreme Court decision in the case of Veecumsees vs. CIT [220 ITR 185] as well as the decision in the case of S.A.Builders vs. CIT [288 ITR 1]. However, in the next year i.e. A.Y 1999- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us i.e. A.Y 2002-03. 31. Coming to the arguments, he submitted that this issue is squarely covered by the decision of the Tribunal in I.T.A.No.43/Cochin/2001 vide para-16 wherein the decision of the Madras Bench in the case of Spencer and Co. Ltd. vs. ACIT I.T.A.Nos. 598/Mad/04 704/Mad/04 has been followed. In that case certain bad debts of subsidiary were written off which were not allowed by the authorities below. The Tribunal while adjudicating the issue held that if same were not allowable as bad debts, then the same should be allowed as business loss following the decision of the Hon'ble Supreme Court in the case of S.A.Builders vs. CIT [supra] wherein the Hon'ble Supreme Court had observed that there existed relationship between the assessee and its sister concern and that the amounts were advanced in the course of the business and for the purpose of the business. It was also observed by referring to a Third Member decision in the case of Duncan Agro Industries Ltd., I.T.A.No.2091/Cal/95 wherein it was held that once some grants were given on behalf of the subsidiary of the sister concern and assessee had assured the bankers that it was the policy of the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee company would ordinarily have made out of this business activity. The income of the assessee company was held to be chargeable by observing that because the activity was organized in character and the British Companies were carrying on the business in such a manner that no profits could accrue to them was relevant. c) T. Krishna Menon vs. CIT 35 ITR 48 (S.C). In this case assessee after retirement from the government service was studying and teaching Vedanta philosophy. A question arose whether teaching was a vocation. The Hon'ble Supreme Court held that teaching of Vedanta by the assessee was carrying on of a vocation by him. d) Similar view was taken by the Hon'ble Allahabad High Court in the case of Addl. CIT vs. Ramkripal Tripathi 124 ITR 408, 33. He further submitted that business profits are assessed under the head profits and gains of business or profession . The Legislature has intentionally used two different expressions i.e. profits and gains and same cannot be taken as synonymous. He argued that the word gain would encompass even non pecuniary benefit floating from the conduct of the business activity. In this regard he read out the following observations: a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n given as acquisition, and has no other meaning. Gain is something obtained or acquired, and is not limited to pecuniary gain. Regarding profit , in general, the profit means the price received over the cost of purchasing and handling the goods, it means pecuniary gain, as held in Stratton vs. Cartmell, 42 A.2d 419, 422, 114 Vt. 191. In Oliver vs. Halstead, 86 S.E.2d 858, 859, 196 Vz. 992, the word profit , as ordinarily used, is held to mean, the gain made upon any business or investment, and does not include compensation for labour . He argued that on the basis of the above, it can be easily said that any activity done for profits and gains would amount to business and gain could be in any filed. In the case before us, assessee mainly gained by entering into collaboration with GIIC for starting the project through GPEL by establishing a foothold in the State of Gujarat by setting up one of Asia s largest tyre manufacturing plant at Limda near Baroda. Thus, by entering into this collaboration agreement the assessee has been able to enhance its business and, therefore, there is definitely synergy between this project and the tyre business of the assessee. 34. The ld. counsel of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok a hard economic reality into view and allowed the claim of the assessee in respect of monies lent to the managed company. He particularly read the Head-note which is as under: (ii) that this was a case in which the Court is entitled to pay regard to the economic realities which existed behind the legal facade. The assessee-company, under its memorandum, was entitled to undertake managing agency business. It undertook that business but not directly and wholly but acting in concert with two other parties and through the device of a limited company, viz., VHDA Ltd. There was no reason why the moneys lent by the assessee company to NI Ltd., the managed company, could not be regarded as finances provided for a company in which the assessee was substantially interested. It was not necessary for the assessee company to have undertaken any money lending activity. If the object of advancing of money was to provide finance for a company in which the assessee was substantially interest, the debt must be regarded as directly springing from its business activity and the connection cannot be considered to be too remote for the purpose of the allowance as a trading debt. The test and the appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a prudent business man by paying the money towards finances provided by the financial