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2017 (4) TMI 871 - AT - Income TaxValidity of reopening of assessment - not adjusted the loss of the STP units at Hyderabad and Gurgaon against the profit from other section 10A units swelling it s claim for deduction under section10A to that extent - Held that - A perusal of the assessment order dated 26.12.2008 shows that the assessee had in fact claimed deduction at a higher amount i.e. without adjusting the loss (being at Rs. . 268.72 lacs) only during the assessment proceedings (vide letter dated 18.12.2008/PB pg. 29) that per the return of income being upon such adjustment duly supporting it with a certificate from the CA in Form F which on verification appeared correct and allowed on that basis (para 5 of the assessment order). How could then we wonder this form a reason for an income escaping assessment which is clearly a change of opinion barring reassessment. - Decided in favour of assessee Merger with Orbitech Solutions Ltd.- assessee had followed pooling of interest method in taking over the assets and liabilities of the amalgamating company - Held that - apart from not claiming any expenditure (claimed @ 1/5th as provided u/s. 35DD) for the current year also surrender that claimed for the earlier years citing the receipt from OBL on that account. In fact if there was any such understanding with OBL it would not have preferred any claim for merger expenses in the first place debiting the said expenditure to the account of OBL in it s accounts. In any case it would on its receipt (of merger expenses) transfer back the expenditure deducted from the General Reserve a/c (falling under the head Reserve there being no expenditure against which the same could be considered as received. Also the expenditure incurred where and to the extent claimed as a deduction cannot also be considered as having been recovered which would be inconsistent with the assessee s accounts duly audited and the returns duly verified furnished for the current preceding and even succeeding year/s. The same is as other receipts in-asmuch as there is no corresponding obligation to return the value received either in cash or any kind only in the nature of income and rightly assessed as so and in fact to that extent rightly taken in accounts to the income account. As regards the assessee s alternate claim the amount is neither in respect of export nor received in convertible foreign exchange and accordingly there is no basis for it s claim for deduction u/s. 10A or s. 80HHE in its respect. Qua quantum the AO shall verify the assessee s claim in this regard and decide on the foregoing terms on the basis of his factual findings. The onus to prove its claim/s we may add would be on the assessee. The assessee s claim is partly allowed on the foregoing terms disposing the aforesaid grounds of the appeal. Disallowance of legal and professional fee - Held that - reference to the Notes to the Accounts to the assessee s final accounts for AY 2009-10 is part of the legal charges paid to a law firm for acquisition of a US company by the name Data Inc. USA (at USD 6 lacs). The expenditure being in respect of acquisition of a company was thus construed as capital in nature. The primary facts are not disputed; in fact at any stage including before us being rather arising from the assessee s own audited accounts. We accordingly find no infirmity in the said disallowance and confirm the same.
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