Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 1422 - ITAT HYDERABADDisallowance u/s 36(1)(iii) interest expenditure alleging diversion of interest bearing funds for non business purposes - HELD THAT:- No reason to accept either parties’ stand in entirety. This is for the clinching reason that both the learned lower authorities appear to have placed reliance on alleged concession made by the group concern M/s. Indur Developers and Agencies Pvt. Ltd wherein there is no clarity as to whether the same specifically covered all other group activities or the said assessee only which are specifically assessed; or not. Assessee’s stand all along is that the impugned advances by way of non-current investments nowhere carried out any interest-bearing funds at all. Revenue’s contentions on the other hand is that the assessee had itself sought to claim finance costs pertaining to its borrowing regarding development of plots. Be that as it may, this is apart from the fact that the clinching issue as to whether the assessee’s borrowings or advances in plotting activity contain interest stipulation or not has nowhere been examined in light of all relevant facts. We therefore deem it appropriate to restore this entire instant issue back to the Assessing Officer for his afresh factual verification. It is made clear that the assessee shall be very much at liberty to raise all factual as well as legal arguments in consequential proceedings as per law. Validity of reopening of assessment u/s 147 or u/s 153A r.w.s. 153C - HELD THAT:- We find no merit in assessee’s instant legal ground since there is no material found in the Assessing Officer’s reopening reasons suggesting the impugned proceedings as based on any seized material belonging, pertaining or relating to this taxpayer. We thus hold that the Assessing Officer had rightly initiated section 147 / 148 reopening herein. This first and foremost issue is decided in Revenue’s favour therefore. Addition of notional interest on debentures income - HELD THAT:- There is no material on record in either the Assessing Officer or the CIT(A)’s detailed discussion throwing light in the corresponding details of the debentures scheme in issue which could be taken as benchmark for making the impugned addition. It further transpires that the assessee’s stand from day one was that it had neither credited the corresponding interest income nor actually received the same in the relevant previous year. We rather note that it had sought to file its additional evidence under rule 46A of the Income Tax Rules which stands declined in the CIT(A)’s order. We thus are of the opinion that larger interest of justice would be met in case the instant issue is also restored back to the Assessing Officer to first examine the corresponding debentures scheme if any; followed by the actual credit or payment of interest in assessee’s favour. Validity of reopening of assessment u/s 147 - Notice beyond a period of four years - HELD THAT:- DR would hardly rebut the clinching fact that the Assessing Officer had initiated the impugned proceedings after a lapse of more than 4 years from the end of the relevant assessment year without recording any reason that the assessee had not disclosed all the relevant particulars “fully” and “truly” in light of section 147 1st proviso. We make it clear that there is hardly any scope for addition or deletion or substitution in such reopening reasons in light of hon’ble Bombay high court’s landmark decision in Hindustan Lever Ltd Vs. R.B. Wadkar [2004 (2) TMI 41 - BOMBAY HIGH COURT] holding that re-opening reasons recorded by the Assessing Officer have to be read on standalone basis only. We thus quash the impugned reopening for this sole reason.
|