TMI Blog2024 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... of deductions claimed u/s 35 of the Act with supporting documents. Another communication was received by Petitioner u/s 142(1) calling upon Petitioner to provide data in the format prescribed for deduction claimed u/s 80IC details of products manufactured at 80IC Units and details of products sold from these Units, item-wise details of direct expenses which has been considered for allocation to 80IC Units, details of claim u/s 35 along with DSIR certificate of expense in Form 3CL and any other certificate obtained or required to be obtained in this regard, details of R D activity being carried on in respect of which deduction has been claimed and details of expenditure in CSR for which deduction u/s 80G has been claimed. Petitioner through its Chartered Account s letter gave data in connection with deductions claimed. In the assessment order it is accepted that questionnaire along with two notices u/s 142(1) were issued and the further details were called for from time to time during the course of assessment proceedings and Petitioner from time to time furnished the details called for. In the assessment order, the AO has also dealt with Petitioner s claim for deduction und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the total taxable income of Rs. 51,63,85,46,552/-. 2. It is found from the return and the details available on record that, the assessee s income chargeable to tax has been under-assessed on account of following issues: 2.1 Claim of provisions against unascertained liabilities: The assessee claimed year end provisions for Press Including production, and Television under sub-head Advertising and Publicity for Rs. 38,26,02,038/- and Rs. 16,24,90,310/- respectively and Export Markets under sub-head Advertising expenses for Rs. 34,66,34,334/- under the head Advertisement of Note 24 of Other Expenses. This provision of Rs. 89,17,26,682/- was made against the unascertained liability which is contingent in nature. Hence, the provision of Rs. 89,17,26,682/- was not an allowable expense which is required to be disallowed. 2.2 Claim of excessive deduction u/s. 35(2AB) of the Act: The assessee in their computation claimed Rs. 6,38,97,55,364/- as deduction u/s 35(2AB) in respect of scientific research as revenue expenditure. The tax auditor in Form 3CD qualified that amount allowable is Rs. 6,38,97,55,364/- u/s 35(2AB) and that amount was claimed and accordingly debited to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion expenses Publicity material printing expenses and Internet and Telecommunication shown under head Advertisement and Publicity of Annexure 7 are common in nature. Hence, these amounts should be taken for computation of apportionment of expenditure. Details of the item wise expenses are as under:- Press incl production Rs. 91,66,29,505/- Television Rs. 90,01,42,033/- Hoarding incl production Rs .7,73,20,010/- Misc. Production expenses Rs. 39,53,19,715/- Publicity material printing expenses Rs. 1,83,64,734/- Internet and Telecommunication Rs.8,29,74,459/- Total Rs. 239,07,50,456/- Total amount of Rs. 253,74,56,609/- (Rs. 14,67,06,153/- + Rs. 2,39,07,50,456/-) should be added to the balance amount of Rs. 759,70,58,532/- for computation of allocable expenses. Thus the actual common expenses works out to Rs. 1013,45,15,141/- as against Rs. 759,70,58,532/- worked out in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scapement of income have been considered during the assessment proceedings. In the first notice dated 26th August 2019 that Assessee received under Section 142(1) of the Act, Petitioner was called upon to furnish deduction claimed under Chapter VIA with documentary evidences and also details of deductions claimed under Section 35 of the Act with supporting documents. Another communication dated 14th November 2019 was received by Petitioner under Section 142(1) of the Act calling upon Petitioner to provide data in the format prescribed for deduction claimed under Section 80IC of the Act, details of products manufactured at 80IC Units and details of products sold from these Units, item-wise details of direct expenses which has been considered for allocation to 80IC Units, details of claim under Section 35 along with DSIR certificate of expense in Form 3CL and any other certificate obtained or required to be obtained in this regard, details of R D activity being carried on in respect of which deduction has been claimed and details of expenditure in CSR for which deduction under Section 80G has been claimed. Petitioner through its Chartered Account s letter dated 10th December 2019 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justification and/or reason to believe that income chargeable to tax has escaped assessment. Paragraph 14 of Aroni Commercials Limited (supra) reads as under: 14. We find that during the assessment proceedings the petitioner had by a letter dated 9 July 2010 pointed out that they were engaged in the business of financing trading and investment in shares and securities. Further, by a letter dated 8 September 2010 during the course of assessment proceedings on a specific query made by the Assessing Officer, the petitioner has disclosed in detail as to why its profit on sale of investments should not be taxed as business profits but charged to tax under the head capital gain. In support of its contention the petitioner had also relied upon CBDT Circular No. 4/2007 dated 15 June 2007. (The reasons for reopening furnished by the Assessing Officer also places reliance upon CBDT Circular dated 15 June 2007). It would therefore, be noticed that the very ground on which the notice dated 28 March 2013 seeks to reopen the assessment for assessment year 2008-09 was considered by the Assessing Officer while originally passing assessment order dated 12 October 2010. This by itself demonstr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. A similar issue came for consideration in Marico Ltd. v. Assistant Commissioner of Income Tax, 12(3)(2) (2019) 111 taxmann.com 253., where the Court held once a query has been raised by the AO during the assessment proceedings and Assessee has responded to that query, it would necessary follow that the AO has accepted Petitioner s/Assessee s submission so as to not deal with that issue in the assessment order. An assessment order passed under Section 143(3) of the Act even if it does not reflect any consideration of the issue it must follow that no opinion was formed by the AO in the regular assessment proceedings cannot be accepted. The Court held that where queries have been raised during the assessment proceedings and Assessee has responded to the same then the non-discussion of the same or the non-rejection of response of Assessee would necessarily mean that the AO has formed an opinion accepting the view of Assessee, thus taking a view/forming an opinion. Paragraph 6,7,9,10,11,12 read as under: 6. We have considered the rival submissions. It is a settled position in law that the power to reopen an assessment within a period of four years from the end of the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very issue of reopening during regular Assessment proceedings. The parties have responded to it and the Assessment Order dated 30 January 2018, makes no reference to the above issue at all. However, once a query has been raised by the Assessing Officer during the assessment proceedings and the assessee has responded to that query, it would necessarily follow, held by our Court that the Assessing Officer has accepted the Petitioner's/Assessee's submissions, so as to not deal with that issue in the assessment order. In fact, our Court in GKN Sinter Metals Ltd. v. Ms. Ramapriya Raghavan, Asstt. CIT [2015] 55 taxmann.com 438/232 Taxman 386/371 ITR 225 (Bom.) had occasion to dealt with the similar/identical submissions on behalf of the Revenue viz. that an assessment order passed under Section 143(3) of the Act does not reflect any consideration of the issue, it must follow that no opinion was formed by the Assessing Officer in the regular assessment proceedings. This submission was negatived by this Court by observing as follows:- 14. According to the Revenue, it could only be when the assessment order contains discussion with regard to particular claim can it be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessee. Moreover, if every contention raised by the assessee which even if accepted is to be reflected in the assessment order, then as observed by the Gujarat High Court in CIT v. Nirma Chemicals Ltd. 305 ITR 607 , the order would result into an epic tomb. Besides, it would be impossible for the Assessing Officer to complete all the assessments which have to undergone scrutiny at its hand. In the above view, it is clear that once a query has been raised during the assessment proceedings and the Petitioner has responded to the query to the satisfaction of the Assessing Officer as is evident from the fact that the Assessment Order dated 9th March, 2005, accepts the Petitioner's claim for deduction under Section 80-IA/IB of the Act. It must follow that there is due application of mind by the Assessing Officer to the issue raised. The above observations apply on all fours to this Petition, so far as the Revenue's submission of no change of opinion is concerned. 11. The further submission of Mr. Walve that in the absence of the Assessing Officer adjudicating upon the issue it cannot be said that the Assessing Officer had formed an opinion during the regular as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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