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TMI Blog2020 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... so filed claiming TDS of Rs. 7,77,82,646/-. The return was processed and assessment order u/s 143 (3) of the Act was passed assessing the total income of the assessee at Rs. 101,44,81,685/-. The assessee challenged the assessment order before the Ld. CIT (A). The Ld. CIT (A) after hearing the assessee granted partial relief in respect of the TDS claim. 2. Subsequently, the case was reopened u/s 147 of the Act by issuing notice u/s 148. In response to the notice u/s 148, the assessee asked for reasons for reopening of assessment and further requested to treat the original return and revised return filed by the assessee as the return filed in response to notice u/s 148 r.w.s. 147 of the Act. Accordingly, the AO supplied the reasons recorded for reopening. The AO thereafter asked the assessee to file factual objections, the assessee submitted that it has already submitted objections vide letter dated 29.10.2010/01.11.2010 and further submitted that it did not file any separate objection under the bona fide belief that the proceedings have been dropped in view of the submissions made earlier. However, the assessee further placed on record a Compact Disc (CD) containing details of pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the expenses Rs. 10.88 crore were incurred on account of rent to take the premises on lease which were subsequently let out to the employees from whom income by way of house rent was earned. Ground No. 4: Adjustment to calculate Turnover: On the Facts and circumstances of the case and as per provisions of law the CIT (A) erred in confirming the A.Os action of adjustment the turnover by reducing sundry receipts Rs. 11.76 crores and profit on sale of ships of Rs. 173.80 crore from turnover to calculate excess over 0.25% of turnover. Ground no. 5: Disallowance of expenses: 5.1 On the facts and circumstances of the case and as per provisions of law, interest income of Rs. 80.23 crore and dividend income Rs. 3.71 crore constituted profits from core activities and therefore could not be assessed to tax. 5.2 In the alternative and without prejudice to the above, assuming without admitting that interest and dividend income is assessable to tax, then deduction ought to have been allowed in respect of proportionate expenditure incurred by the appellant. 5.3 The CIT (A) ought to have held that since incidental income in excess of 0.25% of the turnover from core activities was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eads expenses, sundry receipts, prior period income, sundry credit balance written back, excess provision written back and allocation of administrative expenses. The Ld. counsel further submitted that the reasons as recorded by the AO show that the same were based on the material on record and there was no tangible material to form a belief that the assessment has escaped income of the assessee. The Ld. counsel relying on the judgment of the Hon'ble Supreme Court in the case of CIT vs. Kelvinator India Ltd. 320 ITR 561 (SC), the judgments of the Hon'ble Bombay High Court in the case of CIT vs. Jet Speed Audio P. Ltd. 372 ITR (Bom), Idea Cellular Ltd. vs. DCIT 301 ITR 407 and Asian Paints Ltd. vs. DCIT 308 ITR 195, and the decision of the Mumbai Bench of the Tribunal in the assessee's own case, ITA No. 2551 and 2129/Mum/2012 for the AY 2006-07 submitted that since the action of the AO of reopening the assessment is bad in law, the Ld. CIT (A) ought to have set aside the order passed by the AO. The Ld. counsel accordingly submitted that in view of the aforesaid facts and in the light of the judgments of the Hon'ble High Court, the proceedings initiated u/s 147 r.w.s. 148 of the Act m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s income in its books of accounts. Since, all these incomes are from the assessment years before tonnage tax scheme, assessee should have included the same under normal provisions of the I.T. Act, 1961. However, assessee failed to disclose these facts in its return of income and also during the assessment proceedings u/s 143 (2). 4. It is also seen that assessee has allocated administrative expenses of Rs. 316 lakhs towards income from other sources. U/s 57 (iii) of the I.T. Act, only expenses wholly and exclusively expended towards earning of income from other sources is allowed as deduction. Assessee has interest income from suplus funds parked with banks/institutions and dividend income under the head income from other sources'. Since, there cannot be any cost wholly and exclusively expended towards earning this income, assessee was liable to disclose this fact during the assessment proceedings u/s 143 (2) and should have added back the amount while computing the total income. 5. Due to the above mentioned reasons, there has been a failure on part of assessee to disclose the facts fully and truly necessary for its assessment. The above mentioned facts have given rise t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I claims, sundries core shipping, contribution for employees new PRMS, Steamer stall rent, course fees MTI, consultancy charges from govt. agencies, profit on Bar plus shop sales, house rent ownerships flats, rent on furniture and companies bus services etc. the said receipts except course fees MTI and consultancy charges form Govt. agencies have been regarded as income from shipping activities. Similarly, the assessee has furnished the details regarding prior period income sundry credit balance written back and excess provision written back, the copies of which are available in the paper book. So far as the allocation of administrative expenses is concerned, the AO vide notice dated 08.10.2007 and 27.11.2007 has made enquiries with respect to such apportionment. In response to the said letters, the assessee submitted written reply dated 25.10.2007, 07.11.2007 and 28.11.2007 (copies of which are available in the paper book). Further, the assessee was specifically asked to identify the core activities and substantiate to turnover with respect to the access the income from incidental activity over 0.25% of the turnover from core shipping activity. The detail explanation to the quer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 287 (SC), where a Bench of two learned judges of this court observed that a case where income had escaped assessment due to the oversight, inadvertence or mistake of the Income-tax Officer must fall within section 34 (1) (b) of the Indian Income Tax Act, 1922. It appears to us, with respect that the proposition is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on reappraising the material considered by him during the original assessment, the Income Tax Officer discovers that he has committed an error in consequence of which income has escaped assessment, it is open to him to reopen the assessment. In our opinion, an error discovered on a reconsideration of the same material (and no more) does not give him that power. That was the view taken by this court in Maharaj Kumar Kamal Singh v. Cit [ 1959] 35 ITR 1 (SC), CIT v. A. Raman and Co. [ 1968] 67 ITR 11 (SC) and Bankipur Club Ltd. v. CIT [ 1971] 82 ITR 831 (SC) and we do not believe that the law has since taken a different course. Any observations in Kalyanji Mavji and Co. v. CIT [ 1976] 102 ITR 287 (SC) suggesting the contrary do not, we say with respect, lay down t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the above, in our opinion, none of the three decisions are applicable in the present case. 14 In view fo the above, question (A) and (B) as raised by the Revenue for our consideration do not give rise to any substantial questions of law as the findings of the Tribunal that there has been a change of opinion in issuing the impugned notice, is a finding based on the facts and the same has not been shown to be perverse. Accordingly, questions (A) and (B) are dismissed." 11. As pointed out by the Ld. counsel the coordinate Bench has quashed the assessment order passed u/s 147 of the Act in assessee's appeal ITA No. 2551/Mum/2012 for the AY 2006-07 holding that the proceedings u/s 147 of the Act was based on the change of opinion on the same set of documents which were available during the original assessment proceedings u/s 143 (3) of the Act. In the said case also, the Tribunal has held that the details were available with the AO. 12. In the light of the facts and circumstances of the case and on the basis of the material on record it can be concluded that in the present case, the AO has formed his belief on the basis of material already available on record which amounts to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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