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2015 (8) TMI 831 - ITAT DELHI

2015 (8) TMI 831 - ITAT DELHI - TMI - Reopening of assessment - Held that:- Admittedly, there was no scrutiny assessment. Hence, based on the information contained notes to account, the audit party pointed out to the Assessing Officer that impugned amount cannot be allowed as deduction as the amount was paid for infraction of law. The Assessing Officer after considering the information had come to a conclusion that the income got escaped assessment and therefore, initiated the reassessment proce .....

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ehold to freehold. In our opinion, the claim was not on account of bad debts, but towards the charges paid for regularization usage of building. The mere nomenclature in the books of account does not determine the allowability or otherwise of the claim and, therefore, considering the fact that the amount was paid under the policy announced by the Government itself, it does not amount to penalty for infraction of the any provision of law. Following the ratio laid down in the case of CIT Vs. Ahmed .....

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of Commissioner of Income Tax (Appeals)-XVIII, New Delhi dated 14.01.2013 in Appeal No. 240/11-12 raising the following grounds of appeal: "1. That on the facts and circumstances of the case, the learned CIT(A) erred in upholding the assumption of jurisdiction of the AO. in issuance of a notice u/s 148 of the Act, despite there being "no reason to believe" nor any fresh material to form a belief that income had escaped assessment. 2. With prejudice the aforesaid ground of appeal, .....

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ar 2004-05 on 29.10.2004, declaring loss of ₹ 25,93,937/-. After processing the return of income u/s 143(1) of the Act, the case was reopened u/s 147 of the Act by issuing notice u/s 148 and the assessment order came to be passed on 28.11.2011 u/s 143(3) r.w.s.147 of the Act at the total income of ₹ 2,30,770/-. In the return of income, the assessee had claimed ₹ 23,63,187/- written off debts, debited to P&L account. In the notes to accounts, it is mentioned that the amount .....

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Delhi who vide order dated 14.01.2013 dismissed the appeal both on the preliminary issue relating to challenge of reassessment proceedings as well as merits of the addition. Hence, the present appeal before us. 3. The Ld. AR strongly pleaded that there was no reason to believe that income got escaped assessment. The reassessment notice was issued after the expiry of four years and there was no failure on its part to disclose fully all material facts. He further pleaded that even the assessment u .....

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302 (Mum. ITAT) 4. On merits, he submitted that the payment was made not for infraction of any law, but for regularization of the usage of rented billing for commercial purposes as per the scheme announced by the DDA. On the other hand, Ld. DR submitted that the amount cannot be allowed as a deduction in as much as the amount was paid infraction of law and placed reliance in this regard on the decision of the Hon'ble Madras High Court in the case of Rane Brake Linings Ltd. reported in 115 Ta .....

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ormation had come to a conclusion that the income got escaped assessment and therefore, initiated the reassessment proceedings. In our considered view this constitutes reason to believe that income got escaped assessment. Therefore, the case laws relied upon by the AR are not of any help. Therefore, the reassessment proceeding was valid. 6. Now, we shall deal with the merits of the addition. The premises were taken on rent vide lease deed dated 31.05.1961. In accordance with clause 3 of said lea .....

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ter dated 29.09.1961 granted permission for use of premises for business purposes upon payment charges as determined in the said letter. The demand on account of misuse charges of ₹ 21,93,187/- was paid under protest and contested by the appellant. The payment on 16.03.1994 of ₹ 3,94,159/- and by way of FDR with the High Court of 18 lacs. The litigation was pursued before the High Court. The Govt. introduced conversion policy from leasehold to freehold in August 2003 and accordingly .....

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