TMI Blog2020 (3) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... s.147 dated 18.03.2013, the A.O., inter alia made disallowance of ₹ .2,23,92,916/- towards interest and finance charges and waiver of principal component under O.T.S Scheme. Reason for reopening the assessment was for assessing the expenditure claimed at ₹ 3,83,62,305/- and not to consider the waiver of principal component under O.T.S Scheme. Since notice under Section 147 was issued within four years from the end of the relevant assessment year, in the absence of any material/evidence from the assessee s side that the issues on which reopening was made was already examined and considered by the A.O., it is not possible to hold that re-opening of the assessment was invalid. Therefore, corresponding grounds of assessee fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the period relevant to assessment year, why and how the assessee has incurred the impugned interest and finance charges whether such expenditure was connected to its business or other sources of income, whether if the interest and finance charges were paid during the year, whether it is allowable under Sections 28 to 43 of the Act or under the head other sources etc., and then decide the issues in accordance with law. The assessee shall place relevant materials in support of its contentions before the A.O. and comply with the requirements of the A.O. in accordance with law. The A.O. is also free to conduct appropriate enquiry as deemed fit. The A.O. after affording effective opportunity to the assessee shall decide the matter on merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal. Against the orders of the learned CIT(A), the assessee filed this appeal. 3. The Ld. A.R. submitted that the Ld CIT(A) failed to appreciate the following facts and circumstances: i) When assessee s appeal against the original order passed under Section 143(3) of the Act was pending before the learned CIT(A), the A.O. sent a proposal to enhance the income by adding principal component of loan waiver obtained by the assessee under one-time settlement. This issue was considered by learned CIT(A) and placing reliance on the decision of Hon ble Bombay High Court in the case of Mahindra Mahindra Ltd. Vs. C.I.T reported in 281 ITR 501(Bom.), learned CIT(A) held that the amount of remission of the principal amount due to O.T.S cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than for maintenance. The Ld. A.R. further submitted that in order to enable the company to maintain and upkeep its own machineries, expenditure has to be incurred on labour, maintenance consumables power etc., to keep the infrastructure. In fact, the interest income earned is on account of deposits made consequent to business activity as the company was required to make deposits with banks as mandated by customs and excise Departments and the income earned out of that is assessable as business income only. The assessee has carried out various activities which assessee required to upkeep the business infrastructure and maintain the business sustainability even if not in the relevant year but in the future years. Therefore, the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifying certain mistakes in the order. In response to the notice, the assessee filed various details vide its letter dated 18.03.2011. After considering the representations submitted by the assessee, an order under Section.154 was passed disallowing certain expenditure and adjustments of carry forward was made which resulted in income being assessed under Section 115JB only. Against that order, the assessee filed an appeal before the learned CIT(A). The learned CIT(A) dismissed the appeal in I.T.A. No. No.350/13-14 dated 31.01.2014. Aggrieved against that order, Revenue filed appeal before the Tribunal. The Tribunal vide order dated 25.05.2016 in I.T.A. No. No.1155/Mds/2014 dismissed the appeal of Revenue. Therefore,, the Ld. A.R. submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the assessee s side that the issues on which reopening was made was already examined and considered by the A.O., it is not possible to hold that re-opening of the assessment was invalid. Therefore, corresponding grounds of assessee fail. However, there is merit in the assessee s plea that in the re-assessment made the A.O. should not have made addition towards waiver of principal component under O.T.S Scheme, which was originally proposed by the A.O for an enhancement before the learned CIT(A) against the original assessment order, which was duly considered by the learned CIT(A) and rejected it in his order, which was ultimately sustained by the ITAT. Therefore,, the A.O. should not have once again added such sum in this re-assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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