| The Tax Publishers2020 TaxPub(DT) 3549 (Del-Trib) INCOME TAX ACT, 1961
Section 147
Where entire attempt of AO, in reassessment proceedings, was to hold that business development and marketing expenses incurred, in respect of which details were already available on record and was examined in original assessment, as capital expenditure and such opinion was solely based out of the opinion of the audit party, which in itself was not permissible.
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Reassessment - Validity - Business development and marketing expenses alleged to be capital in nature -
Issue was as regards validity of initiating reassessment proceedings under section 147 on basis of audit objections. In reassessment proceedings, AO disallowed business development and marketing expenses holding same to be capital expenditure, as against revenue expenditure claimed by assessee. Held: Reasons for reopening the assessment did not specify any failure on part of assessee to disclose truly and fully all material facts. On contrary, full and true disclosure was duly made by assessee. All material information was duly filed and was available on record before AO. Therefore, on perusal of reasons, it could not be comprehended as to what more information remained to be disclosed by assessee and moreover, no instance of any non disclosure was pointed out by AO in reasons recorded. Revenue heavily relied upon Explanation 1 to section 147. Onus was also on AO to show that primary disclosure was not sufficient for further investigation by AO. Entire attempt of AO was to hold that expenditure incurred, in respect of which details were already available on record and was examined in original assessment, as capital expenditure and such opinion was solely based out of the opinion of the audit party, which in itself was not permissible.
REFERRED : New Delhi Television Ltd. v. Dy. CIT (2020) 116 Taxmann.com 151 (SC) : 2020 TaxPub(DT) 1703 (SC) M/s. New Okhla Industrial Development Authority, Greater Noida Industrial Development Authority v. CIT-Appeals & Ors. 2018 TaxPub(DT) 4124 (SC) ITO Ward No. 16 (2) v. M/s. Tech Span India (P) Ltd. & Anr. (2018) 404 ITR 10 (SC) : 2018 TaxPub(DT) 1991 (SC) CIT, Delhi v. M/s. Kelvinator of India Limited (2010) 320 ITR 561 (SC) : 2010 TaxPub(DT) 1335 (SC) CIT v. P.V.S. Beedies (P) Limited (1999) 237 ITR 13 (SC) : 1999 TaxPub(DT) 0225 (SC) Calcutta Discount Company Limited v. ITO, Companies District I, Calcutta, & Anr. 1961 TaxPub(DT) 0130 (SC) State Bank of India, Mumbai v. Asstt. CIT (2018) 411 ITR 664 (Bom) : 2018 TaxPub(DT) 3630 (Bom-HC) Donaldson India Filters Systems (P) Ltd. v. DCIT (2015) 371 ITR 87 (Del) : 2015 TaxPub(DT) 0616 (Del-HC) CIT v. Central Warehousing Corporation (2015) 371 ITR 81 (Del.) : 2015 TaxPub(DT) 0667 (Del-HC) CIT-VI, New Delhi v. Usha International Ltd. (2012) 348 ITR 485 (Del.) : 2012 TaxPub(DT) 2966 (Del-HC) Honda Siel Power Products Limited v. Dy. CIT (2012) 340 ITR 53 (Delhi) : 2011 TaxPub(DT) 0904 (Del-HC) Yuvraj v. Union of India & Anr. (2009) 315 ITR 84 (Bom) : 2009 TaxPub(DT) 1704 (Bom-HC) CIT v. Kelvinator of India Limited. (2002) 256 ITR 1 (Del) : 2002 TaxPub(DT) 1348 (Del-HC) New Light Trading Co. v. CIT (2002) 256 ITR 391 (Del) : 2002 TaxPub(DT) 0211 (Del-HC)
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