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2013 (3) TMI 32 - ALLAHABAD HIGH COURTReopening of assessment completed under section 143(1) - as per AO deduction on account of guest house maintenance expenses to be disallowed - Held that:- It is not in dispute that the assessment was completed under section 143(1) on 6th January, 1987 & subsequently AO noticed that the guest house maintenance expenses had been claimed which was not allowable, therefore, he had reason to believe that the income had escaped assessment. It is note worthy to mention that the assessment order framed u/s 143(1) did not require any application of mind as the same is subject to certain adjustment. The return was accepted and the order was passed. Thus, it cannot be said that there was any application of mind while passing the assessment order and if subsequently it comes to the notice on the basis of the material already on record that an item of expenditure has wrongly been allowed which is against the specific statutory provision then certainly it is not a case of change of opinion but there was reason to believe that the income had escaped assessment. Thus reopening of the assessment completed under section 143(1) by issue of a notice under section 148 was valid. Claim of expenses on the maintenance of guest house - Held that:- As decided in Britannia Industries Ltd.(2005 (10) TMI 30 - SUPREME COURT) in view of specific provision of section 37(4) expenses incurred on the maintenance of guest house is not to be allowed - appeal decided against the assessee.
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