Marico Ltd. Vs ACIT (Bombay High Court)
The Bombay High Court considered a Petition under Article 226 of the Constitution challenging a notice dated 27 March 2019 issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for Assessment Year 2014-15.
The Petitioner had filed a revised return declaring total income of Rs.418.04 crores under the normal provisions and Rs.670.82 crores as Book Profits under Section 115JB. It claimed a deduction of Rs.47.04 crores towards amortisation of brand value while computing Book Profits.
During scrutiny assessment, the Assessing Officer issued a notice dated 25 September 2017 under Section 142(1), specifically asking why the Rs.47.04 crores claimed as book depreciation on intangibles should not be added back to Book Profits under Section 115JB, particularly as the same amount had been added back in Assessment Year 2013-14. The Petitioner responded through letters dated 10 October 2017 and 21 December 2017, justifying the claim and relying on judicial decisions. The assessment was subsequently completed under Section 143(3) read with Section 144C on 30 January 2018 without making the proposed disallowance.
On 27 March 2019, the Assessing Officer issued the impugned Section 148 notice. The recorded reasons stated, among other things, that Section 115JB did not provide for deduction of amortisation not charged to the profit and loss account on a notional basis and that the failure to add back Rs.47.04 crores had resulted in under-assessment.
