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2023 (10) TMI 566 - BOMBAY HIGH COURTReopening of assessment - tax payable on the book profits in terms of Section 115JA of the Act would be higher than the income computed under the normal provisions of the Act - HELD THAT:- ITO/Respondent no. 1, in our view, failed to appreciate that he had no jurisdiction to reopen the assessment because no income had infact escaped assessment. As stated in petitioner’s letter even if it is stated that ITO/Respondent no. 1 is right in his allegations that petitioner had offered said quantum of long term capital loss, that would still have no impact because petitioner continues to be liable to pay tax on the basis of profits computation as per Section 115 JA - We do not agree with respondent no. 1 that even if, no income had escaped assessment as on the date of the issue of the notice, one had to take into account the position that may arise as a result of further additions that may or may not be made in the final assessment order. He should have realised that he had no jurisdiction to proceed on the basis that some hypothetical income may be detected as a result of further investigations that may be conducted. In the recorded reasons, as alleged that petitioner has over stated the amount by taking cost of acquisition of the 2,00,000 shares of Gammon India Limited at Rs. 242.01 instead of Rs. 248.88 per share. The fact is, respondent no. 1 has not disputed that in the return and computation of income filed by petitioner, the complete facts relating to cost of acquisition of the shares has been disclosed by petitioner. The return makes it clear that the said 2,00,000 shares were purchased in FY 1995- 1996 for Rs. 4,97,75,438/- which works out to Rs. 248.88 per share. Therefore, there is no fresh tangible material to reopen the assessment. Since petitioner has paid tax on the basis of book profits in terms of Section 115 JA of the Act and the fact that even if revenue’s case as set out in the reasons is accepted, there would be no change in the income offered to tax and the tax payable on the book profits in terms of Section 115 JA of the Act would be higher than the income of computation under the normal provision of the Act. The provisions of Section 152(2) of the Act states proceedings u/s 147 will be dropped if the assessee is able to establish that he had been assessed on an amount or the sum not lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into account. It is rather clear that the notice is issued without jurisdiction - Reopening notice set aside - Decided in favour of assessee.
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