Case Law Details
Deepak Marda Vs ITO (Bombay High Court)
Bombay High Court held that in the present case there is full and true disclosure on the part of the petitioner. Reopening of assessment, on the ground that another director of the same company has disclosed the income differently is evidently a change of opinion and unsustainable in law.
Facts- In 2007 petitioner had collaborated with the Cinepolis Group to set up Cinepolis India and had acquired certain shares and irrevocable vested rights to equity in Cinepolis India. In F.Y. 2013-14, the petitioner transferred the equity shares and rights in Cinepolis India for Rs.33,55,12,980/- under a settlement agreement. The petitioner incurred an expense of Rs.1,31,87,400/- towards lawyers, Chartered Accountants, Escrow Agents etc. for the said transaction.
The petitioner filed his ROI claiming deduction of legal expenses under the head “Cost of Improvement”, the said return was duly processed u/s. 143(1) of the Act. A notice was issued to the petitioner u/s. 142(1) for scrutiny in exercise of power conferred u/s. 143(2) of the Act. The petitioner submitted required information and documents with detailed explanation as regards the acquisition and transfer of equity shares in Cinepolis India. AO accepted the explanation and on being satisfied with the information and documents passed an order accepting the total income u/s. 143(3) of the Act.
Thereafter, the petitioner was issued the impugned notice u/s. 148 of the Act to reopen the assessment AY 2014-15.
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