TMI Blog2004 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... dated September 23, 2002, issued under section 148 of the Act holding it to be without jurisdiction. - Writ Petition No. 1504 of 2003 - - - Dated:- 25-2-2004 - Judge(s) : V. C. DAGA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by V.C. Daga J.- Rule, returnable forthwith. By consent of the parties, rule is taken up for final hearing. This petition was heard by us along with another writ petition bearing No.1505 of 2003 (Hindustan Lever Ltd. v. R. B. Wadkar, Asst. CIT (No.1) [2004] 268 ITR 332 (Bom), wherein notice under section 148 of the Income-tax Act, 1961 ("the Act" for short), dated November 5, 2002, for reopening the assessment for the assessment year 1996-97 was the subject-matter of challenge. That p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was attributable to the current assets of the erstwhile Brooke Bond Lipton India Ltd. that stood transferred to the petitioner was treated as revenue expenditure and the balance of Rs.7,22,81,820 was capitalised and was treated as increase in the cost of the fixed assets for the purposes of claiming depreciation. A specific note was inserted to say that the stamp duty paid related to acquisition of all assets movable as well as immovable, which were conveyed to the company and the same had to be allocated and the allocation was done based on the book value of the assets as disclosed in the audited balance-sheet of the erstwhile Broke Bond Lipton India Ltd. as on December 31,1995. The covering letter which accompanied the return also made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 dated September 23, 2002, which was received by the petitioner on October 17, 2002. In the said notice it was stated that respondent No.1 had reason to believe that the petitioner's income which was assessable to tax for the assessment year 1997-98 had escaped assessment within the meaning of section 147 of the Act and, therefore, he called upon the petitioner to file a return of income within thirty days from the date of service of the notice. It is also stated that the notice was issued after obtaining the necessary satisfaction of respondent No.3. The petitioner by its letter dated November 5, 2002, requested respondent No.1 to furnish the reasons recorded by him prior to the issuance of the impugned notice so as to enable the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers expenditure incurred ought to be disallowed. He has also referred to a decision of the Calcutta High Court; wherein it was held that stamp duty, registration charges, etc., incurred in taking over another concern is capital expenditure. The petitioner by their letter dated December 9, 2002, addressed to respondent No.2 asked for some time to file reply and reiterated its request that the reasons recorded prior to the issuance of the impugned notice be furnished to it. In spite of the repeated requests, the respondents did not furnish reasons, if any, alleged to have been recorded by respondent No 1 prior to the issuance of the impugned notice. Hence, the petitioner filed this petition under article 226 of the Constitution of India to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was capital expenditure. In the light of the foregoing discussion, it is apparent that treating of the amount of Rs.16.67 crores of stamp duty as revenue expenditure was erroneous and the same resulted in underassessment of income in the assessment completed under section 143(3) on February 29, 2000. In view of these facts and circumstances, I have reason to believe that income chargeable to tax has escaped assessment within the meaning of the provisions of section 147 of the Income-tax Act. It may also be mentioned that an order under section 263 was passed by the Commissioner of Income-tax-I on March 26, 2002, in regard to the issues like valuation of closing stock and recomputation of deduction under section 80HHC. Thus, remedial actio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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