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TMI Blog2024 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also details of deductions claimed u/s 35 of the Act with supporting documents. Another communication was received by Petitioner u/s 142(1) calling upon Petitioner to provide data in the format prescribed for deduction claimed u/s 80IC details of products manufactured at 80IC Units and details of products sold from these Units, item-wise details of direct expenses which has been considered for allocation to 80IC Units, details of claim u/s 35 along with DSIR certificate of expense in Form 3CL and any other certificate obtained or required to be obtained in this regard, details of R D activity being carried on in respect of which deduction has been claimed and details of expenditure in CSR for which deduction u/s 80G has been claimed. Petitioner through its Chartered Account s letter gave data in connection with deductions claimed. In the assessment order it is accepted that questionnaire along with two notices u/s 142(1) were issued and the further details were called for from time to time during the course of assessment proceedings and Petitioner from time to time furnished the details called for. In the assessment order, the AO has also dealt with Petitioner s claim for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 552/-. 2. It is found from the return and the details available on record that, the assessee s income chargeable to tax has been under-assessed on account of following issues: 2.1 Claim of provisions against unascertained liabilities: The assessee claimed year end provisions for Press Including production, and Television under sub-head Advertising and Publicity for Rs. 38,26,02,038/- and Rs. 16,24,90,310/- respectively and Export Markets under sub-head Advertising expenses for Rs. 34,66,34,334/- under the head Advertisement of Note 24 of Other Expenses. This provision of Rs. 89,17,26,682/- was made against the unascertained liability which is contingent in nature. Hence, the provision of Rs. 89,17,26,682/- was not an allowable expense which is required to be disallowed. 2.2 Claim of excessive deduction u/s. 35(2AB) of the Act: The assessee in their computation claimed Rs. 6,38,97,55,364/- as deduction u/s 35(2AB) in respect of scientific research as revenue expenditure. The tax auditor in Form 3CD qualified that amount allowable is Rs. 6,38,97,55,364/- u/s 35(2AB) and that amount was claimed and accordingly debited to the Profit and loss account. It is however found from the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion shown under head Advertisement and Publicity of Annexure 7 are common in nature. Hence, these amounts should be taken for computation of apportionment of expenditure. Details of the item wise expenses are as under:- Press incl production Rs. 91,66,29,505/- Television Rs. 90,01,42,033/- Hoarding incl production Rs .7,73,20,010/- Misc. Production expenses Rs. 39,53,19,715/- Publicity material printing expenses Rs. 1,83,64,734/- Internet and Telecommunication Rs.8,29,74,459/- Total Rs. 239,07,50,456/- Total amount of Rs. 253,74,56,609/- (Rs. 14,67,06,153/- + Rs. 2,39,07,50,456/-) should be added to the balance amount of Rs. 759,70,58,532/- for computation of allocable expenses. Thus the actual common expenses works out to Rs. 1013,45,15,141/- as against Rs. 759,70,58,532/- worked out in the assessment. The incorrect computation resulted short apportionment of allocable expenses to Pantnagar Unit-II to the extent of Rs. 68,56,53,520/- which was worked out by multiplication of common expenses with the ratio of Gross income of Pantnagar unit-II and Gross income of M/s Bajaj Auto Ltd. (BAL) (Rs. 15,96,72,31,956/2,36,00,86,38,660 X Rs. 10,13,45,15,141/-). In the concluded assessment ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 was received by Petitioner under Section 142(1) of the Act calling upon Petitioner to provide data in the format prescribed for deduction claimed under Section 80IC of the Act, details of products manufactured at 80IC Units and details of products sold from these Units, item-wise details of direct expenses which has been considered for allocation to 80IC Units, details of claim under Section 35 along with DSIR certificate of expense in Form 3CL and any other certificate obtained or required to be obtained in this regard, details of R D activity being carried on in respect of which deduction has been claimed and details of expenditure in CSR for which deduction under Section 80G has been claimed. Petitioner through its Chartered Account s letter dated 10th December 2019 gave data in connection with deduction claimed under Section 80IC of the Act and details of expenditure in CSR for which deduction under Section 80G was claimed. Thereafter, by Chartered Accountant s letter dated 16th December 2019, Petitioner furnished details of deduction