INCOME TAX ACT, 1961

Section 147 read with Section 40(a)(ia)

Reassessment - Full and true diclosure - Assessee disclosed all the primary facts with regrd to deduction claimed on account fo interest paid on loans at the original assessment stage -

AO noted that a sum was claimed on account of interest paid on loans raised from different banks. AO asked assessee to furnish bank/party wise details which was filed the AO noted that loan was also raised for construction of house but no bifurcation of the loan could be given by the assessee. In absence of any clear bifurcation the assessee surrendered a sum on the interest paid which was disallowed by AO. Thereafter, proceeding under section 147 were initiated after recording the reasons, notice under section 148 was issued. Assessee submitted before AO the return filed originally may be treated as return filed in response to notice under section 148. AO after giving opportunity of being heard to assessee disallowed the interest paid by assessee for violation of provisions of section 40(a)(ia) for failure to deduct tax at source. Held: Assessee disclosed all the primary facts with regard to deduction claimed on account of interest paid on loans at the original assessment stage and was considered by AO also at original assessment stage, therefore, there was no failure on the part of assessee to disclose fully and truly all material facts necessary for that assessment. Assessee also filed return of income originally under section 139 and four years have expired from relevant assessment order, therefore, first proviso to section 147 would apply in favour of the assessee and no assessment could have been reopened in such circumstances against the assessee.

Followed:Techman Buildwell Private Limited v. Asstt. CIT (2015) 370 ITR 771 (Del-HC) : 2015 TaxPub(DT) 602 (Del-HC) and Titanor Components Ltd. v. Asstt. CIT (2011) 343 ITR 183 (Bom-HC) : 2011 TaxPub(DT) 2162 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

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