institutions to GPEL. 36. The ld. counsel while adverting to the issues raised by the ld. CIT DR that Board s resolution was passed on 26-6-2002 therefore liabilities cannot be said to have been incurred in this year, submitted that generally accounts are not closed immediately at the end of the year and it is a recognised accounting practice that even event occurring after the date of balance sheet should also be considered by preparing final annual accounts and that is why liability was recognised in this year. By referring to the objection raised by the AO, he argued that the first objection was that there is no connection between the assessee and GPEL but that is not correct, because the company exists for business purposes and by entering into a joint venture agreement with GIIC for starting GPEL with large object of establishing a foothold in the State of Gujarat, was definitely in the over all business synergy of the assessee company. In fact, starting of GPEL was not with any altruistic motive or fun or sport or pleasure. It was mainly taken up with over all business plans of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts. In that case the Hon'ble Supreme Court had specifically observed that neither the memorandum of association of the company nor managing agency contained any provision whereby guarantying of the loan could be said to be the business of the assessee. This being so there was no legal obligation to pay the amount. Therefore, the proposition laid by the Hon'ble Supreme Court is that unless the guarantor is under a legal obligation to give the guarantee or the guarantee has been given as part of or incidental to business purposes, the guarantor cannot claim the amount which he was forced to pay under the guarantee. Whereas in the case of the assessee, guarantees were given in view of the joint agreement whereby assessee was made responsible for arranging finances and such guaranty was called incidental to the business of project promotion which is authorised by the memorandum of association as envisaged in clause III B(6) of object incidental or ancillary to the attainment of main object of the memorandum of association. In fact, the ratio of the decision of the Hon'ble Supreme Court rather supports the case of the assessee. 37. While concluding he again emphasized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 5.18 crores. An advance of ₹ 5 crores in two transcripts amounting to ₹ 2.43 crores in F.Y 1997-98 and ₹ 2.57 crores in F.Y 1998-99 was also given. Assessee also stood guarantor to the loans granted to GPEL by banks and financial institutions. The operations of the GPEL were unsatisfactory right from its inception and ultimately GPEL was referred to BIFR on 11-8-1997 and later on a Rehabilitation Scheme was proposed which has been confirmed by the Hon'ble Gujarat High Court. As per this Rehabilitation Scheme, copy of which is placed at pages 188 to 202 of the paper book, mainly restructuring of long term liability as well as reduction of share capital was proposed. Certain sacrifices were also required to be made by Government of Gujarat as well as Government of India. As per para-3 of the scheme ATL was accepted as guarantor of the loans to GPEL to make payments of entire principal term loan and 50% of the simple interest to banks and financial institutions the debenture holders were also required to waive 50% of the interest. The Government of Gujarat was required to (i) defer the payment of purchase tax on the basis of interest free deposits, (ii) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risson Co. vs. CIT [supra] was distinguished by observing that in that case money was advanced to a subsidiary company on the winding up and in the present case GPEL was not the subsidiary and it has also not been wound up. It was also noted that resolution for writing off this claim was passed on 26-6-2002 and, therefore, this amount could not be claimed in the present year. AO also placed reliance on the decision of the Hon'ble Supreme Court in the case of CIT vs. Birla Bros (P) Ltd. [supra] to disallow this claim. 42. The ld. CIT[A] has allowed the relief mainly on the basis that it was a legitimate business decision. The joint venture entered into by the assessee company was with the government of Gujarat and it was not an arrangement to siphon off the money and the payments have been made in terms of the settlement approved by BIFR. 43. On the above facts we are required to find out whether assessee s claim is allowable. For this, we need to look at the proper aspect of the whole issue. The assessee is a company engaged in the manufacture and sale of tyres and tubes but at the same time it is authorised by clause IIIB(6) of objects incidental or ancillary to the attainment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme provides for following: i. Financial institutions and banks were required to accept principal amounts of loan only @ 50% of the simple interest outstanding; ii. For this, they were directed to accept the assessee company as guarantor of the loans and ultimately one time payment of the principal and 50% interest was prescribed; iii. Debenture holders were to sacrifice 50% of the interest; iv. Government of Gujarat was required