claimed under Chapter VIA of the Act with documentary evidences. This was followed by another letter dated 18th December 2019 from Petitioner s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of assessment proceedings on a specific query made by the Assessing Officer, the petitioner has disclosed in detail as to why its profit on sale of investments should not be taxed as business profits but charged to tax under the head capital gain. In support of its contention the petitioner had also relied upon CBDT Circular No. 4/2007 dated 15 June 2007. (The reasons for reopening furnished by the Assessing Officer also places reliance upon CBDT Circular dated 15 June 2007). It would therefore, be noticed that the very ground on which the notice dated 28 March 2013 seeks to reopen the assessment for assessment year 2008-09 was considered by the Assessing Officer while originally passing assessment order dated 12 October 2010. This by itself demonstrates the fact that notice dated 28 March 2013 under Section 148 of the Act seeking to reopen assessment for A.Y. 2008-09 is based on mere change of opinion. However, according to Mr. Chhotaray, learned Counsel for the revenue the aforesaid issue now raised has not been considered earlier as the same is not referred to in the assessment order dated 12 October 2010 passed for A.Y. 2008-09. We are of the view that once a query is rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed under Section 143(3) of the Act even if it does not reflect any consideration of the issue it must follow that no opinion was formed by the AO in the regular assessment proceedings cannot be accepted. The Court held that where queries have been raised during the assessment proceedings and Assessee has responded to the same then the non-discussion of the same or the non-rejection of response of Assessee would necessarily mean that the AO has formed an opinion accepting the view of Assessee, thus taking a view/forming an opinion. Paragraph 6,7,9,10,11,12 read as under: 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 disclosed all material facts truly and fully for assessment and assessment is completed under Section 143(3) of the Act, the reopening is permissible within a period of four years from the end of the relevant assessment year. The only condition precedent fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot deal with that issue in the assessment order. In fact, our Court in GKN Sinter Metals Ltd. v. Ms. Ramapriya Raghavan, Asstt. CIT [2015] 55 taxmann.com 438/232 Taxman 386/371 ITR 225 (Bom.) had occasion to dealt with the similar/identical submissions on behalf of the Revenue viz. that an assessment order passed under Section 143(3) of the Act does not reflect any consideration of the issue, it must follow that no opinion was formed by the Assessing Officer in the regular assessment proceedings. This submission was negatived by this Court by observing as follows:- 14. According to the Revenue, it could only be when the assessment order contains discussion with regard to particular claim can it be said that the Assessing Officer had formed an opinion with regard to the claim made by the assessee. This Court in Idea Cellular Ltd. v. Deputy Commissioner of Income Tax 301 ITR 407 has expressly negatived on identical contention on behalf of the Revenue. The Court held that once all the material was placed before the Assessing Officer and he chose not to refer to the deduction/claim which was being allowed in the assessment order, it could not contended that the Assessing Officer had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings and the Petitioner has responded to the query to the satisfaction of the Assessing Officer as is evident from the fact that the Assessment Order dated 9th March, 2005, accepts the Petitioner's claim for deduction under Section 80-IA/IB of the Act. It must follow that there is due application of mind by the Assessing Officer to the issue raised. The above observations apply on all fours to this Petition, so far as the Revenue's submission of no change of opinion is concerned. 11. The further submission of Mr. Walve that in the absence of the Assessing Officer adjudicating upon the issue it cannot be said that the Assessing Officer had formed an opinion during the regular assessment proceedings leading to the order dated 30 January 2018. An adjudication would only be on such issue where the assessee's submissions are not acceptable to the Revenue, then the occasion to decide a lis would arise i.e. adjudication. However, where the Revenue accepts the view propounded by the assessee in response to the Revenue's query, the Assessing Officer has certainly to form an opinion whether or not the stand taken by the assessee is acceptable. Therefore, it must follow tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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