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PR. Commissioner of Income Tax-Vadodara-1 Versus Gujarat State Fertilizer & Chemicals Ltd.

2016 (1) TMI 85 - GUJARAT HIGH COURT

Reopening of assessment - Held that:- Assessing Officer had pressed in service two elements for issuing notice for reopening. First was with respect to the disallowance of expenditure under section 14A of the Act. Such issue was examined by the Assessing Officer in the original order of assessment and made suitable disallowances. The Tribunal therefore, correctly held that any reconsideration of the issue would only amount to change of opinion.

With respect to the second element name .....

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al, JJ. For the Appellant : Mr K M Parikh, Adv For the Respondent : Mr Manish J Shah, Adv ORDER ( Per : Honourable Mr. Justice Akil Kureshi ) 1. These appeals arise in similar background. We may therefore, record facts from Tax Appeal No. 814/2015. the Revenue has challenged the judgement of Income Tax Appellate Tribunal raising the following questions for our consideration : (i) Whether Tribunal was justified on facts and in the circumstances of the case and in law in not appreciating the undis .....

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in law in holding that the Assessing Officer already formed an opinion with regard to disallowance made under section 14A of the IT Act and therefore, reopening on account of disallowance under section 14A of the IT Act would be a case of change of opinion? 2. Issue pertains to the assessment year 2006-2007 and concerns the validity of reopening of assessment which was previously framed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961. The reasons recorded by the Assessi .....

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akh. Total investment during the year was ₹ 12984.55 lakh as per the schedule-6 of B/S. Thus, in view of application of Rule 8D and the decision of the ITAT spl Bench, Mumbai in case of M/s. DAGA Capital Management Pvt. Ltd v/s. ITO (117 ITD 169) that provisions of 14A(2) and (3) are clarificatory in nature and would apply retrospectively and in result rule 8D would also apply accordingly. An amount of ₹ 761.34 was actually required to be allowed u/s.14A as expenses pertaining to ear .....

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hat the reopening was bad in law making the following observations : 7. We have heard the rival submissions and perused the material on record. It is an undisputed fact that the original assessment was framed u/s.143(3) vide order dated 26.12.2008 and thereafter the notice under section 148 has been issued on 12.03.2010 and thus reopening has been initiated within a period of 4 years from the end of the relevant assessment year. Since the reopening is with a period of 4 years, the proviso to Sec .....

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that income chargeable to tax has escaped assessment on the basis of tangible material. Further, when all material facts necessary for determination of the income has been disclosed by the Assessee and the Assessing Officer has taken a particular view on those disclosed facts while passing the assessment order in regular proceedings, then without anything more, it would not be open for the Assessing Officer to reopen the assessment proceedings as reopening in such a case would be reopening on ac .....

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he conclusion that as against nil expenses said to have been incurred by the assessee and therefore no disallowance under section 14A, Assessing Officer worked out the disallowance under section 14A at ₹ 1.43 crores. Thus it can be seen that the Assessing Officer in the course of original proceedings and on the basis of submissions made by the assessee had formed an opinion about the disallowance to be made under section 14A and had accordingly made the disallowance and in such a situation .....

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