to defer payment of purchase tax on interest free basis and was also required to defer sales tax liability as well as octroi duty and electricity duty; v. Central Government was required to grant exemption u/s.41(1) of the I. T. Act for remission of liability and to give exemption u/s.36(1)(iii) of the I.T.Act for notional interest on promoters contribution. The government was further required to exempt the company from the provisions of sections 100 to 102 of the Companies Act regarding alteration/deduction of share capital; vi. Further it was required to grant exemption from the provisions of sec.81A of the Companies Act and compliance of SEBI guidelines for issue of optional convertible debentures. vii. The government was also required to grant exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in several decisions e.g. Eastern Investments Ltd. vs. CIT (1951) 20 ITR 1 (SC), CIT vs. Chandulal Keshavlal Co. (1960) 38 ITR 601 (SC), etc. The Hon'ble Apex Court has further at placitum-35 while approving the decision of Hon'ble Delhi High Court in the case of CIT vs. Dalmia Cement (B) Ltd. [254 ITR 377] observed as under: We agree with the view taken by the Delhi High Court in CIT vs. Dalmia Cement (Bharat) Ltd. (2002) 174 CTR (Del) 188 : (2002) 254 ITR 377 (Del) that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize its profit. The IT authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own viewpoint but that of a prudent businessman. As already stated abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. However, the CIT(A) found that in respect of irrevocable advance given to a group company USAL, the Assessing Officer has not examined an item of ₹ 90,00,000/- being the corporate guarantee to USAL which was also written off. Further, he found that the Assessing Officer has allowed a sum of ₹ 18,18,325/- being irrecoverable advance for supply of compressors made to K G Khosla compressors Ltd. which was advance given for the purchase of a capital asset but this amount was not advanced during the course of carrying on the business. The alternative contention of the assessee is that the amount of ₹ 90 lakhs written off in the books represents the business deduction covered under section 36(1)(vii) or the residuary section 37(1) of the Act. The ld.Counsel for the assessee contended that the loss arising out of business activity is allowed as deduction under section 28/37 of the Act provided the loss should be incidental to the carrying on of the business and should arise from the carrying on the business. The loss should be a revenue loss and not capital loss. The assessee company had initiated steps to revive group companies like Universal Steel and alloys Ltd. (U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business in the assessment for the year 1958-59. There were receipts by the assessee-company in the course of the liquidation of SSM in the later years. The total amount received came to ₹ 4,85,508.28 spread over the relevant accounting years for the asst. yrs. 1959-60 to 1962-63. The assessee-company relied on the clause in the memorandum of association authorising it to be the guarantor for the loans and contended that the transactions in question sprang out of normal business transactions and hence, the loss was an allowable deduction in the assessment for 1958-59. The Income Tax Officer held that the loss in question did not arise during the course of or incidental to the business of the assessee-company and in his view it was at best a capital loss which did not come within the scope of s. 12B of the 1922 Act. In making the assessments for the years 1959-60 to 1962-63 the Income Tax Officer treated the receipts from the liquidator as income as a protective measure. The Tribunal held that the assessee- company had guaranteed the loan in the course of carrying on its own business and that the loss was clearly admissible as a deduction. But since the assessee-company had re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n pursuance of Rehabilitation Scheme. 49. One more objection was taken by the AO as well as the ld. CIT DR that since Board s resolution was passed on 26-6-2002, therefore, liabilities cannot be claimed in this year. Firstly, we agree with the submissions of the ld. counsel of the assessee that in the case of company accounts are not closed on the last day of business but they are generally finalised much after that and, therefore, assessee company had the right to claim this amount before the accounts were finalised. In any case, this issue came up before the Hon'ble Calcutta High Court in the case of Turner Morrison and Co. Ltd. vs. CIT [supra] and the relevant paragraph relating to this issue is as under: Coming to question Nos. 5 and 6, with regard to the disallowance of ₹ 15,40,264, the AO and the CIT(A) have disallowed this deduction on the ground that no material was placed before them by the assessee to establish that the amounts were irrecoverable. The Tribunal, on the other hand, has dealt with this question from two angles-firstly, that the deduction was disallowable since the assessee had shown this amount after the close of the accounting year as on 13th May, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10(2) (xi). It may be