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TMI Blog2017 (6) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. Assessing Officer was acting under the compulsion of the audit party. As noted, the audit party raised its objections on 16.01.2012. While issuing notice for reopening on 26.03.2012, the Assessing Officer had cited three very reasons. Subsequently on 24.05.2012, he sent a detailed note to the audit party, justifying why the audit objections should be dropped. It is true that in the present case such resistance from the Assessing Officer came after the notice for reopening. Nevertheless, if we see entire sequence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eon) for a consideration of ₹ 4,01,00,000 and claimed Long Term capital loss at ₹ 3,29,91,808/. 3. You have acquired the Capital Asset (Staff colony) for ₹ 11 lakh and the same was treated as a single common asset i.e. colony building and the entire cost thereof was fully depreciated. Now for the purpose of transfer, the land building of the colony was bifurcated assigning Nil value to the Building and treating the entire sale consideration of ₹ 4,01,00,000/towards land. Capital loss on sale of land was computed at ₹ 3,29,91,808/treating the transaction as LONG TERM CAPITAL GAIN. 4. In this connection following observation has been pointed out by this office. (a) The capital asset (Staff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction for any provision for bad and doubtful debt is allowable to you. Thus the deduction of ₹ 1,50,00,000/under section 36(1) (viia) was not correct. You are show caused to why the deduction of ₹ 1,50,00,000/should not disallowed for the year under consideration. 6. Further, as per Auditors Certificate in Form 3 CD filed with the return, against column No.17(1)Provision for payment of gratuity not allowable u/s 40A(7). The auditors have stated that Gratuity provision of ₹ 51,95,424/debited to P L Account payment of ₹ 83,59,388/made to LIC were not allowable. However, while computing taxable income, an amount of ₹ 51,05,424/was only disallowed. The omission to disallow Staff Gratuity contribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent on account of audit objection which he could not ignore. 10. Since this was the sole ground pressed in service by the petitioner and was primarily based on correct factual aspects, we had summoned the original file from the department. Upon perusal of such file, following aspects emerged. I. On 16.01.2012, the audit party raised objections with the original order of assessment of the present petitioner. These audit objections contained the very same three grounds which are mentioned by the Assessing Officer in the reasons recorded. The Assessing Officer has merely summarized and comprised the grounds and incorporated them in the reasons recorded. The notice for reopening was issued on 26.03.2012. Subsequently on 24.05.2012, the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that the Assessing Officer was clearly acting under the dictates of the audit party. Even after issuing the notice, he still maintained an opinion that no income chargeable to tax had escaped assessment. If that be so, he ought to have dropped the assessment proceedings, at least at that stage when the petitioner raised the objections which even without such objections, the Assessing Officer was convinced, were valid. 12. In case of Jagat Jayantilal Parikh v. Deputy Commissioner of IncomeTax reported in [2013] 355 ITR 400 (Guj), Division Bench of this Court had observed as under: Under the circumstances, it clearly emerges from the record that the Assessing Officer was of the opinion that no part of the income of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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