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2014 (2) TMI 238 - MADRAS HIGH COURTLegality of reopening of assessment – Bar of limitation u/s 147 of the Act - The assessee has explained and disclosed the entire facts which would constitute a full disclosure thus, the reopening of assessment is barred by the proviso to section 147 - the Tribunal has correctly appreciated the facts in holding that the reopening of the assessment orders are barred by limitation - the Commissioner of Income-tax (Appeals) as well as the Tribunal has concurrently held from the facts that the proviso to section 147 would not apply to the facts of this case. The reassessment was merely a relook of the earlier assessment with a change of opinion - the Assessing Officer reopens the assessment are actually vague and fanciful - the Commissioner of Income-tax (Appeals) came to a conclusion that the reasoning assigned by the Assessing Officer are not sufficient and thus, the reopening of the assessment was bereft of materials to come to a conclusion that there were reasons to believe that the income has escaped assessment – there was no substantial question of law arises – Decided against Revenue. Licence fee to be deducted as business allowance – Held that:- RPG Life Sciences as well as Philip Carbon Black are group companies of RPG Enterprises Ltd. and that both these companies are paying licence fees to RPG Enterprises Ltd - the expenditure incurred by the respondent assessee towards licence fee payment were relatable to the business expediency and profits of the respondent-assessee and that the benefits availed of by the respondent-assessee from the service of the group resource company was tangible and justified – Decided against Revenue. Interest paid on borrowed capital u/s 36(1)(iii) of the Act – Held that:- The appellate authority and the Tribunal found that the investment made in shares by the assessee by utilising borrowed capital was for strategic business purposes because the companies were promoted as special purpose companies to strengthen and promote its existing business by combining different business segments, thus, the claim was fully allowable under section 36(1)(iii) - the Revenue did not adduce any material to show that the borrowed capital was utilised by the assessee for non-business purposes - The appellate authority was correct in allowing the claim of the assessee and deleting the disallowance made by the assessing authority - the Tribunal in correct appreciation of the matter had in turn confirmed the finding of the appellate authority – Decided against Revenue.
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