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2018 (2) TMI 977

Reopening of assessment - three items of income have escaped assessment - validity of reasons to believe - Held that:- A perusal of the reasons to believe reveals that the records on the basis of reasons for re-opening were recorded were available before the AO even at the time of original assessment proceedings as is apparent from the statement of computation of total income placed at page 1 of the paper book and also fortified by the discussions by the AO himself in the original assessment order passed under Section 143(3) r.w.s. 153A dated 22.12.2008 of the original assessment order. Thus we find that the AO has recorded the reasons on re-examination of the same records/information which were available at the time of framing the original assessment passed under Section 143(3) r.w.s. 153A of the Act. - A review by the AO of his own order is not permissible under the Act as decided by the Hon'ble Supreme Court in the case of Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) - Decided in favour of assessee - ITA Nos. 2512 And 2513/Mum/2014 - Dated:- 13-2-2018 - Shri D.T. Garasia, Judicial Member And Shri Rajesh Kumar, Accountant Member For The Appellant : Shr .....

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rovisions for gratuity shown in Schedule - U of P & L account at ₹ 1,62,10,000/-, however, the disallowance of ₹ 1,58,18,347/- only was made to the total income. The balance amount of ₹ 3,91,653/- need to be disallowed. In response to the notice issued under Section 148 of the Act the assessee filed return of income on 27.04.2011 declaring total income at ₹ 14,51,63,125/-. Subsequently notices under Sections 143(2) and 142(1) were issued and served upon the assessee. As regards income escaped of ₹ 31,37,000/-, the AO observed from the details filed by the assessee that the said amount was shown under the head manufacturing the other expenses as charity and donation which did not pertain to the business of the assessee and therefore not incurred for the purpose of business and accordingly was disallowed. As regards ₹ 1,80,437/- the AO noted that the said expenses were not allowable as per tax audit report. However, the assessee did not disallow these expenses suo motto in the computation of income. After confronting the issue with the assessee, the AO added the same under Section 40(a)(ia) of the Act on the ground that the assessee did not obj .....

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therefore, there should be a conclusion that the authority has applied his mind to the same and there was no question of the Commissioner interfering by taking a different view, etc. The assessing authority performs a quasi-judicial function and the reasons for his conclusions and findings should be forthcoming in the assessment order. Though it is urged on behalf of the assessee by its learned counsel that reasons should be spelt out only in a situation where the assessing authority passes an order against the assessee or adverse to the interests of the assessee and no need for the assessing authority to spell out reasons when the order is accepting the claim of the assessee and the learned counsel submit that this is the legal position on authority, we are afraid that to accept a submission of this nature would be to give a free hand to the assessing authority, just to pass orders without reasoning and to spell out reasons only in a situation where the finding is to be against the assessee or any claim put forth by the assessee is denied. We are of the clear opinion that there cannot be any dichotomy of this nature as every conclusion and finding by the assessing authority should .....

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Act. The learned A.R. took us to the statement of computation of total business income, copy of which is available at page 1 of the paper book, which clearly showed that the assessee has made disallowance on account of gratuity of ₹ 1,58,18,347/-, statutory disallowance under Section 43B of ₹ 1,11,44,023/- and charity and donations of ₹ 15,84,648/-. The learned A.R. further referred to para 4 of the assessment order passed under Section 143(3) r.w.s. 153A dated 22.12.2008 wherein the AO has mentioned that details of purchase, details of major expenses, details of addition to fixed assets, confirmations from new depositors, details of TDS made and details of flats sold were called for examination. The learned A.R. drew our attention to para 27 of the said assessment order which is placed at page 16 of the paper book which commenced with the words On verification of computation income, it is seen that ...... which shows that the AO has examined the statement of total income in the original assessment proceedings and in para 31 at page 17 of the paper book the AO further stated that an amount of ₹ 1,11,44,023/- was outstanding under Section 43B of the Act on th .....

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proceedings as is apparent from the statement of computation of total income placed at page 1 of the paper book and also fortified by the discussions by the AO himself in the original assessment order passed under Section 143(3) r.w.s. 153A of the Act dated 22.12.2008 in paras 4, 6, 27 and 31 of the original assessment order, a copy of which is placed in the record at pages 3 to 18 of the paper book. Thus we find that the AO has recorded the reasons on re-examination of the same records/information which were available at the time of framing the original assessment passed under Section 143(3) r.w.s. 153A of the Act as referred to above. After examination of the facts in totality we are of the considered view that a review by the AO of his own order is not permissible under the Act as decided by the Hon'ble Supreme Court in the case of Kelvinator of India Ltd. (supra) and various other decisions. The decision relied upon by the Revenue in the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra) and Raymond Woollen Mills Ltd. (supra) do not come to the rescue of the Revenue as the same were distinguishable on facts and not applicable to the present case. In the case of .....

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