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2018 (4) TMI 748

was made in the return of income. The computation of income had a note appended on it, stating that though it is eligible for deduction under Section 80M of the Act, same was not being claimed as gross total income was nil. - AO passed an Assessment Order u/s 143(3) determining a positive income of ₹ 50.26 Crores, after having granted the benefit of deduction of ₹ 1.98 Crores as claimed under Section 80M of the Act. This was after having made enquiry during the Assessment Proceedings and the Petitioner justifying its claim for deduction of ₹ 1.98 Crores to the Assessing Officer as is evident from its letter dated 24th July, 1998. Thus, this is a clear case of change of opinion and the Assessing Officer could not have .....

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view of its loss return. 5. During the course of Assessment Proceedings, the Petitioner explained its claim of deduction under Section 80M of the Act, as is evident from the letter dated 24th January, 1998 addressed to the Assessing Officer. Thereafter, on 27th March, 1998, the Assessing Officer after applying his mind to all facts, including the claim for deduction, passed an order under Section 143(3) of the Act, determining the Petitioner's income at ₹ 50.27 Crores. This, after allowing deduction of ₹ 1.98 Crores as claimed under Chapter VIA of the Act. 6. Being aggrieved, the Appellant filed an appeal with regard to the issues (other than the claim for deduction under Chapter VIA of the Act) from the order dated 27th Mar .....

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other domestic companies ₹ 98,00,723/ ₹ 3,20,56,723/ ========= Though, the assesssee did not compute the eligible deduction u/s.80M, based on the computation adopted by it for A.Y. 199495, the eligible deduction as per the assesssee works out as under: i) On dividend received from UTI (@ 40% of gross dividend income) Rs.89,02,400/- 100% dividend received from other domestic companies Rs.98,00,723/ ₹ 1,87,03,123/ ========= However, the Assessing Officer allowed deduction at ₹ 1,98,05,010/. He did not discuss anything in the order regarding the eligible deduction while allowing deduction u/s. 80M. Thus, prima facie, the A.O. allowed excess deduction of ₹ 11,01,887/. The assessee incurred huge expenditure on perso .....

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from other domestic companies Rs.93,10,687/ Rs.1,77,67,967/ ========= In view of the above, it may be said that the Assessing Officer allowed excess deduction of ₹ 20,37,043/u/ s. 80M in the assessment order. The assessee went in appeal before the CIT(A) against the assessment order. The CIT(A) decided the appeal vide his order dtd. 26.03.1999. Order giving effect to the order of CIT(A) was passed on 31.03.1999 determining total income at ₹ 4,06,85,877/after allowing deduction of ₹ 1,98,05,010/u/ s.80M. As per the computation furnished above, the deduction is required to be reduced to ₹ 1,77,67,967/. In view of the above, I have reason to believe that income to the extent of at least ₹ 20,37,043/chargeable to t .....

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other basis is that the Petitioner had failed to reduce the cost (expenditure) incurred in earning the dividend income to the extent of 5% of the gross dividend income. This is a factual matter which was a subject matter of consideration while passing the order under Section 143(3) on 27th March, 1998. Thus, there was a full and true disclosure of the material facts by the Petitioner during the regular Assessment Proceedings of the deduction under Chapter VIA of the Act, being claimed by them. In fact, this was examined by the Assessing Officer as well as by the CIT(A) while granting deduction to arrive at the total income. 10. In the present facts, we find that the claim of the Petitioner for deduction under Section 80M of the Act was mad .....

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