Itxa/1357/2016 Of Pr. Commissioner Of Income Tax-2 v. L And T Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1357 OF 2016 Pr. Commissioner of Income Tax-2 .. Appellant v/s. M/s. L & T Ltd. .. Respondent Mr. Suresh Kumar for the appellant Mr. Jehangir Mistri, Senior Counsel a/w Mr. Atul Jasani for therespondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 11[th] JANUARY, 2019 1.The Revenue is in appeal against the judgment of Income TaxAppellate Tribunal (“the Tribunal” for short) raising following questionfor our consideration :- “Whether on the facts and in the circumstances of the case, theTribunal was correct in law in holding that the notice issued u/s148 was not valid on ground that AO has not demonstrated thefailure of the assessee in disclosing the material fact?” 2.The appeal as arises out of the judgment of the Income TaxAppellate Tribunal in which it was held that the notice of reopening which was issued beyond the period of 4 years from the end of therelevant assessment year, was invalid. We may reproduce the reasonsrecorded by the Assessing Officer for issuing such a notice :- “(i)It was seen from the records that while computing thededuction u/s 80-IA, certain pass through components like Fueladjustment Charges (FAC), electricity duty, wheeling charges, gridsupport charges etc. have not been considered for arriving at themarket value of the electricity. (ii)For the purpose of claiming deduction u/s 80-IA, excess profitfrom the generation of electricity has been shown as against '16%return on investment' fixed by the Ministry of Power. (iii)Various expenses like interest, commission, brokerage andcorporate overheads were not debited to the separate Profit & LossA/c. Further, sales and administrative expenditure is notproportionate to the expenditure debited in consolidated P&L A/c tothe profit of 80-IA units, which has resulted in excess deduction u/s80-IA. (iv)The assessee claimed deduction u/s 80-IA, 80HHB, 80HHBA,80-HHC, 80HHE etc. However, exemption claimed u/s 80-IA wasnot reduced from other chapter VI-A deduction as per provisionscontained in Section 80-IA. (v)Deduction u/s 80-IA was wrongly claimed in respect of workon contract basis for various Govt. Agencies, which cannot beconsidered as infrastructure provider.” 3.Perusal of the reasons recorded by the Assessing Officer wouldshow that the Tribunal was perfectly correct in coming to theconclusion that the notice of reopening of assessment was invalid.From the reasons we gather that there was no element of lack of trueand full disclosure on the part of the assessee, which resulted into anyincome chargeable to tax escaping assessment. The reasons clearlyreveal that the Assessing Officer was proceeding on the material whichwas already on record. In the absence of the statutory requirement ofincome chargeable to tax have been escaped assessment due to thefailure on the part of the assessee to disclose truly and fully all materialfacts been satisfied, the Tribunal correctly held that the notice ofreopening of assessment was invalid. No question of law arises. 4.The tax appeal is dismissed. (M.S. SANKLECHA, J.) (AKIL KURESHI, J.)