Case Law Details
International Flavours and Fragrances India Private Limited Vs DCIT (Madras High Court)
The issue under consideration is whether the notice issued u/s 147 for re-opening the assessment is justified in law?
Petitioner is engaged in manufacture of flavour essences, mixed seasoning powders (dry mix) and formulated perfumery compounds etc. The petitioner started a new manufacturing unit in State of Jammu & Kashmir in the year 2007 after obtaining all the necessary registrations and approvals with an installed capacity of 5000 MT per annum. The petitioner has claimed deduction under Section 80IB of the Income Tax Act, 1961 for its manufacturing activities. In this regard, the respondent had specifically asked for the details of the new undertaking which is provided by the petitioner via letter.
The respondent initiate the re-opening of assessment with the reason that the activity carried out by the assessee do not amount to manufacture, hence the claim made by the assessee u/s 80IB(4) should be disallowed and brought to tax.
The Central Excise Department has also accepted the fact that the petitioner was engaged in the manufacture of excisable goods which were eligible for exemption under Notification No.56 of 2002-CE dated 14.11.2002 as amended by Notification No.34 of 2008-CE dated 10.06.2008. Therefore, a change of opinion based on report of ACIT cannot amount to failure on the part of an assessee to truly and fully disclose information/documents required for the purpose of completing the assessments. Hence, Reopening of the assessment to deny the deduction under Section 80IB of the Act, is therefore without jurisdiction.
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