Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 1447 - AT - Income TaxReopening of assessment u/s 147 - disallowance of set-off of brought forward Unabsorbed Depreciation(UD) - HELD THAT:- Assessee had capitalised the difference between the accumulated losses and fresh capital issued by it. Not only this the difference was treated as goodwill and the goodwill was a mortised equally over a period of 60 months in the books of the accounts of the assessee. AO allowed the claim made by it without considering the above facts. On a specific query by the Bench the AR admitted that the goodwill was a mortised and that the difference of loss and fresh capital was capitalised in the books. Clear case of claiming double deduction. Considering the facts that the difference between the accumulated losses as on 26. 9. 2002 [of ₹ 19. 21 Crores less value of share capital of SSAPL of 11. 50 Crores (representing share capital extinguished of SSAPL)], capitalization of fresh capital, aggregating to ₹ 8. 86 Crores and treatment of goodwill in the books of the assessee, we are of the opinion that the FAA was justified in upholding the reassessment. Double taxation/double deduction is not permissible under the Act. In the case under consideration the assessee had claimed the amount of ₹ 2. 96 Crores as goodwill and had amortised it in the books of accounts. In addition to it, the assessee wanted it to the part of unabsorbed losses to be carried forward. Clearly, it is not permissible as per the provisions of the Act - assessee should not have reduced the UD in the computation of book profits u/s. 115 JB - Even if the AO while passing order u/s. 143(3) had allowed an impermissible deduction, it would not bar him from initiating proceedings u/s. 147. The purpose behind the section is to compute the income that has escaped assessment. In the case under consideration brought forward UD of SSAPLwas allowed in excess during the original assessment proceedings. So, if the AO initiated re-assessment procee dings to withdraw the excess allowance, no fault can be found with him. In Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT] AO has power of reopen an assessment provided there is tangible material to come to the conclusion that there was escapement of income from assessment and that reasons must have link with the formation of the belief. We find that in the case before us, there was tangible material before the AO, as the assessee has reduced the UD in computation of book profit against the clear intent of the legislature. Therefore, in our opinion cases relied upon by the assessee are of no help. We find that the matter relied upon by the DR, supports the stand taken by the FAA. Order of the FAA does not suffer from any legal or factual infirmity. So, confirming it, we decide ground no. 1 & 2 against the assessee.
|