mentioned that the case of the assessee was confined to that provision and no reliance was placed on any other provision under which such an allowance could be claimed. There was no privity of contract or any legal relationship between the assessee provision or selling agent. Neither under custom nor under any statutory provision or any contractual obligation was the assessee was the assessee bound to guarantee the loan advanced by the bank to the selling agent. It is difficult to see how it was in the interest of the assessee's business that the guarantee was given. There was even no material to establish that the managedcompany was under any legal obligation to finance the selling agent or to guarantee any loans advanced to the selling agent by a third party. It is incomprehensible in what manner the guaranteeing of the loan advanced to the selling agent indirectly facilitated the carrying on of the assessee's business. It is equally difficult to appreciate the observations of the High Court that it was in the larger interest of the assessee's business that the guarantee was given. In our opinion the view of the Appellate Tribunal was base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this sum. 52. Ld. CIT(A) adjudicated the issue vide para-14 which is as under: I have gone through the details. It is fact that it could have been claimed in the earlier year. But it is also a fact that sec.43B imposes no such restriction on the assessee. What section 43B provides is certain payments should be allowed only on actual payment basis. Since the actual payment has been made during the previous year relevant for the current year under appeal, there is no bar in the assessee making the claim in this year. The AO s argument that it has been done to avoid tax can be answered by taking recourse to the Gauhati High Court decision in 256 ITR 626, 222 ITR 83 and the famous McDowel decision 158 ITR 148. All these decisions held that a legitimate tax planning is allowed and cannot be disallowed unless it is established that it has been done with an ulterior motive. The overriding fact remains that there is no restrictive provisions in sec.43B that the deduction cannot be allowed in the year of payment if it has been made before the due date for filing the return for the previous year. I am, therefore, inclined to fully agree with the appellant that the claim of bonus payment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee on or before the due date applicable in his case for furnishing the return of income under subsection (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. Clause (c) makes reference to clause (ii) of sub-sec.(1) of sec.36 which refers to any sum paid to an employee as bonus or commission. Therefore, payment on account of bonus is also controlled by sec.43B. The plain reading of the provision clearly shows that deduction on account of any of the items mentioned in sec.43B would not be allowed unless and untill the payment has been made and the same is allowable in the year in which payment has been made irrespective of the assessment year in which liability for the same has been incurred and recognised by the assessee by the method of accounting adopted by him. Therefore, it is clear that items referred to in sec.43B can be allowed only if payment has been made and the same are allowable in which payment has been made. Since assessee has been making payment on account of bonus on the occasion of Onam which is a most im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,200/- which has been worked out as under: a) HO overheads under Misc Expenses [net of disallowance ] as per accounts ₹ 16,00,00,000 b) Directors remuneration, allowances, commissions, sitting fee etc. as per 44AB report ₹ 3,54,86,500 c) Salary of office staff including company secretary [estimated] ₹ 1,00,00,000 d) Depreciation of corporate office building as givenby the assessee [net disallowance] in Para 6(ii) ₹ 2,02,02,800 e) Depreciation computed on the basis of assessment for the Asst Year 2001-02 on the following assets used at HO and its branches i. Motor Cars ₹ 1,85,29,000 ii. Computers ₹ 3,00,85,000 iii. Other office building furniture ₹ 1,53,80,000 iv. Other office assets excluding marketing Assets Gross amount ₹ 9.76 Crore Estimated at 50% ₹ 4,88,00,000 Total ₹ 33,84,83,300 Expenses attributable to Baroda Unit in the ratio of production being 45% as adopted by the assessee ₹ 15,23,17,500 Add: 1) Finance charges relating to Baroda ₹ 22,38,00,000 Unit as allocated by the assessee [41.34%] 2) Interest on term deposit received which was netted off against finance charges and assessed as income from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of the power generated. Since the power is being consumed by Bias unit at Baroda for manufacturing tyres and there is no occasion for allocating head office expenses like rent, taxes etc. This position has been admitted by the AO in the re-assessment order for A.Y 2002-03 vide order dated 12-12-2008 wherein it was observed that Thus even though this power generation unit can work even when the Baroda unit is not working and in that re-assessment head office expenses have not been allocated and, therefore, keeping the principle of consistency factual effect in earlier year s order should be adopted in this year also. In this regard he also referred to the decision of the Hon'ble Madhya Pradesh High Court in the case of Prakash Chandra Basant Kumar 276 ITR 664 and the decision of Hon'ble AAR in the case of National Fertilizer Ltd. 142 Taxman 5. 