ACIT Vs Bharat Petroleum Corporation Ltd. (Supreme Court of India)
The dispute arose from reassessment proceedings initiated by the tax authorities against Bharat Petroleum Corporation Ltd. under Sections 147 and 148 of the Income Tax Act, 1961 for Assessment Years (AY) 2013–14 and 2014–15. The notices were issued after more than four years from the end of the relevant assessment years. The reassessment was initiated on the ground that income had allegedly escaped assessment due to the assessee’s failure to disclose fully and truly all material facts.
Read High Court Judgment in this case: Bharat Petroleum Corporation Ltd. Vs ACIT (Bombay High Court)
For AY 2013–14, the Assessing Officer sought to reopen the assessment on the basis that the assessee had claimed exemption under Section 10(34) on dividend income, including ₹37.10 crore received from a trust formed after the amalgamation of Kochi Refineries Ltd. with the company. According to the tax authorities, the trust was not a company and therefore the amount distributed by it did not qualify as exempt dividend income. It was also alleged that the assessee had not disclosed all material facts relating to this income.
For AY 2014–15, the reassessment was initiated on two grounds: the exemption claimed on income received from the trust and an alleged incorrect deduction of ₹127.39 crore under Section 32AC relating to investment in assets such as LPG cylinders and regulators, which the Assessing Officer claimed did not qualify as “plant and machinery.”
