Re-opening of assessment unjustified as complete disclosure of primary material facts already submitted

Asian Paints Ltd. Vs ACIT (Bombay High Court)

Bombay High Court held that re-opening of assessment under section 147 of the Income Tax Act is unjustified as the assessee provided complete disclosure of all the primary material facts during the scrutiny assessment.

Facts- The case of the petitioner was selected for scrutiny assessment during the course of which a show cause notice was issued by AO requiring it, inter-alia, to submit the details of the ‘advertisement and sales promotion expenses’.

In response to the said show cause notice, the petitioner filed its reply giving details regarding advertising and sales promotion expenses, a break-up of which did reflect that an amount of Rs.22,50,16,050/- was spent under the head “Colour Idea Stores”.

AO finally passed the order of assessment u/s. 143(3) read with section 144C(3) of the Act for A.Y. 2014-15 computing the total income of the petitioner at Rs.1654.08 crores, after making certain disallowances reflected in the advertisement and sales promotion expenses. However, it is stated that the claim of expenses under the head “Colour Idea Stores” was accepted.

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