TMI Blog2018 (2) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer during the original assessment to the satisfaction of the present Assessing Officer, nevertheless, same cannot be a ground for reopening of the assessment which was previously framed after scrutiny. - Decided in favour of assessee. - Special Civil Application No. 15865 of 2016 - - - Dated:- 5-2-2018 - MR. AKIL KURESHI AND MR. B.N. KARIA, JJ. For The Petitioner : MR JP SHAH SR COUNSEL WITH MR MANISH J SHAH, ADVOCATE For The Respondent : MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner has challenged a notice dated 9.3.2016 issued by respondent no.2 Assessing Officer seeking to reopen the petitioner's assessment for the assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audit in the prescribed form No. 10CCB duly signed and verified by a Chartered Accountant which shall accompany the profit loss account and balance sheet of the eligible undertaking as if the undertaking were a distinct entity. In the case of CIT V/s. Shivanand Electronics (209 ITR 63) (Bombay) it was held that no duty is cast on the Assessing Officer to ask an assessee who has failed to file the audit report before rejecting his claim for relief. 4. On verification of the records, it is seen that the assessee has not submitted separate profit loss accounts and balance sheet of the undertaking relevant to the Assessment Year for which the deduction u/.s 801A has been claimed. In absence of separate profit loss account and balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent / administrative expenses etc have not been distributed between both the business, so as to arrive correct profit of the business of each of the undertaking. II. Since, these expenditure have not been distributed between two business, the profit in windmill division has artificially gone up. Hence, the common expenses in nature of administrative expenses and financial charges need to be allocated between both lines of business in order to arrive at correct profit of each of the business. Since, one line of business is of electronic appliances which involve both trading and manufacturing concern the ratio of turnover only cannot be considered owing to the differences in the basic character of both the business. The following common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing : * Profit ratio of these divisions. * Gross asset ratio of these divisions. A. Calculation of profit ratio : Total Business Income Income from windmills % windmills income to total business income 6020.56 lacs 815.03 lacs 13.52% B. Calculation of gross asset ratio : Total assets value Windmills assets value % windmills assets to total assets 232,61,05,853 12,33,45,11,42 4 53.07% C. Average A and B above (33.296%) D. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppress the profit from such division and resultantly, deduction under section 80IA of the Act had to be adjusted accordingly. 4. The petitioner raised detailed objections to the notice of reopening under communication dated 14.7.2016. Such objections were however rejected by order dated 21.7.2016. Hence this petition. 5. Learned counsel for the petitioners raised the following four contentions : 1) The entire issue of deduction under section 80IA of the Act was scrutinized during the original assessment. Any attempt on part of the Assessing Officer to disallow the claim would be based on change of opinion. 2) To the extent the Assessing Officer had disallowed the claim, the assessee had carried the matter in appeal before the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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