DCIT Vs Cadila Pharmaceuticals Limited (ITAT Ahmedabad)
ITAT Ahmedabad held that reopening of assessment u/s. 147 on the issue which is already dealt in the original assessment void ab initio and bad in law since no new fresh material was pointed out at the time of reopening of assessment.
Facts- The assessee company is a manufacturer of pharmaceuticals, bulk drugs, various hospital products, disposable items. The assessee company filed return of income on 30.11.2011 declaring total income at Rs. Nil. Thereafter the assessee filed revised return of income on 04.05.2012 declaring loss of Rs. (-) 7,06,58,882/-. The assessee claimed deduction of Rs. 53,25,79,553/- u/s 80IB(4) of the Act on its Jammu Unit. The assessment u/s 143(3) r.w.s. 144C(13) of the Act was finalized after making some disallowance/additions.
Thereafter the case was reopened and AO disallowed R&D expenses of Rs. 3,51,58,278/- and bad and doubtful debts of Rs. 1,76,47,978/-. CIT(A) partly allowed the appeal. Being aggrieved, cross appeal was filed by both revenue and assessee.
Conclusion- Held that once the issues have been dealt in the original assessment under Section 143(3) r.w.s. 144C(13) then the reopening on the very same issues cannot be taken once again for reopening u/s 147 of the Income Tax Act ignoring the submissions and the evidence put up by the assessee in the original assessment proceedings. This amounts to the different opinion without pointing out any new fresh material on record and thus, Section 147 cannot be invoked in such circumstances. In fact, the assessee’s records in the original assessment proceedings categorically submits the separate accounts for its unit located in Jammu for which the assessee herein has claimed deduction u/s 80IB(4) of the Act as well as deduction u/s 35(2AB) of the Act including R&D Revenue expenses. These aspects were already verified in the original assessment proceedings. Thus, the reopening itself becomes void ab initio and bad in law.
