The Bombay High Court has quashed the income tax reassessment against Indusind Media.
The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that even in case of reopening within 4 years from end of the assessment year if the issue was examined in the course of the assessment proceedings then no reopening of assessment can be done since the same would amount to change of opinion.
The petitioner/assessee filed its return of income on 29 October 2007, which return was revised on 31 March 2009. In the revised computation of income, the petitioner claimed as deduction an amount of Rs.69,88,37,464/- being Inventories, Sundry Debtors, Loans & Advances and Cost of Set Top Boxes written off against the Share Premium pursuant to amalgamation scheme approved by the High Court. The case of the petitioner was selected for scrutiny assessment.
On 7 December 2009, the petitioner filed written submissions wherein it had mentioned various write off against the share premium account in accordance with the amalgamation order passed by this Court on 9 February 2007.
The petitioner also gave its submissions on business loss & bad debts in respect of the Inventories, Sundry Debtors, Loans & Advances amounting to Rs.9,05,12,555/-, Rs.41,00,00,000/- and Rs. 12,99,12,471/- respectively. The petitioner submitted that with respect to a claim of Rs.6,84,12,438/- on account of write off of Set Top Boxes.
An assessment order under Section 143 (3) of the Act was passed. In the said assessment order, an amount of Rs.1,00,41,557/- was disallowed on account of bad debts. The income assessed was Nil after setting off unabsorbed business losses and depreciation.
A notice under Section 148 of the Act was issued to the petitioner. The petitioner was served with the reasons for reopening assessment.
The petitioner called upon the respondent to furnish an audit scrutiny report on the basis of which the reopening proceedings were initiated. The petitioner also stated that the issue raised in the reasons recorded were examined during the course of the scrutiny proceedings and, therefore, the impugned proceedings are based on change of opinion which is not permissible.
The petitioner also denied that there is any escapement of income on account of double deduction of the same amount. The petitioner specifically raised the objection that the date of recording the reasons has not been furnished and, therefore, it was submitted that the reasons have not been recorded prior to issue of notice
The court held that the petitioner in its objections has stated that there is no double deduction of the same amount and therefore, the basis of reopening that there is a double deduction is factually incorrect. This factual averment raised by the petitioner in its objection has not been rebutted in the order rejecting the objections.
Case Details
Case Title: M/s. Indusind Media & Communications Ltd. Versus The Assistant Commissioner of Income Tax
Case No.: Writ Petition No. 649 Of 2013
Date: 20 February 2025
Counsel For Petitioner: Mihir Naniwadekar
Counsel For Respondent: Suresh Kumar
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