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2017 (2) TMI 337 - HC - Income TaxReopening of assessment - assessee debited an amount under the head interest and finance charges on account of loan as in order to expand the business in USA, the company had established a step down subsidiary in USA. Held that:- As from the reasons recorded, it appears that according to the Assessing Officer, the expenditure was incurred to establish a subsidiary in USA, and therefore, such expenditure was covered under Section 35D [1] (ii) of the I.T Act, and therefore, only 1/5th of the expenditure ie., ₹ 47,23,722/- was required to be allowed. Instead, the entire amount claimed by the assessee ie., ₹ 2,36,18,612/- is allowed to be debited. Therefore, according to the Assessing Officer, his predecessor has wrongly allowed the entire amount of ₹ 2,36,18,612/- to be debited under the head “Interest and Finance charges”. In the reasons recorded, it is specifically observed by the Assessing Officer that, “..On observation of the assessment records,” meaning thereby, while issuing notice, the subsequent Assessing Officer did consider the material which was already on the record, which was considered by the Assessing Officer, while framing the scrutiny assessment under Section 143 of the Act. As observed hereinabove, even there is no allegation in the reasons recorded that there was any failure on the part of the assessee in not disclosing true and correct facts necessary for the assessment. - Reopening order unsustainable - Decided in favour of assessee.
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