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TMI Blog2019 (1) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner had claimed deductions under Sections 80IB and 80IC of the Act. 3. To reopen such assessment the Assessing Officer had issued impugned notice. In order to do so, he had recorded following reasons: "Reasons for reopening of the Assessment in the case of M/s Marico Limited for the A Y 201112 u/s 147 of the IT Act. 1) In this case, the assessee has filed its return of income on 25.11.2011 declaring total income of Rs. 69,95,70,781/ for A.Y. 201112, which was subsequently revised on the same day i.e. on 25.11.2011 at revised total income of Rs. 69,97,78,630/. Thereafter, a further revised return was filed on 29.03.2013 at revised total income of Rs. 69,28,57,599/. 2) The assessment for AY 201112 has been completed u/s 143(3) r.w.s. 144C(3) on 29.04.2015 determining income under normal provisions of the IT Act at Rs. 1040416024/(after allowing deduction fo Rs. 1,77,24,25,716/ under sections 80IB (4) and 80IC (2)) and book profit u/s 115JB at Rs. 356,05,24,496/and tax on book profit was determined at Rs. 70,96,30,335/ and tax was charged u/s 115JB. 3) On perusal of the records for the A Y 2011 12 the following issues w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; appended to the P & L account revealed that an amount of Rs. 40.90 crore was charged to the P & L account under the head miscellaneous expenses. This amount includes an amount of Rs. 1.00 crore being capital advance written off. Since, this being capital in nature, should have been disallowed. Capital advance won't get any deduction in income tax unless and until the payment made earlier has hit the profit and loss in earlier years as a sale/profit, no expense can be claimed. Therefore I have a reason to believe that the capital advance written of amounting to Rs. 1.00 crore has been escaped from the assessment of income. (iii) Verification of assessment records for the A.Y. 201112 revealed that Capital Gain brought to taxation is loss Rs. 39,32,873/ only. However, as per the Return of Income the 'a' had offered STCG of Rs. 39,32,873/ and LTCG of Rs. 8,00,00,000/. The LTCG was set off against brought forward long term capital loss. However, scrutiny of the assessment order for AY 2011 11 revealed that Capital Gains of Rs. 2,17,829/ ws taxed during that year and no carried forward of losses was available and hence not allowed in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income dated 29.03.2013. While computing income from business, an amount of Rs. 42,75,27,823/(schedule BP A3 of return of income) was reduced from net profit of Rs. 3745533349/ (schedule BP A 1 of return of income). This amount was reduced treating the same as income/ receipts credited to P & L account considered under other heads of income. However, scrutiny P & L account revealed that, net profit of Rs. 374.54 crore was arrived at on the basis of sales of Rs. 2347.85 crore (including excise duty of Rs. 0.98 crore) and other income of Rs. 25.17 crore totaling to Rs. 2372.04 crore and adding an amount of Rs. 65.47 crore under exceptional items. The exceptional items of Rs. 65.47 crore was on account of reversal of provision for excise duty of Rs. 29.35 crore, profit on divestment of "Sweekar" brand Rs. 50 crore and provision for impairment of "Finance" trademark Rs.()13.88 crore. The total expenditure debited to the P & L account amounted to Rs. 2062.97 crore. From the amounts credited to the P & L account, as stated above, it could be seen that other than Rs. 25.17 crore under other income, no other amount would qualify to be reduced from business income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued during the assessment proceedings and have noted that the assessee has not fully and truly disclosed material facts necessary for his assessment of the year under consideration thereby necessitating reopening u/s 147 of the Act. 7) In view of the above, I have reason to believe that income amounting to Rs. 117,12,38,929/ chargeable to tax has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts within the meaning of section 147 of the Incometax Act, 1961 for the A.Y. 201112. Hence, it is a fit case for issue of notice u/s 148 of the I.T.Act, 1961." 8) In the light of the above reasons you are requested to explain with proper documentary evidences as to why the above additions/ disallowances should not be made in your case. 9) Apart from the above during the course of these reassessment proceedings, an information has been received in your case that an amount of Rs. 6,94,64,809/ has been credited in the bank account of Shri K.G.Paraman during the F Y 201011. In response to the notice u/s 133(6) of the IT Act you have submitted that total amount of Rs. 8,79,24,950/ has been paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment. 6. As is well known, in an instance where the Assessing Officer exercises power of reassessment beyond the period of four years from the end of relevant assessment year, an essential requirement is that the escapement of income chargeable to tax is due to the failure on the part of the assessee to disclose truly and fully all material facts. This is part of Section 147 of the Act itself and is on number of occasions by various judgments of High Court and Supreme Court held to be mandatory prerequirement. In view of such settled law, it is not necessary to refer to any judgment. Revenue is unable to bring to our notice any aspect or element which did not form part of the record and on the basis of which from the reasons recorded, it can be culled out that the Assessing Officer had formed a belief that income chargeable to tax had escaped assessment. In clear terms therefore, there was no failure on the part of the assessee to disclose truly and fully all material facts. 7. Counsel for the revenue however submitted that one of the issues raised by the Assessing Officer is that the activity carried on by the assessee does not amount to manufacturing act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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