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The Asstt. Commissioner of Income Tax –CC-40 Versus. M/s Saf Yeast Co. Pvt. Ltd. & vice versa

2015 (7) TMI 1076 - ITAT MUMBAI

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. - Decided in favour of assessee

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e 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 adjudication - Decided in favour of assess .....

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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 allowable as business expenses under the provisi .....

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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 original return had already been accepted u/s .....

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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 decision (supra) being in the assessee s .....

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ng 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 taken up first. Taking us through the first .....

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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 Orient Craft Ltd (2013) 215 Taxman 28; iv) M/ .....

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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 assessee has claimed depreciation on land am .....

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