62. He argued that for computing the profits of an undertaking eligible for deduction u/s.80IA, only the profit of the undertaking has to be computed. He argued that head office expenses would mainly be in relation to the marketing division. This will have no relevance to the production of power. Therefore, such expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial, their sanctions from various government authorities for putting up the plant as well as procurement of technology etc. and these expenses would have no relevance with the power plant. However, at the same time there are certain common expenses like remuneration paid to the directors, company secretary, office staff, personnel department etc., can definitely be of the common nature. It has already been observed that no allocation of interest has been made though neither AO has given any finding of fact whether power generation unit was acquired from assessee s own funds or it was financed from the borrowings. Considering the over all aspects of the case, we are of the view that the AO has allocated the sum of ₹ 15,23,17,500/- being 45% of the total expenses towards Baroda unit. As observed by us, that the major expenditure on account of marketing and procurement of material etc., may not have any relevance with the power generation unit and, therefore, allocation of these expenses on the basis of the turnover may not be appropriate. Considering the over all circumstances, we are of the view that if a sum of ₹ 10 lakhs is allocated out of the expenses of this power u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 32.70. No part of the general reserve created by debiting the profit loss account for those years which was utilized in this year for meeting the liability arising from the write off of advances to GPEL could have been reduced from the profits by virtue of proviso to the said Explanation. He also referred to the decision of the Hon ble Supreme Court in the case reported in 255 ITR 273 wherein it was held that in the context of computation of book profits u/s.115J no adjustment other than provided in the statute could be made to the book profits since provisions of sections 115JA and 115JB are of similar nature. Accordingly, he rejected the claim of reduction of the sum of ₹ 32,69,65,165/- from the book profits. 66. On appeal, ld. CIT(A) allowed the claim vide para-18 of his order and the relevant portion is as under: 18 On going through these pages, however, I find that the stress applied by the AO is on allowability of this expenditure as a genuine business expenditure which has already been discussed earlier. The AO has not gone into the details as to how an amount transferred from reserves created out of the profits of earlier years can be treated as book profit for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO because same was not considered while computing the book profits for A.Yrs. 1999-2000 to 2000-01 because in those years assessee suffered tax under the normal provisions. He then referred to the provisions of sec.115JB(2) and pointed out that every assessee is required to prepare the accounts in accordance with the provisions of Parts II and III of schedule VI of the Companies Act, 1956. The accounts of the company have been prepared in accordance with sec.211 of the Companies Act and as per the requirements of Schedule VI in Parts II and III the amount of ₹ 32.69 crores has been duly credited from general reserve but before that there is a write off of the sum of ₹ 32.69 crores and that is why the same has become nil, but the same is still allowed to be reduced in view of clause (i) of Explanation 1 to sec.115JB(2). He submitted that details regarding the reserve being created out of the profits were submitted before the AO and that explanation has been rejected merely on the basis that in those years the company suffered tax under normal provisions and not under the provisions of sections 115JA and 115JB. He argued that the basic purpose of enactment of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Loss Account as the Company is not hopeful of their recovery and an equivalent amount has been transferred from General Reserve. The above clearly shows that a sum of ₹ 32.70 crores was written off on account of payment as guarantees etc. with respect to GPEL which we have already discussed in detail while adjudication ground No.4. This amount was to be withdrawn from the general reserve of the equivalent amount. Therefore, it cannot be said that this withdrawal is not part of the profit loss account. The withdrawal is very much part of the profit loss account and has been specifically met for write off of GPEL account. Clause (i) to Explanation 1 to sec.115JB reads as under: Sec.115JB: Explanation [1].