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TMI Blog2017 (6) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... from ₹ 3,66,749/- to ₹ 1,72,648/- and, in the process, made a further disallowance of ₹ 1,35,899/-. This ground for the reopening of the assessment, therefore, is not available to the Revenue. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 2527 of 2017 - - - Dated:- 12-6-2017 - MR. AKIL KURESHI, AND MR. BIREN VAISHNAV, JJ. For The Petitioner : Mr B S Soparkar, Advocate For The Respondent : Mrs Mauna M Bhatt, Advocate ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This petition is filed by the assessee challenging a notice dated 28.03.2016 issued by the respondent-Assessing Officer seeking to reopen the petitioner's assessment for the assessment year 2011-12. The original assessment was framed after scrutiny. The impugned notice is thus, issued within a period of four years from the end of the relevant year in a case, where the scrutiny assessment was framed. To issue such notice, the Assessing Officer had recorded following reasons: Reasons recorded for initiation of assessment proceedings In this case, the assessee company filed its return of income for A.Y. 2011-12 at Rs. (-) 34,08,157/- on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 3. The reasons recorded show three separate grounds on which, the Assessing Officer desired to reopen the assessment. These grounds are as under: i. The assessee had claimed deduction under section 10B of the Act in respect of its software development unit situated at Pune. According to the Assessing Officer, in terms of section 10B of the Act, the unit had to be registered with the Board appointed by the Central Government under section 14 of the Industries Development and Regulation Act, 1951. The unit of the assessee was not so registered and that therefore, deduction under section 10B was not available. ii. The assessee had paid certain remuneration to its directors without deducting tax at source. Such expenditure therefore, had to be disallowed under section 40(a)(ia) of the Act. iii. The assessee had earned income which was exempt under section 10 of the Act. However, according to the Assessing Officer, matching disallowance for expenditure to earn such exempt income, as provided under section 14A of the Act and Rule 8D of the Income Tax Rules, 1961, was not made. 4. At this stage, we may record that on facts, Revenue was unable to press the second ground sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,05,096 Kasez Unit 4th 56,51,508 Similar claims of deduction have been allowed in all the earlier years. The details of party wise foreign currency sales and receipts are enclosed in a chart format. (Annexure P-1). It will be found that in the Audit Report in from 56G the auditor has given details of unrealized sales bills. We give in the table below the details of subsequent receipts or non receipts of the said outstanding sales bills. We have enclosed herewith in Annexure P-2, the copies of FIRC (Foreign Inward Remittance certificates) issued by Indian Bank in respect of realization of such bills. In the chart enclosed (Annexure P-3). We have given the details of subsequent realization which is within the time of six months (and further extended), from the date of Invoice, as per Reserved Bank of India guidelines. However, we are unable to realize value of following Invoices as a result of which amount of deduction will be reduced by ₹ 10,40,714/- as calculated below: Amount of Total Export Turnover: ₹ 19,45,07,450/- Amount of Export Turnover as Reduced by Unrealize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of ₹ 10,40,714/- out of the claim of deduction made by the assessee under section 10B of the Act. 9. It can thus be seen that the assessee's claim of deduction under section 10B of the Act was part of the original assessment proceedings. Only after being satisfied about the validity of the claim that the same was substantial, accepted by the Assessing Officer. Any attempt on his part to reopen this claim would be based on mere change of opinion. It is well settled that the concept of change of opinion is relevant even after the amendment in the statute w.e.f. 01.04.1989 as held by the Supreme Court in case of Commissioner of Income Tax vs. Kelvinator of India Ltd. reported in 320 ITR 561 . Division Bench of this Court in case of Sarla Rajkumar Varma vs. Assistant Commissioner of Income Tax reported in 231 Taxmann.com 889 has observed as under: 14. It can thus be seen that the claim of deduction under section 80IB(10) of the Act came up for scrutiny minutely by the Assessing Officer in the original assessment proceedings. He disallowed the claim to the extent he was convinced that the same was exaggerated. He allowed only part of the claim. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire claim. This precisely is the situation in the present case. As noted claim under section 80IB(10) of the Act was the sole claim of the petitioner in the return filed. The entire claim was examined at length. To the extent the Assessing Officer thought the same was not allowable, after hearing the petitioner and inviting her response, he disallowed the substantial portion of the claim. It is now therefore, not possible for the Revenue to canvas that yet another element of the claim was not gone into by the Assessing Officer and that therefore, fresh look would be permissible. 10. Similar observations have been made in case of Cliantha Research Limited vs. Dy. Commissioner of Income Tax reported in 35 Taxmann.com 61 . 11. Regarding the second ground of disallowance under section 14A read with Rule 8D of the Rules, the same is possible of a summary disposal. During the original assessment, this very question came up for consideration. Having taken note of the evidence on record, the Assessing Officer enlarged the disallowance voluntarily made by the assesseee from ₹ 3,66,749/- to ₹ 1,72,648/- and, in the process, made a further disallowance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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