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TMI Blog2019 (8) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... crores as Book Profits under Section 115JB of the Act. In its return the Petitioner has also claimed a deduction of Rs. 47.04 crores on account of amortization of brand value, while computing Book Profits at Rs. 670.82 crores under Section 115JB of the Act. (ii) The Assessing Officer took up the Petitioner's return relating to Assessment Year 2014-15 for scrutiny assessment. On examination of the return of income, the Assessing Officer issued a notice dated 25 September 2017 under Section 142(1) of the Act to the Petitioner. The above notice at Serial No.5 thereof inter alia called for explanation as under :- 5. You have reduced from Book Profits under Section 115JB an amount of Rs. 47,04,58,042/- (as per revised return), being "Book depreciation on intangibles (Fiancee & Haircode)". In preceding AY 2013-14 also, exactly the same amount of Rs. 47,04,58,042/- was so reduced from book profits, which amount was added back to book profits for detailed reasons given in said assessment order. Pleas show cause as to why the said amount should not be added to your Book Profits under Section 115JB on similar line as made in AY 2013-14. (iii) The Petitioner responded to the above notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see company had claimed deduction of Rs. 47,04,58,042/- from the book profit on the ground that after revaluation of the assets of certain brands having the net book value of Rs. 473 Cr. were written off and charged to Capital redemption reserve and securities premium during A.Y. 2007-08. The amount written off pertains to brand Manjal and Nihar acquired in A.Y. 2006-07 and Fiancee and Haircode acquired in A.Y. 2007-08. There is no provision in section 115JB for granting deduction for the amortization not charged in the profit and loss account on a notional basis. The department has consistently denied the deduction to the book profit claimed by the assessee from A.Y. 2010-11 onwards. However, during the assessment proceedings for the A.Y. 2014-15, the notional amortization amount of Rs. 47,04,58,042/- was remains to be added back by the assessing officer. This has resulted into under assessment of Rs. 47,04,58,048/and income chargeable to tax of equal amount has escaped assessment within the meaning of clause (c) explanation 2 of section 147 of the income Tax Act, 1961. 3) In view of the above, I have reason to believe that income amounting to Rs. 47,04,58,042/- chargeable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra, Mr. Walve, learned Counsel for the Respondents in support of the impugned notice submits : (a) That the impugned notice has been issued within a period of four years from the end of the relevant Assessment Year, therefore mere disclosure of all material facts truly and fully will not oust the jurisdiction of the Assessing Officer to issue a reopening notice; and (b) There is no change of opinion, for the reason that the Assessing Officer while passing the Assessment order dated 30 January 2018 under Section 143(3) of the Act had not formed any opinion on the issue. The opinion, if any, should find mention in the order by way of adjudication. Thus reopening notice is not on account of opinion to one formed in the assessment order dated 30 January 2018 under Section 143(3) of the Act. Thus the Petition be dismissed. 6. We have considered the rival submissions. It is a settled position in law that the power to reopen an assessment within a period of four years from the end of the relevant assessment year, even when the assessment has been made under Section 143(3) of the Act, is not curtailed by the proviso to Section 147 of the Act. Therefore, even where an assessee has dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponded to by the Petitioner in great detail by its letters dated 10 October 2017 and 21 December 2017. It justified its claim for deductions by placing reliance upon the decisions of the Courts. In support of its contention that they are entitled to deduction of the current years depreciation from the net profit to arrive at the book profits under Section 115JB of the Act. It was also explained that under subsection 6 of Section 211 of the Companies Act, reference to a balance sheet or profit and loss account would also include any notes thereto or documents annexed thereto. Thus the notes to the account should be taken into account to determine the net profits for working out the book profits in terms of Section 115JB of the Act. The Assessing Officer thereafter proceeded to pass an assessment order dated 30 January 2018 under Section 143(3) of the Act and did not make the proposed dis-allowance. 9. It is made clear that for the purpose of this petition, we are not called upon to and therefore not examining the correctness or otherwise of the disallowance of depreciation to arrive at book profits. Our examination is limited only to jurisdiction of the Assessing Officer to reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioner for claiming deduction under Section 80IA/IB of the Act. This is a further indication of the fact that the Assessing Officer had during the regular assessment proceedings for Assessment Year 2002-03 sought information in respect of the allocation of expenses and the explanation offered by the Petitioner was found to be satisfactory. This is evident from query dated 27th December, 2004 and the Petitioner's response to the same on 25th January, 2005 explaining the manner of distribution of common expenses for delaying the process of claiming deduction under Section 80IA/IB of the Act. All this would indicate that Assessing Officer had formed an opinion while passing the order dated 9th March, 2005. This Court in Aroni Commercials Ltd. v/s. Assistant Commissioner of Income Tax 367 ITR 405 had occasion to consider somewhat similar submission made by the Revenue and negatived the same by holding that when a query has been raised with regard to a particular issue during the regular assessment proceedings, it must follow that the Assessing Officer had applied his mind and taken a view in the matter as is reflected in the Assessment Order. Besides, the manner in which an A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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