- For the purposes of this section, book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by- a) b) c) d) e) f) g) h) i) .. if any amount referred to in clauses (a) to (i) is debited to the profit and loss account, and as reduced by, (i) the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a debit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn from reserve under clause (i) of Explanation 1 to sec.115JB. 72. Interestingly, AO and ld. CIT DR as well as the Ld.counsel of the assessee have all relied on the decision of the Hon ble Supreme Court in the case of Apollo Tyres Ltd. Vs. CIT [supra]. Therefore, we deem it fit to discuss that decision because it cannot support both sides. In that case the issue is regarding computation of book profits arising in the following manner: The Assessing Officer while computing the income under s. 115J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to section 115j. The AO does not have the jurisdiction to go behind the net profit shown in the profit loss account except to the extent provided in the Explanation. The use of the words in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act in sec.115J was made for the limited purpose of empowering the Assessing Officer to rely upon the authen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73,244/- to profit loss account under the sub-head provision for diminution/reduction in the value of investments under the head manufacturing and other expenses as per schedule-9. This was added back while computing the total income under the normal provisions of the Act. However, it was not added to the net profit while computing the book profits u/s.115JB. On enquiry it was submitted that this sum could not be disallowed under any items of (a) to (f) mentioned in Explanation to sec.115JB. It was further submitted that diminution in the investment could not be a provision made for meeting liabilities and the provision was towards reduction of the value of investment. AO did not accept this argument and by following the decision of the Hon'ble Madras High Court in the case of DCIT vs. Beardsell Ltd. 162 CTR 467, wherein it was observed that provision for doubtful debts could be considered as an amount towards unascertained liability. He added this sum to the book profits computed u/s.115JB. 74. On appeal, ld. CIT[A] decided this issue vide para-20 which is as under: 20. The next ground relate to the AO adding back provision made or deduction in respect of value of investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which book profit given by the AO at the starting of para- 3 is as under: The computation of the book profit u/s.115JB as per the revised return was in the following manner: Net profit as per P L account ₹ 36,80,96,430 Add: Provision for tax ₹ 17,94,62,418 Rs.54,75,58,848 Less: Dividend income u/s.10(33) 10,59,119 Amount withdrawn from reserve 32,69,65,146 Amount withdrawn from fixed Asset revaluation Reserve 87,09,140 Amount of profits eligible for Deduction u/s.80HHC 3,33,459 ₹ 33,70,66,864 Book profit ₹ 21,04,91,984 From the above, it is clear that there is no figure of ₹ 1,24,73,244/-. Therefore, it is not clear as to how the AO has considered this figure as provision. Since the order of the ld. CIT[A] is also not clear on this fact, therefore, in the interests of justice, we set aside the order of the CIT[A] and remit the matter back to the file of the AO with a direction to verify whether it is a case of actual write off or provision and then decide the issue in accordance with law. Accordingly, this ground is allowed for statistical purposes. 78. Ground No.9: This issue is identical to the issue decided by us vide para-17 while ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame cannot be said to be an unascertained liability. In this regard he referred to the decision of the Hon'ble Supreme Court in the case of Bharat Earth Movers vs. CIT 245 ITR 428. 83. We have considered the rival submissions carefully. We are unable to agree with the submissions of the ld. DR. Normally bonus will be calculated on the basis of entitlement of each of employee. Similarly, once leave encashment and gratuity has been ascertained on the basis of actuarial valuation, then it cannot be said that these are unascertained liabilities. The Hon'ble Supreme Court in the case of Bharat Earth Movers vs. CIT [supra] has held as under: Held , reversing the decision of the High Court, that the provision made by the assessee company for meeting the liability incurred by it under the leave encashment scheme proportionate with the entitlement earned by employees of the company, inclusive of the officers and the staff, subject to the ceiling on accumulation as applicable on the relevant date, was entitled to deduction out of the gross receipts for the accounting year during which the provision is made of the liability. The liability is not a contingent liability. However, we fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e s appeal wherein we have allowed the claim for payment of bonus vide paras 55 to 57. In view of that decision, the cross objection has become infructuous. Therefore, the same is dismissed accordingly. 88. In the result, cross objection is dismissed as infructuous. 