TMI Blog2016 (8) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... of both divisions were maintained and also presented before the Assessing Officer during the course of assessment. This is therefore, a clear case where, there was no failure on part of the assessee to disclose truly and fully all material facts necessary for assessment. Notice for reopening which was issued beyond a period of four year must therefore, fail. The same is therefore quashed. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 4005 of 2016 - - - Dated:- 19-7-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR B S SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner has challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible for deduction). The assessee has debited the financial charges between the respective lines of business, as per the loans taken. It is also seen that assessee has also distributed the relevant manufacturing expenses. As per law, the expenses which have direct nexus with any line of business should be debited to such respective business, whereas the indirect expenditure (or common expenditure needs to be split between the different lines of business. However, regarding the administrative expense and the other expenses, it is evident that the assessee company has debited a sub of ₹ 1,72,48,250/- and ₹ 58,43,886/- respectively on these account, out of which only ₹ 1,36,829/- ( only 0.59%) has been debited to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total assets value Windmill asset value Percentage of windmill block to total block 2,75,86,028 8,02,87,769 74.42% B. Calculation of profit ratio. Total business income Income from windmill Percentage of windmill income to total business income 5,76,55,839 1,81,96,506 31.56% C. Average of A and B above: (74.42 + 31.56)/2 = 52.99% Hence, 52.99% of the administrative expenses and the other expenses amounting to ₹ 2,30,92,136/- should be debited to the windmill divisions thereby reducing their total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of all the expenses in the nature of manufacturing expenses, administrative expenses, financial expenses, financial expenses and depreciation for all the divisions and thus, there is no question of there being any common expenses for both the divisions. Thirdly , on the basis of maintenance of separate books of accounts, the statutory auditor has also prepared separate audit reports for both the divisions wherein also; all the expenses stands clearly categorised under the head, Manufacturing , administrative , Financial and Other expenses. (d) Fourthly, our company has also prepared separate divisionwise computation of Income for each of the windmills installed by it and the said separate computation of income al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts or application of mind. From the aforesaid facts there remains no doubt that all the expenses for each of the divisions stands verified and accepted by the then learned AO and therefore, it gets established that there is no failure on the part of our company to disclose fully and truly all the material facts necessary for assessment. Thus, in the absence of any failure on the part of our company to disclose fully and truly all the material facts necessary for the assessment the impugned notice being issued after the statutory period of 4 yeas is timebarred and is required to be quashed outrightly as being badinlaw. Such objections came to be rejected by the Assessing Officer by an order dated 29.02.2016. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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