Bajaj Auto Ltd. v. Dy. CIT - Taxpublishers.in

Case Laws Analysis
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REFERRED Marico Ltd. v. Asstt. CIT & Ors. 2019 TaxPub(DT) 5641 (Bom-HC)
REFERRED GKN Sinter Metals Ltd. v. Ramapriya Raghavan Asstt. CIT & Ors. 2015 TaxPub(DT) 0543 (Bom-HC)
REFERRED Aroni Commercials Ltd. v. Asstt. CIT 2014 TaxPub(DT) 3344 (Bom-HC)
REFERRED Aroni Commercials Ltd. v. Dy. CIT & Anr. 2014 TaxPub(DT) 1649 (Bom-HC)
REFERRED CIT v. Nirma Chemicals Works (P) Ltd. 2009 TaxPub(DT) 0308 (Guj-HC)
REFERRED IDEA Cellular Ltd. v. Dy. CIT & Ors. 2008 TaxPub(DT) 1640 (Bom-HC)
REFERRED Gemini Leather Stores v. Income Tax Officer & Ors. 1975 TaxPub(DT) 0335 (SC)

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The Tax Publishers2024 TaxPub(DT) 1157 (Bom-HC) IN THE BOMBAY HIGH COURT K.R. SHRIRAM & NEELA GOKHALE, JJ. Bajaj Auto Ltd. v. Dy. CIT Writ Petition No. 2002 of 2022 26 February, 2024 Petitioner by: P.J. Pardiwalla, Senior Advocate, & Vasanti B. Patel. Respondents-Revenue by: Suresh Kumar. ORAL JUDGMENT *K.R. Shriram, J.* 1. Rule. Rule made returnable forthwith. By consent of parties taken up for final hearing. 2. Petitioner, for assessment year 2016-17, filed return of income on 29-11-2016 declaring total income of Rs. 4860,25,58,663. The assessment was completed under section 143(3) of the Income Tax Act, 1961 (the IT Act) assessing the total income Rs. 5163,85,46,552. 3. Petitioner received a notice dated 27-3-2021 under section 148 of the Act stating that there were reasons to believe Petitioners income chargeable to tax for assessment year 2016-17 has escaped assessment within the meaning of section 147 of the Act. By a communication dated 17-2-2021, Petitioner was provided the reasons for reopening. The same reads as under: 1. The assessee Bajaj Auto Ltd., having PAN: AADCB2923M is assessed to tax in this charge. In this case return of income was filed on 29-11-2016 declaring total income Rs. 48,60,25,58,663. The assessment was completed under section 143(3) of the Income Tax Act assessing 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 assessees 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 under section 35(2AB) of the Act: The assessee in their computation claimed Rs. 6,38,97,55,364 as deduction under section 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 under section 35(2AB) and that amount was claimed and accordingly debited to the profit and loss account. It is however found from the record that, the total amount allowed for weighted deduction @ 200% is Rs. 545,47,95,980, however the assessee has claimed Rs. 638,97,55,364 which resulted in excess claim of deduction of Rs. 93,49,59,384. Hence, this excess claim is required to be disallowed. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1157 (Bom-HC)

IN THE BOMBAY HIGH COURT

K.R. SHRIRAM & NEELA GOKHALE, JJ.

Bajaj Auto Ltd. v. Dy. CIT

Writ Petition No. 2002 of 2022

26 February, 2024

Petitioner by: P.J. Pardiwalla, Senior Advocate, & Vasanti B. Patel.

Respondents-Revenue by: Suresh Kumar.

ORAL JUDGMENT

K.R. Shriram, J.

1. Rule. Rule made returnable forthwith. By consent of parties taken up for final hearing.

2. Petitioner, for assessment year 2016-17, filed return of income on 29-11-2016 declaring total income of Rs. 4860,25,58,663. The assessment was completed under section 143(3) of the Income Tax Act, 1961 (the IT Act) assessing the total income Rs. 5163,85,46,552.

3. Petitioner received a notice dated 27-3-2021 under section 148 of the Act stating that there were reasons to believe Petitioners income chargeable to tax for assessment year 2016-17 has escaped assessment within the meaning of section 147 of the Act. By a communication dated 17-2-2021, Petitioner was provided the reasons for reopening. The same reads as under:

1. The assessee Bajaj Auto Ltd., having PAN: AADCB2923M is assessed to tax in this charge. In this case return of income was filed on 29-11-2016 declaring total income Rs. 48,60,25,58,663. The assessment was completed under section 143(3) of the Income Tax Act assessing 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 assessees 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 under section 35(2AB) of the Act: The assessee in their computation claimed Rs. 6,38,97,55,364 as deduction under section 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 under section 35(2AB) and that amount was claimed and accordingly debited to the profit and loss account. It is however found from the record that, the total amount allowed for weighted deduction @ 200% is Rs. 545,47,95,980, however the assessee has claimed Rs. 638,97,55,364 which resulted in excess claim of deduction of Rs. 93,49,59,384. Hence, this excess claim is required to be disallowed.