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2018 (12) TMI 763 - HC - Income TaxReopening of assessment - deduction u/s 80HHC - knowledge about scheme of amalgamation of two companies - rectification u/s 154 was sought on the ground that, there could be no claim made under sub-Clause (b) of Section 80HHC(1) of the Act, since there is no previous year to the relevant previous year. - Held that:- AO was in the know-how of the amalgamation proceedings. Annexure-F permission was granted for change of assessment year to HCL only by way of a request made at Annexure-E, which is specifically read in Annexure-F as letter dated 28.08.1984. The request for change of previous year specifically indicated that the amalgamation process was on and that they expect the order of the High Court of Kerala approving the scheme of arrangement and amalgamation, shortly. There is no warrant to assume that the assessment order at Annexure-G was passed without knowledge of the amalgamation. We also see that the order at Annexure-G specifically noticed the amalgamation as ordered by Annexure-D. It is also stated in the assessment order that HCL was amalgamated with the assessee Company w.e.f. 01.01.1983. In such circumstances, we do not think that there could be any re-assessment made under Section 147, since then it would merely be a change of opinion as decided in ANDHRA BANK LIMITED VERSUS COMMISSIONER OF INCOME-TAX [1996 (5) TMI 3 - SUPREME COURT] - Decided in favor of assessee. Permissibly to rectification u/s 154 - deduction under Section 80HHC(1)(b) - Held that:- The business of HCL when amalgamated with MPL, continued as the trading division of MPL. For the 27 months comprised in the previous year to the relevant assessment year, the trading division had an export turnover of ₹ 35,31,66,651/- to which was added the export turnover of the business of MPL, which was also ITAs.87,102, 108 & 201/2002 -19- continuing, coming to ₹ 37,16,659/-. The total of ₹ 35,68,83,310/- was taken for deduction under Section 80HHC(1)(a) at 1%. Then, the total export turnover of MPL for the previous year relevant to the assessment year 1985-86 was taken from which was deducted the export turnover of MPL for the previous year to the previous year which was only ₹ 87,34,764/-. The balance of ₹ 34,81,48,546/- was taken for deduction under Section 80HHC(1)(b) @ 5%. No infirmity in the same. But for the decision in Saraswati Industrial Syndicate Ltd., MPL [1990 (9) TMI 1 - SUPREME COURT] would have had to deduct the export turnover of HCL for the period from 01.01.1983 to 31.12.1983 being the previous year to the previous year comprising of 27 months, between 01.01.1983 to 31.03.1985. Correctly, the AO had also not at the time of passing Annexure-G order sought to deduct such turnover presumably being aware of the Supreme Court judgment. In such circumstances, we do not see any reason to interfere with the order passed at Annexure-G and the interference caused under Section 154 on rectification is found to be bad in law. - Decided in favour of the assessee
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