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2018 (4) TMI 1000 - ITAT MUMBAIRe–opening of assessment u/s 147 - payment of Octroi to BMC allowability - change of opinion - Held that:- While completing the original assessment AO after examining the tax audit report has formed an opinion that the deduction claimed by the assessee on account of Octroi payment is allowable. Thus, in the absence of any fresh tangible material coming to the possession of AO, the re–opening of assessment on re–examination of the very same material on the basis of which the original assessment was completed amounts to re–opening of assessment on a mere change of opinion resulting in review of the decision taken by the AO in the original assessment year is beyond the scope of section 147 - the impugned assessment order passed under section 143(3) r/w section 147 deserves to be quashed. Relying upon the tax audit report, AO has concluded that the amount of ₹ 10,50,058 is in the nature of penalty paid to the BMC. However, on a perusal of the tax audit report submitted in the paper book we have noticed that the amount of ₹ 10,50,058 has been shown as Octroi payment to BMC and an amount of ₹ 11,18,335, has been shown as penalty. Admittedly, the assessee itself has disallowed the penalty of ₹ 11,18,335, in its computation of income. Therefore, the material on record clearly establish that the amount of ₹ 10,50,058 claimed as deduction by the assessee is not in the nature of penalty. As regards the observations of the Commissioner (Appeals) that the payment pertains to earlier period and secondly assessee in the earlier year has debited the amount to its Profit & Loss account, in our opinion such finding of the learned Commissioner (Appeals) is irrelevant for the impugned assessment year. When the assessee has brought material on record to demonstrate that the demand for Octroi and penalty have been raised by the BMC in the impugned assessment year and assessee has also made such payment in the impugned assessment year, there is no reason why assessee’s claim of deduction should not be allowed in the impugned assessment year. If the assessee has claimed any deduction wrongly in the earlier assessment year then the issue has to be dealt with in the said assessment year and not in the impugned assessment year. Therefore, the deduction claimed by the assessee on account of payment of Octroi to BMC is allowable. - Decided in favour of assessee.
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