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2017 (2) TMI 337

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..... ₹ 2,36,18,612/- is allowed to be debited. Therefore, according to the Assessing Officer, his predecessor has wrongly allowed the entire amount of ₹ 2,36,18,612/- to be debited under the head “Interest and Finance charges”. In the reasons recorded, it is specifically observed by the Assessing Officer that, “..On observation of the assessment records,” meaning thereby, while issuing notice, the subsequent Assessing Officer did consider the material which was already on the record, which was considered by the Assessing Officer, while framing the scrutiny assessment under Section 143 of the Act. As observed hereinabove, even there is no allegation in the reasons recorded that there was any failure on the part of the assessee in .....

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..... It appears that in the original assessment, the assessee debited an amount of ₹ 2,36,18,612/- under the head Interest Finance charges on account of loan of ₹ 488.10 million. The assessee submitted that in order to expand business in U.S.A., the company has established a step-down subsidiary in the U.S.A., and therefore, the assessee claimed interest and finance charges incurred by the company as business expenditure . 3.2 The Assessing Officer, while framing the scrutiny assessment, accepted the claim of the assessee and treated the aforesaid expenditure towards interest and finance charges as business expenditure . That thereafter, beyond the period of four years from the relevant assessment year, the Assessing Office .....

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..... here was no failure on the part of the assessee in not disclosing the true and correct facts necessary for the assessment. It is submitted that the claim made by the assessee was as such considered by the Assessing Officer and only thereafter, the amount of expenditure incurred by the assessee towards interest and finance charges on account of loan of ₹ 488.10 million was treated as business expenditure and was accordingly allowed by the Assessing Officer. Therefore, it was submitted that as there was no failure on the part of the assessee in not disclosing true and correct facts, the assumption of jurisdiction by the Assessing Officer to reopen the assessment under Section 147 of the Act and that too, beyond the period of four year .....

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..... ns recorded, there is no allegation that there was any failure on the part of the assessee in not disclosing true and correct facts. It is submitted that whatever the claim was made by the assessee, while filing the return of income, the same was duly considered by the Assessing Officer while framing the scrutiny assessment. It is submitted that therefore merely because the subsequent Assessing Officer is of the opinion that his predecessor has wrongly granted the claim, that by itself cannot be a ground to reopen the assessment beyond the period of four years. 4.1 Making the above submissions and relying upon a decision of Division Bench of this Court in the case of Navkar Share Stock Brokers Private Limited v. Asstt. Commissioner of .....

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..... ilure on the part of the assessing in not disclosing the true and correct facts, which has resulted into escapement of the income, the Assessing Officer is not justified in reopening the assessment. 7.1 Considering the reasons recorded, there is no allegation that there was any failure on the part of the assessee in not disclosing the true and correct facts due to which, there is escapement of income from the assessment. 7.2 Moreover, from the reasons recorded, it appears that according to the Assessing Officer, the expenditure was incurred to establish a subsidiary in USA, and therefore, such expenditure was covered under Section 35D [1] (ii) of the I.T Act, and therefore, only 1/5th of the expenditure ie ., ₹ 47,23,722/- was .....

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