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2022 (2) TMI 1401 - AT - Income TaxReopening of assessment u/s 147 - deduction u/s 80IA disallowed - notice after four years from the end of relevant assessment year - as per AO deduction could not be allowed on old existing infrastructure facility, as such, the assessee does not fulfil the requisite condition for claiming deduction u/s 80IA - HELD THAT:- As there was no failure on the part of the assessee in disclosing fully and truly all necessary for assessment as the assessing officer fully and extensively examined the whole of the claims while finalising the assessment. The AO solely relied on the material information available on record. As assessment order passed by AO was the subject-matter of appeal before CIT(A) and principle of merger would apply. Moreover, there is no tangible material before the AO to reopen the assessment. Thus, we hold that the action of AO for re-opening is not valid as the original scrutiny assessment was the subject-matter of appeal before Ld. CIT(A) and again appeal before Tribunal, moreover, the action of Assessing Officer is based on “change of opinion” on similar set of fact. Moreover, it was overreaching to the decisions of the superior authorities on the similar set of fact on similar issues. Therefore, the re-opening is held as invalid and subsequent action initiated thereof are void ab initio. Disallowance of 10% ad hoc expenses for earning income from other source (interest income) - There is no dispute on the fact that the AO disallowed ad hoc expense @ 10% by taking view that no nexus was proved in the setting aside proceedings and that the assessee again failed to prove the nexus with the expense qua the interest income earned. Before us the assessee could not substantiate the cross- examination made the submission that same expense is certainly incurred. In the absence of any nexus, we are unable to concur with the submission of Ld. Sr. counsel for the assessee. Therefore, we affirm the order of Ld. CIT(A). In the result of assessee’s appeal is dismissed. Penalty levied u/s 271(1)(c) - HELD THAT:- As in quantum appeal we have set aside the assessment order by holding as invalid and based on change of opinion thereby accepted the appeal of assessee, therefore, the addition of disallowance under section 80IA does not survive, therefore penalty levied u/s 271(1)(c) has no leg to stand.
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