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2015 (7) TMI 1076 - ITAT MUMBAI

2015 (7) TMI 1076 - ITAT MUMBAI - TMI - Disallowance at rate of 20% of the distribution expenses - Held that:- The adhoc disallowance having been based on no seized material, The Tribunal in assessee's own case having deleted the disallowance under similar facts and circumstances of the case, following the decision in the case of ‘CIT V/s Ashim Krishna Mondal' (2004 (7) TMI 80 - CALCUTTA High Court ), no contrary decision having been placed before us grievance of the department is rejected. - De .....

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ible, or otherwise, as having come to the possession of the AO, so as to enable him to form the opinion that income had escaped assessment. Thus, it is only a case of recording the reasons for re-assessment sans any material for the formation of such a belief. Therefore, such reopening of the completed assessment is void abintio and unsustainable in law. The very initiation of the reopening process, therefore, cannot stand. It is cancelled. As a consequence, thereof, nothing more survives for ad .....

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, the AO made adhoc disallowance at rate of 20% of the distribution expenses, on the ground that such expenses were not fully verifiable and they were supported by self made vouchers only. The ld. CIT(A) deleted the disallowance. 3. At the outset, the ld.DR has placed strong reliance on the order of AO. The ld. DR has contended that while wrongly deleting the addition, the ld.CIT(A) failed to appreciate that the entire amount of distribution expenses of ₹ 80,59,654/- did not stand allowabl .....

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. 5. In this regard, it is seen that the Tribunal (Mumbai Bench) in the assessee s case for AY 2002-03, deleted the disallowance made for the year, by observing as follows : 6. We observe that AO has made adhoc disallowance while completing assessment u/s.143(3) r.w.s. 153A of the Act, which are not based on any of the seized material found during the course of search. We are of the considered view that while making the assessment pursuant to search taken place and that too in a case where origi .....

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ring the course of search that the claim of the assessee is not genuine, we hold the order of ld CIT(A) to delete the adhoc disallowance made by AO does not call for any interference. The adhoc disallowance having been based on no seized material, The Tribunal having deleted the disallowance under similar facts and circumstances of the case, following the decision in the case of CIT V/s Ashim Krishna Mondal , 270 ITR 160 (Cal), no contrary decision having been placed before us and the Tribunal d .....

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d. CIT(A) erred in law in not appreciating that the land used for treating toxic effluent at the Appellant s factory had eroded and become totally useless during the course of carrying out its business. Therefore, the CIT(A) erred in not allowing the claim of ₹ 73,37,491/- as genuine business expenditure u/s 37 (1) of the Act. 3. The notice issued u/s 148 is bad in law . 7. The ld. Counsel for the assessee has contended that Ground No.3 pertaining to a jurisdictional issue, it is being tak .....

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verification of the case record that it was noticed that excessive relief had been claimed by the assessee. The ld.Counsel contends that as such, the action of reopening the completed assessment of the assessee is patently illegal, in as much as there was no material before the AO for forming a belief of escapement of income. Reliance has been placed on : i) H V Transmission Ltd V/s ITO -ITA No.2230/Mum/2010 dated 7.10.2011; ii) Delta Airlines, INC V/s ITO (2013) 153 TTJ 506; iii) CIT V/s Orien .....

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by the assessee has only been processed under section 143(1) of the Act, the completed assessment cannot be reopened. In the present case, as correctly pointed out, para 2 of the assessment order clearly shows that after processing the necessary return of income, on verification of the case record , it was noticed by the AO that excessive relief had been claimed by the assessee. Even the reasons recorded for reopening the completed assessment, read as follows: In this case, it is seen that asse .....

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