89. I.T.A.No.377/Coch/2006 : In this appeal, revenue has raised the following grounds: 1. The order of the Commissioner of Income tax (Appeals)-II, Kochi in Appeal No.24, 25, 26 27//R-I/CIT-II/08-09 dated 30- 03-2009 is opposed to law, weight of evidence, facts and circumstances of the case. 2. The learned Commissioner of Income tax (Appeals) erred in holding that DG Power Generation Units I II constituted an undertaking in terms of sub-section 4(iv) of Section 80IA of the Income Tax Act. He ought to have held that no undertaking eligible for deduction under section 80IA was in existence. 90. As observed while adjudicating I.T.A.No.298/Coch/2009, the assessment was reopened for reconsideration whether assessee is entitled to deduction u/s.80IA for the power generation units. After examining the facts deduction was denied mainly on the basis that no separate undertaking existed and the power generated from such power uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying on a particular business to set up a new industrial undertaking on account of which exemption of tax u/s. 15C may be claimed. It has been clearly observed that even if the commodities produced by the new units were consumed by the old units, even then deduction under section 15C of the old Act were allowable. Therefore, in view of the above observation, the assessee s DG units cannot be called reconstruction of the old unit and they are definitely new units. 53. The second aspect which has been emphasized by the Revenue is that there is no sale of power to any outsider. In this regard, we would like to refer to the Board s Circular which was issued to Indian Merchants Chambers which is as under:- MOST IMMEDIATE BY SPEED POST F.No. 178/28/2001-I.T.A.1 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, the 3rd October, 2001 To, The Secretary-General, Indian Merchant s Chamber, LNM IMV Building, P.B. No. 11211, Churchgate, Mumbai-400 020. Subject: Section 80IAof the Income-tax Act, 1961- industrial undertakings engaged in the business of generation of captive power. Sir, I am directed to refer to your letter No. 362 dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and loss a/c. sd/- Under Secretary to the Govt. Of India 54. The above very clearly shows particularly para 3 that even in the case of captive power consumption as long as it is a separate unit, deduction has to be allowed. In fact this principle was laid down in the case of Textile Machinery Corporation Ltd. vs. CIT (supra) by the Hon ble Supreme Court itself long back. In any case, an identical issue regarding deduction under section 80IA in respect of four power units wherein power was used in the assessee s own units for manufacturing of paper, came up for consideration of the Mumbai Bench of the Tribunal in the case of West Coast Paper Mills Ltd. vs. ACIT (supra). In that case, it was held by para-6 as under:- We have carefully considered the rival submissions and have gone through the records, including the voluminous paper book filed by the assessee. The assessee, although engaged in the manufacture and sale of paper and paper boards, multi-layer boards, etc., was also into the business of power generation right from the assessment year 1996-97. The findings in the impugned order are clearly unassailable. The assessee has from time to time right from the assessment year 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal and the Apex Court has dismissed the appeal of the revenue by taking support from its own decision in Textile Machinery Corporation Ltd. s case (supra) and CIT vs. Indian Aluminium Co.Ltd. (1977) 108 ITR 367 (SC). Therefore, the stand of the Assessing Officer cannot be accepted. Again the Calcutta High Court was faced with the same set of facts in the case of Hindusthan Motors Ltd. (supra). The assessee in that case was engaged in the manufacture of motor cars. It established certain ancillary units. The Assessing Officer repeated his findings on the same line as he did in the case of Orient Paper Mills Ltd. (supra) and denied the relief u/s. 80E of the 1961 Act. The Calcutta High Court held that assessee is entitled to such relief irrespective of whether the ancillaries manufactured were sold by the assessee to outsiders or were used by it for its own manufacture of cars. Similarly, the Bombay High Court in Sahney Steel and Press Work Ltd. s case (supra), the Assessing Officer denied a similar claim u/s. 80J of the Act on the ground that the new unit was manufacturing articles to be usedas raw material for the existing business of the assessee. The Bombay High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the ld. CIT(A) and confirm the same. Following above decision, we confirm the order of the ld. CIT(A). 93. In the result, revenue s appeal in I.T.A.No.377/Coch/2006 is dismissed. 94. I.T.A.No.298/Coch/2009: In this appeal the assessee has raised the following grounds: 1. That the Learned Commissioner of Income Tax (Appeals) erred in holding that the reassessment order passed by the assessing officer u/s.143[3] r.w.s. 147 of IT Act is valid and in order. 2. That the Learned Commissioner of Income Tax (Appeals) erred in holding that the reassessment order passed by the assessing officer was not based on change of opinion on same set of facts already existing on record. 