TMI Blog2018 (2) TMI 1531X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment. By the time petition was filed and this Court passed its first order on 4th September 2017 issuing notice and preventing the Assessing Officer from passing final order of assessment, he had already framed the assessment on 31st August 2017. Such facts and order of assessment were brought on record through amendment in which the order of assessment is also challenged. Principally on the ground of merger, the notice must be quashed. Without recording separate reasons, therefore, this petition is also required to be allowed. - Special Civil Application No. 16165 of 2017 - - - Dated:- 19-2-2018 - MR. AKIL KURESHI AND MR. B. N. KARIA, JJ. For The Petitioner : Mr TUSHAR HEMANI with Ms VAIBHAVI K PARIKH, Advocates F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 461892 374360 Total 13514077 37. [1] Any expenditure [not being expenditure of the nature described in Sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purpose of the business or profession shall be allowed in computing the income chargeable under the head Profits Gains of Business or Profession . [Explanation for the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had debited a sum of ₹ 3,74,360/= on account of land utilization. In fact, no such expenditure is incurred by the assessee but it is sort of depreciation on land. Under Income Tax Law, no depreciation is allowable on land. The assessee has claimed this item as an expenditure but it is a depreciation in disguise. It is to say that after using the land for solid waste management, this land will be of no use and therefore, a certain percentage of the cost of land is charged to profit and loss account as land utilization expenses. This is nothing but just depreciation. What is debited is part of cost of land which is capital expenditure and therefore, cannot be allowed as deduction u/s. 37 [1] of the Act. Hence, this expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the Assessing Officer desires to disallow through the process of reopening of assessment, which is not permissible. [ii] Counsel pointed out that to the extent the Assessing Officer's order was adverse to the assessee, the assessee had carried it in appeal. CIT [A] allowed the assessee s claim of deduction under Section 80IA [4] of the Act. By re-assessment, the Assessing Officer wishes to disturb such claim which would not be permissible on the principle of merger. [iii] Counsel lastly contended that in any case, the issue is revenue neutral. Even if the expenditure is disallowed, since the claim of deduction under Section 80IA [4] of the Act is granted, it would make no difference in so far as the assessee s ultimate tax liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of portion of land on which the cell is constructed and used for dumping of waste. Please explain why these should not be treated as capital expenditure. 24. Please furnish details and supporting material to establish the accuracy and genuineness of the major direct expenses and indirect expenses claimed comprising waste handling expenses, waste process expenses, EPC contract expenses, cell utilization expenses and corporate administration expenses. The assessee replied to such queries under a detailed communication dated 15th November 2015 and in addition to justifying the claim of expenditure, also pointed out that in the earlier orders, such claims were rejected by the Assessing Officer, but allowed by CIT [A]. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof. When the Commissioner [Appeals] was examining the assessee's grievance against the order of Assessing Officer disallowing the claim, it was open for the Revenue to point out to the Commissioner [Appeals] that even if in principle the claim is allowed, a part thereof would not stand the scrutiny of law. It was open for the Commissioner to examine such an issue, even suo motu. If we allow the claim in its entirety, the Assessing Officer thereafter cannot re-visit such a claim and seek to disallow part thereof. This would be contrary to the principle of merger statutorily provided and judicially recognized. Even after the Commissioner [Appeals] allow such a claim and the Revenue was of the opinion that he has not processed it and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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