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2015 (6) TMI 1070 - ITAT MADRAS

2015 (6) TMI 1070 - ITAT MADRAS - TMI - Reopening of assessment under section 147 - Held that:- In this case, the issue of reopening was done by the Assessing Officer under section 148 of the Act is justified for the reason that as per Explanation 2 (c) to section 148, where the income chargeable to tax are under assessed, it shall be deemed to have been income chargeable to tax has been escaped assessment. Therefore, in our opinion, the Assessing Officer, while passing the original assessment o .....

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allowance of interest expenses for the purpose of computation of disallowance under section 14A in the reassessment proceedings is not legally correct since the income escaped with respect to disallowance of expenditure under section 14A to the extent of the arithmetic mistake committed in the original assessment was correctly done by the Assessing Officer as per the law. Therefore, we find no infirmity in the order passed by the ld. CIT(A) and accordingly, the ground raised by the assessee is d .....

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essee has not able to produce any details i.e. bills and vouchers, etc. neither before the Assessing Officer nor before the ld. CIT(A) or even before the Tribunal. In view of the above facts and circumstances, this ground of appeal raised by the assessee is dismissed. - I.T.A.Nos.2843 and 2844/Mds/2014 - Dated:- 30-6-2015 - Shri Chandra Poojari, Accountant Member And Shri V. Durga Rao, Judicial Member. Appellant by : Shri Saroj Kumar Parida, Advocate Respondent by : Shri A.V. Sreekanth, JCIT ,-. .....

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9 on 30.09.2008 admitting total income of ₹ 1,02,59,730/-. The case of the assessee was selected for scrutiny and after due process, the assessment was completed under section 143(3) of the Act on 28.10.2010. The Assessing Officer has observed that assessee has received dividend income of ₹ 3,32,275/- and claimed exemption under section 10(34) of the Act and the assessee in its return of income has disallowed an expenditure of ₹ 3,687/- towards exempt income. However, the asses .....

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t of income and called reply from the assessee and completed the assessment under section 143(3) r.w.s. 147 of the Act on 31.12.2013 assessing income of the assessee at ₹ 1,51,23,146/-. 4. The assessee has challenged the reopening before the ld. CIT(A) and submitted that the assessment already completed under section 143(3) of the Act cannot be reopened on the ground that it is amounting to change of opinion. However, the ld. CIT(A), after considering the explanation of the assessee, has o .....

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CIT(A) has further observed that the bonafide mistake crept in the original assessment order was sought to be rectified by reopening the assessment by taking the correct value of the average total value of assets at ₹ 2,25,87,366/- [Rs.22769840 + ₹ 22404892) / 2] instead of the average total value of ₹ 97213312/- [(Rs.91741179 + ₹ 102685444) / 2] taken in the original assessment which resulted into escapement of income. There is no change of opinion by the AO while reope .....

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r in appeal before the Tribunal and submitted that the assessee has filed all the materials before the Assessing Officer during the original assessment proceedings under section 143(3) of the Act. The Assessing Officer, after accepting the details submitted by the assessee completed the assessment and thereafter formed opinion and reopened the assessment. The change of opinion is therefore, not permissible under law and he relied on the decision in the case of CIT v. Kelvinator India Ltd. 320 IT .....

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average value of the total assets and to rectify the mistake reopening was done and assessment was completed under section 143(3) r.w.s. 147 of the Act. We find that the Assessing Officer has committed a mistake and to rectify the mistake, he has issued notice under section 148 of the Act. In this case, the issue of reopening was done by the Assessing Officer under section 148 of the Act is justified for the reason that as per Explanation 2 (c) to section 148, where the income chargeable to tax .....

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elied on by the ld. Counsel for the assessee in the case of CIT v. Kelvinator India Ltd. (supra) has no application. In view of the above, the ground raised by the assessee is dismissed. 8. So far as merits of the case is concerned with regard to computation of disallowance, the ld. CIT(A) has observed as under: ...Regarding the computation of disallowance under Rule 8D(ii), the AO has already taken the figure of interest expenditure of ₹ 26,45,753/- in the original assessment for the purp .....

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ance of interest expenses for the purpose of computation of disallowance u/s 14A in the reassessment proceedings is not legally correct. The income escaped with respect to disallowance of expenditure u/s 14A to the extent of the arithmetic mistake committed in the original assessment was correctly done by the AO as per the law. Hence, the grounds of appeal filed by the appellant on this issue is rejected. 9. After carefully considering the facts and findings of the ld. CIT(A), we find that the l .....

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the ground raised by the assessee is dismissed. 10. In the assessment year 2010-11, the issue involved is relating to lease rental income. At the time of hearing, the ld. Counsel for the assessee has submitted that the issue of lease rental income is squarely covered against the assessee by the decision of the Hon ble Jurisdictional High Court in assessee s own case in T.C.(A) Nos. 124 to 130 of 2014 vide order dated 21.03.2014. In view of the above judgement of the Hon ble Jurisdictional High .....

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xpenses of ₹ 1,65,280/- u/s 14A read with 80 of the IT Rules. This issue was elaborately discussed by the AO from para 8 to para 8.5 of the assessment order. It was noticed by the AO that the appellant had admitted income from dividend to the extent of ₹ 5,38,000/- and has claimed entire dividend income as exempt income u/s 10(34) r.w.s. 115O of the IT Act. The AO had given adequate opportunity to the appellant as to why proportionate expenditure shall not be disallowed u/s 14A of th .....

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he AR of the appellant simply relied on the grounds of appeal without substantiating the details of the capital and reserves which were applied for making investments in relation to the exempt income. The AR of the appellant did not make a case submitting the evidences in support of its arguments and grounds of appeal except relying on the case laws cited in the grounds of appeal. However, I find from the details available in the record that the appellant has incurred huge expenditure in the for .....

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of Walfort Stock & Share Investment reported in 41 OTR 233. The Hon'ble ITAT, Chennai in the decision in the case of Siva Industries & Holding Ltd. vs. ACIT reported in 54 SOT 49 Chennai (2012) held that even in a year where no exempt income was earned or received by the assessee, the disallowance u/s 14A can be made. The Hon'ble ITAT Chennai while delivering the judgement, followed the judgement of the Delhi Special Bench reported in 121 ITD 318 in the case of Chem Invest ltd. .....

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