HC allows petition of Big B's company

Mumbai, Nov 14 (UNI) The Bombay High Court today allowed a petition of Superstar Amitabh Bachchan's the Big B's company challenging the Income Tax(IT) department from re-assessing their accounts from 1989 to 2000 for allegedly evading the income tax.

A division bench comprising Justices H L Gokhale and J P Devadhar held that the Commissioner of Income Tax (Appeals)(CIT-A) had not passed any directives for re-assessing the accounts of Lotus Investments Ltd(LIL) as per the claims of Counsel Beni Chatterji on behalf of Assistant Income Tax Commissioner G Y Wagh.

The court, however, held at Wagh had issued notice for the re-assessment of the accounts for the said period on March 30 this year and it was after passage of six years and therefore outside of law.

Also, the court held that the CIT-A had actually quashed the appeal of the IT department in 1999 regarding the undisclosed income of LIL amounting to Rs 2.5 crores for lack of evidence after they had raided the premises of the company.

Meanwhile, Counsel Jehangir Mistry, on behalf of Bachchan's company, contended that the notice was time barred and hence invalid. He also submitted that the accounts could not be re-opened for assessment.

Elaborating on the facts of the case, Beni Chatterji, representing the Income Tax department, told UNI that LIL had taken a loan of Rs five crore from Vysya Bank in 1994 for buying assets, which were being depreciated regularly in the books but had never been purchased and not found even at the time of the raid.

The money was used for actually purchasing the shares of the said bank. Hence the interest on the loan was not waived as the loan was used for a purpose other than stated to the creditor, Mr Chatterji said.

However, the court held that even the CIT-A had earlier quashed the matter for lack of evidence, at the same time, they had stated that the IT department could look into the matter but it was not a direction.

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