TMI Blog2020 (2) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, when he has taken the consequence of the revised return and pass assessment order. His failure to issue notice u/s 143(2) of the Act while framing the assessment on the basis of revised return, is bad in law and it cannot be sustained. Accordingly, we quash the assessment order. Appeal filed by the assessee is allowed. - ITA No.1044/Bang/2018 - - - Dated:- 26-2-2020 - Shri Chandra Poojari, AM And Smt.Beena Pillai, JM For the Appellant : Sri. B.S.Balachandran, Advocate For the Respondent : Sri.Manjeet Singh, Addl.CIT-DR ORDER PER CHANDRA POOJARI, AM : This appeal by the assessee is directed against the order of the CIT(A) dated 29.12.2017. The relevant assessment year is 2012-2013. 2. The assessee has raised following grounds:- 1. The impugned assessment order as well as the order of the CIT(A) is opposed to the facts of the case and law, and therefore, they are liable to be set aside and cancelled. 2. The learned AO as well as the learned CIT(A) has failed to appreciate that section 14A is not applicable to the strategic investment made in subsidiary companies out of surplus funds. 3. The learned AO erred in not excludi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012-2013 on 30.09.2012 by declaring a taxable income of ₹ 7,05,85,430 after claiming deduction u/s 10AA of the Act at ₹ 208,49,19,699, towards profits from SEZ Unit of the assessee. The assessee, as a business strategy, has made TRADE (BUSINESS) INVESTMENTS in 100% subsidiaries in India and in various countries to an extent of ₹ 381,66,46,423. During the course of assessment proceedings, the Assessing Officer has made certain disallowance, as follow:- Sl. No. Item disallowed Amount of disallowance Ground of disallowance 1. Deduction of profits and gains derived from SEZ Unit u/s 10AA 28,07,038 Excess deduction claimed u/s 10AA. 2. Expenditure incurred in relation to income not includible in total income 3,74,01,344 Expenditure disallowed u/s 14A in accordance with Rule 8D of the Act. 3. Taxing under MAT provisions of section 115JB not applicable to SEZ units. Appellant s contention disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though Income Tax Provisions are applicable on individual Companies. Where in cast of Non Trade Investments, the cost of investment remain same both in the Standalone Accounts as well as Consolidated Accounts. The Assessing Officer has made disallowance u/s 14A of the amount of expenditure incurred in relation to dividend income is determined in accordance with Rule 80 and ₹ 3,74,01,344/, being 0.5% of the average value of investment is disallowed and added back as income of the appellant. Further submitted that investments made in the group companies is a 'Business Strategy' and not with an intention to earn dividends and also these investments amounts to Trade Investments which are different from Non Trade Investments which are made out of surplus/idle funds to earn some additional income to enhance the profitability like investments in listed company shares, mutual funds etc . Further, the appellant company is engaged in the business of manufacturing of electronic medical equipments/devices and filed Return of Income for the Assessment year 2012-13 on 30/09/2012 by declaring a taxable income of ₹ 7,05,85,430/- after claiming a Deduction of ₹ 208,49 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taken for the first time before the Tribunal and due to inadvertent and non-availability of order sheet entry pertaining to the assessment year 2012-2013, the assessee was not able to raise this ground on earlier occasion. This was furnished to the assessee on filing RTI application on 03rd May, 2019 by the A.O. It is thus filed consequent to the RTI application filed by the assessee on 03.05.2019. Accordingly, the learned AR prayed that this additional ground may be admitted and adjudicated as it goes to the root of the matter. The learned Departmental Representative did not seriously object to the admission of additional ground. 8. We have heard the rival submissions and perused the material on record. As rightly pointed out by the learned AR, the additional ground raised by the assessee is for the first time before the Tribunal, which goes to the root of the matter. Further, it being a legal issue and also the assessee has explained with good and sufficient reason that the assessee was prevented from raising this ground on earlier occasion. Accordingly, this additional ground is admitted for adjudication by placing the reliance of the Hon ble Supreme Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Machine Tool Corporation of India Ltd (1993) 201 ITR 101 (Kar) - The Hon'ble High Court Held that once a revised return u/s 139(5) filed, the original return is substituted by the revised return. Consequently, the entries in the relevant column of the original return seeking depreciation, cannot be used for any purpose. It is therefore, not open for the ITO to advert to the original returns or the statement filed along with it for the purpose of allowing deduction after such claim is expressly withdrawn in the revised return. The matter was takenup before the Hon'ble Supreme Court in SLP and the Hon'ble Court was pleased to dismiss the same in its corn!)in2c1 order in the lead case in Mahendra Mills in (2000) 109 taxmann.com 225 (SC). (2) M/s Mangalore Chemicals and Fertilizers Ltd., (1991) 191 ITR 156 (Kar) - The Hon'ble High Court held that once a valid revised return is filed by the assessee, it completely effaces and obliterates the original return and therefore, it is only the revised return that has to be taken into account for purpose of making assessment. 9.2 It is further submitted by the learned AR that there is no dispute that a valid revised return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no Notice issued u/s 148 after the date on which the assessee filed the return of income by reiterating the return filed u/s 139 as the return u/s 148. It is submitted that there was no issue/service of Notice u/s 143(2) after the filing of the revised return of income u/s 139(5) on 17.03.2014. As per the information provided under the RTI Act, it is clear that the Notice u/s 143(2) was not issued at all on the basis and subsequent to filing of the revised return of income on 17.03.2014. 10. We have heard the rival submissions and perused the material on record. Originally the assessee filed the return of income on 30.09.2012 declaring total income at ₹ 7,05,85,430. Consequent to this, the A.O. issued notice u/s 143(2) of the Act on 14.08.2013. Later, the assessee filed revised return of income on 17.03.2014 by admitting the same income. The Assessing Officer computed the income by stating as follows:- Income as per revised return of income ₹ 7,05,85,430. 10.1 The revised return filed by the assessee is within the stipulated time provided u/s 139(5) of the Act. Though the A.O. considered the revised return of income, which is stated in the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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