Law:

Section:

Section 37(1), read with section 24, of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 2003-04 - Assessee was a company carrying on real estate business including construction of building, letting out same as well as providing maintenance and other services - In course of assessment, Assessing Officer disallowed deduction claimed on account of brokerage and commission of a sum of Rs. 3,50,000 - On appeal, Commissioner (Appeals) following order passed in assessee's own case in earlier assessment year, allowed 50 per cent of administrative expenses relatable to real estate business but balance amount was disallowed as it related to house property income - On revenue's appeal, Tribunal, restored order passed by Assessing Officer - Whether since there was no change in facts and circumstances of case as were prevailing in earlier assessment year, there was no justification for Tribunal to take a different view in assessment year in question - Held, yes - Whether, therefore, impugned order of Tribunal was not sustainable, and order passed by Commissioner (Appeals) was to be restored - Held, yes Section 260A, read with section 147, of the Income-tax Act, 1961 - High Court, appeal to - Assessment year 2003-04 - For relevant assessment year, assessee's return was processed under section 143(1) - Subsequently, Assessing Officer initiated reassessment proceedings - Assessee did not challenge validity of reassessment proceedings before authorities below - It was before High Court, assessee, for very first time, challenged initiation of reassessment proceedings - Whether since it was not clear as to why assessee did not raise objection against initiation of reassessment proceedings before first appellate authority, i.e. Commissioner (Appeals), said waiver legally estopped assessee from raising such a question before High Court particularly when there had been no order of assessment earlier - Held, yes - Whether, therefore, question relating to reopening of assessment was not required to be dealt with - Held, yes FACTS The assessee was a company carrying on real estate business including construction of the building, letting out the same…

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