TMI Blog2012 (7) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... pur University they were duly approved under notification issued under Income Tax Act of 1922 held to be valid for the purpose of successor Act also. Merely because such notifications were not produced on record during the original assessment, can hardly be a ground for reopening the assessment beyond a period of four years - decided in favour of assessee. - Special Civil Application No.9826 of 2009 - - - Dated:- 10-7-2012 - Akil Kureshi and Harsha Devani, JJ. For Appellant: Mr S N Soparkar, Sr. Adv. Mrs Swati Soparkar For Respondent: Mr K M Parikh JUDGEMENT Per: Akil Kureshi: 1. The petitioner has challenged a notice dated 30.3.2009, as at Annexure A to the petition, by which the respondent sought to reopen the assessment of the petitioner for the assessment year 2002-03. The petition arises in following factual background. 2. The petitioner - Dhara Vegetable Oil Foods Co. Ltd. (now merged with Mother Dairy Fruits Vegetables Pvt. Ltd.), is a company registered under the Companies Act, 1956 and assessed to tax regularly. For the assessment year 2002-03, the petitioner filed its return of income declaring a total income of Rs.7.87 crores (rounded off) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, the assessee could not produce the proofs evidencing that the universities were approved in accordance with Rule 5C and subject to conditions as per Rule 5-E as required u/s 35(1)(ii). The assessee during the course of assessment proceedings for A.Y. 2006-07 had (i) withdrawn sizable amount of claim, (ii) certain amount of claim was withdrawn from section 35(1)(ii) and claimed u/s 35(1)(i). However, the claims were disallowed. The perusal of the records for A.Y. 2002-03 reveals that the assessee had claimed deductions under sub-clause (i), (ii) and (iv) of sub-section (1) of section 35 of the I.T.Act. The details of which are as under :- U/s 35(1)(i) Rs.95,01,669/- U/s 35(1)(ii) Rs.90,98,541/- U/s 35(1)(iv) Rs.3,04,671/- The claims as above are made without supporting evidences / proofs and therefore not allowable. In view of the above discussion, income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. I have therefore reason to believe that income to the extent of Rs.1,89,04,881/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere examined threadbare by the Assessing Officer during the original assessment. No disallowance was made in a detailed order of assessment which the Assessing Officer had passed, though he had made various other additions and disallowances in such order. 10.1 Counsel submitted that the petitioner had placed full material before the Assessing Officer in the form of disclosure in the original return filed, the tax auditor's report, as also additional documents which were produced in response to queries issued by the Assessing Officer. There was, thus, no failure on the part of the assessee to disclose truly and fully all material facts. He, therefore, submitted that the notice is without jurisdiction. 10.2 Taking us through the details of such claims, counsel pointed out that the very issue of scientific research came to be decided by the Bombay High Court in favour of the assessee in case of National Rayon Corporation Ltd. (supra). 10.3 With respect to the payments made to the universities, counsel drew our attention to the copies of notifications produced on record under the Income Tax Act of 1922, approving such universities by the prescribed authority for deduction in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esearch and development work on oilseeds at Delhi and Nagpur universities which are institutions approved for the purpose of section 35(1)(ii) of the Income Tax Act, 1961. In addition, the company has also done the research and development at the research facilities set up at Mother Dairy, Delhi. The expenditure incurred being in the nature of revenue as well as capital, has been claimed under different sub-sections of section 35(1). 14.1 Along with the return, the petitioner had further given details of such expenditure in following manner : (a) Debited to Profit and Loss Account. (i) Research and development expenses. Name of Institute Section Amount Debited Rs. Deduction Allowable In House Research Expenses 35(1)(i) 19,11,669 19,11,669 Mother Dairy Fruits Vegetable Ltd. 35(1)(i) 75,90,000 75,90,000 Delhi University 35(I)(ii) 18,71,508 23,39,385 Nagpur University 35(I)(ii) 8,75,000 10,93,907 Total (Rs.) 122,48,303 129,34,961 Note: Delhi University and Nagpur University are approv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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