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2013 (12) TMI 897 - AT - Income TaxValidity of assessment u/s 147 - Held that:- The AO in this case had reopened the assessment on three different grounds - The AO in the reasons recorded has not mentioned anywhere regarding any facts being not disclosed truly and fully by the assessee - The AO had reopened the assessment only on account of retrospective amendment to the Explanation 1 to section 115JB (2) by the Finance Act 2009 with effect from 1.4.2001 - As per amendment any amount set aside as provision for diminition in the value of assets has to be added to book profit - The retrospective amendment no doubt can be made the basis for reopening of the assessment but in cases where assessment has already been made u/s 143(3) as in this case and four years have elapsed from the end of relevant assessment year, reopening can be made only if there is failure on part of the assessee to disclose truly and fully all material facts - The provisions for bad and doubtful debts have been added by the assessee in the computation of income under the normal provisions which is clear from the details of computation of income - AO was not required to discover it from examination of book of accounts - There was no failure on part of the assessee to disclose truly and fully all material facts relating to provisions for bad and doubtful debts - Reopening on account of failure to add back the provisions to the book profit cannot be upheld. Deferred tax credit was because of reversal of provision made in earlier year, it was only an accounting entry and there was no real income and, therefore, it was reduced from the profit - The AO has reopened the assessment as per the subsequent amendment by the Finance Act 2008 w.e.f 1.4.2001 - Amount of deferred tax credited to the P&L Account is required to be reduced while computing the book profit in terms of clause (viii) of Explanation 1 to section 115JB(2) - The AO had reopened the assessment in 2010 when this particular provision was already on the statute - There was no escapement of income on this account and reopening based on this reason cannot be justified. Any income which is eligible for reduction u/s 10A is required to be reduced and expenses relating to such income are required to be added - Entire income which is eligible for exemption u/s 10A is required to be reduced and not only the income which is actually allowable as deduction u/s 10A - The assessee has acted clearly in accordance with provisions - Decided in favour of assessee.
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