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2017 (7) TMI 1294 - HC - Income TaxReopening of assessment - Allowability of deduction under Section 10A on the profits of foreign branches in the case of the three undertakings (Shivalaya unit, Chennai unit and GNR unit) and Allowability of provision for doubtful debts - HELD THAT:- Both these issues had been examined by the AO during the original assessment proceedings under Section 143 (3) of the Act. There was neither any failure by the Assessee to disclose the relevant materials nor was there any fresh tangible material to justify the AO's formation of belief that income had escaped assessment. Consequently, the Court is satisfied that the jurisdictional requirement of there having to be a failure by the Assessee to make a full and true disclosure of the material facts relevant for the assessment in terms of the first proviso to Section 147 of the Act is not fulfilled in the present case. Deduction under Section 10A there was a complete disclosure of all the relevant facts for each of the units in respect of which the deduction was claimed. The certificate in Form 56F as prepared by the CA, enclosed the calculations for the deductions claimed. The assessment order also shows that the AO had applied its mind to the issues and after considering the explanation submitted by the Assessee, allowed the deduction. There was no fresh tangible material available with the AO which would justify the formation of the reasons to believe that income had escaped assessment. The mere conclusion that the deduction under Section 10A and 80HHE was ‘wrongly claimed’, without anything more, would not satisfy the statutory requirement or be a sufficient justification for reopening the assessment. Alleged failure by the Assessee to add back to its income comprising the provision for doubtful debts, the Court finds that the computation in that regard was furnished by the Assessee as is evident from the documents placed on record in the original assessment proceedings. In the letter addressed by the AO to the Assessee, this aspect was specifically adverted to. The reply by the Assessee also dealt with it. Not possible to accept the Revenue’s case that on this aspect there was any failure by the Assessee to make a full and true disclosure of all material facts relevant to the assessment - neither of the reasons on the basis of which the assessment for AY in question was sought to be reopened by the AO are tenable in law. - Decided in favour of assessee.
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