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2016 (5) TMI 285 - DELHI HIGH COURT

2016 (5) TMI 285 - DELHI HIGH COURT - [2015] 378 ITR 318 - Reopening of assessment - whether the interest payments were to be on the revenue account or the capital account? - Held that:- The petitioner had claimed it as a revenue expense and that had been allowed in the original assessment proceedings. The extent of the claim was ₹ 25,07,124. As can be seen from paragraph 2 of the reasons, the Assessing Officer has done nothing but to re-examine the records which were already available and .....

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ve a detailed assessment order running into five pages. It cannot be inferred from these facts that the petitioner had not made a full and true disclosure of the material particulars necessary for assessment.

Valuation of the jobs in progress - With regard to the second point raised in the purported reasons, we find that the Assessing Officer has not even indicated the extent of the alleged escapement of income. Furthermore, the Assessing Officer has once again stated that on "perusal .....

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g Officer in the purported reasons that the assessee had failed to disclose full and true particulars of his income, is without any basis. Consequently, in view of the provisions of the first proviso to section 147 of the said Act, the Revenue cannot be permitted to reopen the assessment as the necessary pre-condition for doing so in a case which is beyond four years from the end of the relevant assessment year has not been fulfilled. - Decided in favour of assessee - W. P. (C.) No. 2029 of 2014 .....

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ated March 21, 2014, passed by the Assessing Officer disposing the objections raised by the petitioner. 2. The assessment in respect of the petitioner's income was completed under section 143(3) on December 15, 2010. The Assessing Officer had made certain additions on account of section 40(a)(ia) (Rs. 1,55,94,534) under section 14A (Rs. 1,55,603) and on account of extra depreciation claimed on computer peripherals (Rs. 6,87,043). 3. The impugned notice under section 148 was, as mentioned abo .....

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fully and truly all material facts necessary for his assessment" for that assessment year. It is in this context that the reasons given for reopening of the assessment have to be seen. 4. The purported reasons were as under : "Reasons for reopening the assessment under section 148 of the Income-tax Act in the case of M/s. Consulting Engineering Services India (P.) Ltd PAN AAACC 5110G for the assessment year 2007-08 Return of income in this case for the assessment year 2007-08 was filed .....

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unt of disallowance of extra depreciation claimed on computer peripherals. 2. On a perusal of records, it is noticed that the assessee-company has claimed interest expenses of ₹ 25,07,124 on term loans in the profit and loss account. Further, the assessee-company has shown capital work-in-progress (CWIP) at ₹ 2,83,56,670 for the period under consideration. However, the interest capitalised against the same has been shown at nil. From the above, it is clear that the asses see should h .....

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he original assessment proceedings and no findings were given on this issue by the Assessing Officer. In view of the above, I have reasons to believe that the taxable income to the tune of ₹ 25,07,124 has escaped assessment and I am satisfied that it is a fit case for issue of notice under section 148 of the Income-tax Act. 3. Further, on a perusal of notes to account in the case of the asses see-company, it has been reported by the auditors at serial No. 9 that the assessee has booked the .....

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ion method. However, as per the part B of audit report under section 44AB of the Income-tax Act, it has been mentioned that the valuation of the jobs in progress with reference to (a) above is limited to the realisable fee for the respective jobs whereas for the jobs in progress with reference to (b) above the valuation is subject to agreed realised fee to the extent of value of percentage of completion of each such. 4. Hence, it is clear that the assessee failed to disclose the true particulars .....

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ay point out that the petitioner had filed objections on August 22, 2013, and they were disposed of by the impugned order dated March 21, 2014. 5. From the purported reasons it appears that the Assessing Officer in the first instance had raised an issue as to whether the interest payments were to be on the revenue account or the capital account. The petitioner had claimed it as a revenue expense and that had been allowed in the original assessment proceedings. The extent of the claim was ₹ .....

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