3. That the Learned Commissioner of Income Tax (Appeals) erred in concluding that the Hon ble Supreme Court in the case of GKN Driveshafts [India] Ltd Vs ITO [2003] 259 ITR 19 [S.C] has not held that the notice u/s. 147/148 or assessment order would be bad in law if objections filedl by the assess are not disposed off by the assessing officer. Out of the above grounds, ground No.3 was not pressed and, therefore, is dismissed as not pressed. 95. After hearing both the parties we find that the assessee filed return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking is eligible for deduction from A.Y. 2000-01 onwards under sub section (1) subject to the provision of sub section (3) and (4) of section 80-IA. It is found that all the conditions prescribed are complied with and as such the deduction is admissible. The method for computing the profit is also found to be correct. Subject to the adjustments to be made as discussed in the following sub-paras, profit of this undertaking computed as per return is allowed as deduction. Even though the deduction is for the first year, this is the second year of operation of this Unit. In regard to the Limda Bias Plant at Baroda which was started during the previous year relevant to assessment year 1992- 93, a sum of ₹ 10,31,65,896/- has been claimed as deduction u/s. 80IB (old provision of 80IA. For the purpose of computing the above deduction, the profits of the eligible business was arrived at R. 34,38,86,321/-. In arriving at the above profit, the consolidated profit as per P L account of ₹ 94.07 crores (before IT provision) was first allocated among the various units . 29. Thus, from the above it is clear that deduction under section 80IA was allowed for DG Power Unit in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless and until there is failure on the part of the assessee to disclose any material fact relevant to the assessment. As we have observed above, the material facts were already disclosed and the assessment has been reopened merely on the basis of Annual Report and Cost audit Report wherein it was stated that this new DG Power Unit was merely installed as an energy conservation measure and the material was already there with the authorities for the earlier years and despite of that, deduction was allowed for the assessment year 1999-2000 itself which is clear from para 13 of the assessment order quoted above. Even during this year, the assessee has filed all the necessary particulars before the AO. 32. We find that in the case of Gemini Leather Stores vs. I.T.O. (supra) the assessee did not disclose facts relating to the transaction evidenced by certain drafts. Further, the officer himself discovered the facts relevant thereto but by oversight did not bring the amounts represented by the drafts to tax as income of the assessee. Subsequently, notice for the reopening of the assessment was issued and when this matter traveled to the Hon ble Supreme Court, it was held as under:- Hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of income of the petitioner from manning and management contracts was never an issue directly or indirectly involved in the case of Boudier Christian. Moreover, the Tribunal in the appeal relating to the assessment of the petitioner own case had considered the decision of the Tribunal in Boudier Christian s case. It is settled law that an appeal is a continuation of the original proceedings and hence when the Tribunal in the appeal relating to the petitioner had considered the decision of the Tribunal in Boudier Christian s case the notice u/s. 147/148 would obviously be on the basis of a mere change of opinion by the income tax authorities, which would not be valid. Even if it were assumed that the law prior to the insertion of the new section 147 would apply, it would make no difference since even under the original 147 notice for reassessment could not be given on a mere change of opinion. Hence, the notice u/s. 147/148 was illegal . 35. This decision of the Hon ble High Court was confirmed by the Hon ble Supreme Court in the case of CIT vs. Foramer France, 264 ITR 566 (SC). 36. The ld. CIT(A) has mainly relied on the decision of the Hon ble Gujarat High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., 256 ITR 1. Before discussing its decision, the Hon ble Delhi High Court has extracted the following observations of Hon ble Supreme Court in the case of Calcutta Discount Co. Ltd., 41 ITR 191(SC) which is as under:- It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else far less the assessee to tell the assessing authority what inferences, whether of facts or law, should be drawn from given fact , it will be meaningless to demand that the assessee must disclose what inferences whether of facts or law he would draw from the primary facts. The scheme of the law clearly is that where the Income-tax Officer has reason to believe that an underassessment has resulted from non-disclosure he shall have jurisdiction to start proceedings for reassessment within a period of eight years; and where he has reason to believe that an underassessment has resulted from other causes he shall have jurisdiction to start proceedings for reassessment within four years. Both the conditions, (i) the Income-tax Officer having reason to believe that there has been understatement and (ii) his having reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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