TMI Blog2015 (7) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... income has escaped assessment, even in a case where the return of income filed by the assessee has only been processed under section 143(1) of the Act, the completed assessment cannot be reopened. In the present casevidently, the reasons recorded for reopening the completed assessment of the assessee did not point out any material, tangible, 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, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee s own case, in the immediately succeeding assessment year, i.e., AY 2002-03; has decided this issue in favour of the assessee. 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 original return had already been accepted u/s.143(1) of the Act before the search had taken place, adhoc disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 page of the Assessment Order, it has been pointed out that the return of income filed was processed under section 143(1) of the Income tax Act, 1961 (the Act.). Drawing our attention to page 2, para 2 of the assessment order, the ld. Counsel of the assessee has contended that the AO has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 amounting to ₹ 73,37,491/-. As per legal provisions under the income-tax, no depreciation is allowable. Accordingly, assessee has claimed excess deduction and therefore income chargeable to tax has escaped assessment. It is further seen that in the Audit Report it is clearly mentioned that amount of expenditure inadmissible u/s. 40A(3) is of ₹ 21,600/-, even if it is taken that 20% of this is to be disallowed then disallowance has to be of ₹ 4,320/-. Instead assessee has disallowed only ₹ 1080 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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