TMI Blog2017 (8) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 11220 of 2017 - - - Dated:- 9-8-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Petitioner : Mr B S Soparkar, Advocate For The Respondent : Mr Nitin K Mehta, Advocate ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner has challenged a notice dated 02.12.2016 seeking to reopen the petitioner's assessment for the assessment year 2010-11 which was originally framed after scrutiny. 2. Brief facts are as under. 3. Petitioner is a company registered under the Companies Act. Prior to amalgamation, the assessee was known as M/s.Rajshri Packagers Limited. M/s.Rajshri Packagers had filed return of income for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of raw material for its manufacturing utilization, it is not covered under provision of the Act. As such speculation loss was not adjustable from business income of assesseeu/s 73 of the Act.Faliure to do so resulted in escapement of taxable income of ₹ 12,02,50,000. Section 5 of the Act provides that the total income of a person for any previous year shall include all incomes from whatever sources derived, actually received or accrued or deemed to be received or accrued. Scrutiny of 3CD, B/s,P/L, Notes on accounts and computation of income revealed that assessee has received additional sales tax exemption of ₹ 29,70,00,000 from Karnataka Government. The assessee credited the amount as sales tax/VAT incentives and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant assessment year. Under the circumstances, the question of failure on part of the assessee to disclose truly and fully all material facts necessary for assessment, would assume significance. In this context, one may peruse the reasons recorded. The Assessing Officer has cited two reasons for reopening the assessment. First is that, in the return, the assessee had claimed a sum of ₹ 12.02 crores by way of expenditure which was, in fact, suffered by the assessee in course of trading of crude and refined edible oil on settlement basis. According to the Assessing Officer, this was not an allowable business expenditure but was a speculative loss and therefore not allowable under section 73 of the Act. The reason itself records that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersed a sum of ₹ 13.99 crores (rounded off) which the assessee had credited in the earlier years on provisional basis and the net amount of ₹ 15.70 crores (rounded off) was disclosed as an operating income during the year under consideration. The Assessing Officer had twofold objections. One was, the assessee could have already taken deduction in the earlier years on such sum of ₹ 13.99 crores and second that, in any case, since the income actually accrued during the present year, the entire amount should have been taken during such period. 7. We are not on the validity of the Assessing Officer's objections. We however cannot ignore the fact that all these observations and formation of belief by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an amended certificate of entitlement for additional amount of ₹ 297,000,000 (Total Exemption amount of ₹ 594,000,000/) Please find attached herewith copy of original certificate and revised certificate of entitlement issued by the Joint DirectorDepartment of industries and Commerce and Government of Karnataka vide Annexure3. During the year the assessee company accrued sales tax/VAT incentive of ₹ 297,000,000/based on amended certificate as written above and reversed an amount of ₹ 139,995,001/which was accrued on provisional basis in the A.Y.2007-08 and A.Y.2008-09. Please find attached herewith copy of relevant page of Audited Financial Statements of A.Y.2008-09 and A.Y.2007-08 vide Annexure4 On perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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