TMI Blog2020 (10) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no dispute on the position that the alleged escapement of income, if any, is not attributable to non-disclosure of material particulars by the petitioner. The conditions precedent in the proviso to Section 147 are clearly not attracted in this case. The Supreme Court, in the case of ACIT vs ICICI Security Primary Dealership Ltd [ 2012 (8) TMI 754 - SC ORDER] considered the re-opening of an assessment beyond the period of four years confirming the quashing of the proceedings for re-assessment on the ground that there was a full disclosure of all material particulars in the return of income filed by the assessee. So too in this case. Order re-opening the assessment was not maintainable. - Decided in favour of assessee. - W.P. No.1212 & 1216 of 2020, WMP.No.1477 of 2020 - - - Dated:- 8-10-2020 - Honourable Dr. Justice Anita Sumanth For the Petitioner : Mr.Ragavan Ramabadran For the Respondents : Mrs.Hema Muralikrishnan, Senior Standing Counsel ORDER The petitioner has filed these two writ petitions, one challenging order dated 23.12.2019 rejecting the objections of the petitioner to the jurisdiction assumed by the respondent for proceedings in conn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income in time and therefore, the first two conditions are not attracted. The only issue to be examined is whether the alleged escapement of income, if any, is attributable to failure on account of the assessee/petitioner to have made a full and true in disclosure of income in that regard. For this purpose, one would have to examine the reasons on the basis of which jurisdiction has been assumed, and test the same in the light of the enquiry conducted and the responses filed by the petitioner prior to the framing of the original scrutiny assessment. 5. Each issue in the reasons for re-assessment dated 08.03.2019 is extracted with the comparative position as regards the disclosure made by the petitioner at the time of original assessment, in seriatim, as under: Issue 1 In the assessment order disallowance u/s 14A of ₹ 40,70,957 was made as per Rule 8D. The working is as under: Rule 8D(ii) : 6,37,586 Rule 8D(iii) : 34,33,371 40,70,957 It is seen that assessee has already disallowed sum of ₹ 81,43,316 being man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal services 3,30,900 26,83,900 Total 2,75,30,900 9. The third issue and analysis thereof are as under: Issue 3 Col. 16(b) of Form 3CD Audit report read with Ann shows that sum of ₹ 49,412 collected from employees as PF contribution were not paid before the respective due dates. Employee s contribution to PF/ESI received by the employer is income in his hands as per sec. 2(24)(x). It is deductible only if paid within the due date as per the respective Act as specified in sec. 36(1)(va). The provisions of sec. 43B which is applicable in respect of employer s contribution is quite different than the provisions of sec. 36(1)(va). The Excess deduction granted of ₹ 49,412 has to be disallowed 10. Details of provident fund contribution were sought under notice dated 23.07.2014 by the Assessing Officer and have been supplied as a part of the Form 3CD at column No. 16 and the annexure thereto reading as under: 16(1) Any sum paid to an employee as bonus or commission for services rendered, where such sum was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sec. 135 of the Companies Act, 2013 which was not in operation during the previous year. Mere fact that indirectly assessee earned goodwill of the general public does not imply that the expenditure was incurred for business purposes and such expenditure is not deductible u/s 37. Excess deduction granted of ₹ 1,09,51,936/- has to be disallowed 14. Bike event expenses were sought under cover of communication dated 26.12.2014 and supplied vide reply dated 06.01.2015 as follows: ... During the previous year, we amended the object Clause in the Memorandum of the Company to include Bike Event . It is a CSR activity involving the conduct of an Annual Training Camp to provide skills aimed at training motored two wheeler rides on safe and skilled riding on road and respect for traffic rules. Additionally, the program helps identify talented youngsters who can potentially be trained for representation in the arena of Motor Sports. Amount spent on this event has been booked under Bike Event Expenses . 15. Issue 6 and explanation thereto are extracted below: Issue 6 Sum of ₹ 2,84,73,639 is debited to the P L a/c under the head Employee benefit expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised by the officer even at that juncture and the petitioner has, admittedly, furnished explanations and details in response thereto. The reasons for re-assessment themselves fairly reveal that the assumption of jurisdiction is only based on materials already available on record and no new, tangible materials have been culled thereafter. There is no dispute on the position that the alleged escapement of income, if any, is not attributable to non-disclosure of material particulars by the petitioner. The conditions precedent in the proviso to Section 147 are clearly not attracted in this case. 20. The Supreme Court, in the case of ACIT vs ICICI Security Primary Dealership Ltd (348 ITR 299) considered the re-opening of an assessment beyond the period of four years confirming the quashing of the proceedings for re-assessment on the ground that there was a full disclosure of all material particulars in the return of income filed by the assessee. So too in this case. The Bench states thus: 'The assessee had disclosed full details in the Return of Income in the matter of its dealing in stocks and shares. According to the assessee, the loss incurred was a business loss, where ..... X X X X Extracts X X X X X X X X Extracts X X X X
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