ORDER

Akil Kureshi, J. - At the request of the parties, the petition is taken up for final disposal at this stage.

2. This petition under Article 226 of the Constitution of India challenges notice dated 28th March, 2018 issued under Section 148 of the Income Tax Act, 1961 ("the Act" for short) by the Assessing Officer respondent no.1. The impugned notice dated 28th March, 2018 seeks to reopen the assessment for Assessment Year 201112.

3. The petitioner carries on business of manufacturing and selling paints. In the previous year relevant to subject assessment year, the petitioner had evolved a marketing strategy called "Colour Idea Stores". This was with the intent of increasing its sales by sharing the cost of renovating the shop of the dealers. This renovation of shops of dealers was with the desire to increase its sales by providing a dedicated area for its products and having counters such as "Try and Decide" exclusively for their paints.

4. For the subject assessment year, the petitioner filed its return of income on 24th November, 2011 declaring a total income of Rs. 972.95 crores. In its return of income, the petitioner claimed expenses incurred on "Colour Idea Stores" as a part of its advertisement and sales promotion expenses. Thereafter, the Assessing Officer took up the petitioner''s return of income for scrutiny assessment and sought details of break up of the advertisement and sales promotion expenses and passed an order dated 18th March, 2015 under Section 143(3) of the Act assessing the income at Rs. 1058.42 crores.

5. On 28th March, 2018, the impugned notice was issued seeking to reopen the assessment for Assessment Year 201112. The reasons in support of the impugned notice reads as under :

"In this case, the assessee filed original return of income of A.Y. 201112 on 24.11.2011 declaring total income at Rs. 972,95,45,281/under normal provision of Income Tax Act, 1961 (the "Act") and 1122,83,00,000/u/ section 115JB of the Act. Subsequently, the assessment was completed under section 143(3) r.w.s. 144C(3) of the Act on 18.03.2015 determining total income at Rs. 1058,42,40,442/under normal provision of the Act and at Rs. 1122,83,00,000/u/ section 115JB of the Act. Since, the tax on income assessed under normal provision of the Act was more than the tax on Book Profit computed under MAT provision, income assessed under normal provision of the Act at Rs. 1058,42,40,442/.

2. During the Course of the assessment proceedings for A.Y. 201516, it is seen that the assessee company has incurred an amount of Rs. 32,44,46,533/towards "Colour Idea Store" and debited the expense in the profit & loss account as "Advertisement & Sales promotion Expenses". In this regard, during assessment proceedings, the assessee was asked to furnish the details of expenses along with the copy of the agreement and other documentary evidences. Further, the assessee was also asked to justify the allow ability of the expense as revenue expense.

3. In response, the assessee furnished its submission and also furnished the copy of agreement. On perusal of the copy of the agreement submitted by the assessee, it emerges that the expenses incurred towards "Colour Idea Stores" by the assessee company is capital in nature. The assessee company furnished a copy of agreement dated 6th March, 2014 entered between M/s. Anantha Corporation and M/s. Asian Paints Ltd. The relevant paras of the agreement is reproduced here under :

"Whereas :

- Asian Paints has been inter alia carrying on the business of manufacturing, selling and distributing paints, varnishes, primers and the like as manufacturers, seller and distributors throughout India.

- Asian Paints is desirous of promoting its brands and products through a network of retail outlets wherein the end consumers can have a complete experience of the Asian Paints colours and can understand the various products, their attributes, educate themselves through the colour consultants and other literature on paints.

- F