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2017 (8) TMI 1185 - AT - Income TaxReopening of assessment - change of opinion - excessive deduction allowed towards expenditure incurred for demerger of certain units - specific provisions of section 35DD applicability - Held that:- Though the assessee claims to have furnished necessary details before the AO at the time of original assessment, the records clearly indicate that the AO has not examined the issue of deduction claimed towards stamp duty paid on demerger of units which shows non application of mind by the AO to the facts in the right perspective of specific provisions of section 35DD of the Act. Therefore, we are of the considered view that there is no merit in the contention of the assessee that reopening is made on the basis of mere change of opinion. In this case, on perusal of the facts, we find that the assessment order is silent on the application of mind by the AO to the correct facts in the light of the specific provisions of section 35DD of the Act. Therefore, we are of the view that it is not a case of mere change of opinion and hence, we reject the legal ground raised by the assessee. Allowance of expenditure towards stamp duty paid on demerger - Held that:- No doubt, section 35DD provides for deduction towards expenditure incurred wholly and exclusively for the purposes of amalgamation or demerger of an undertaking - But the fact remains that the expenditure incurred for payment of stamp duty is in the nature of expenditure referred to in section 43B - Since the provisions of section 43B has an overriding effect on all other provisions of the Act, any expenditure referred to in that section shall be allowed only on payment basis. - No additions - Decided in favor of assessee.
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