Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 935 - ITAT VISAKHAPATNAMReopening of assessment - Held that:-The A.O. at the time of issuing notice u/s 148 of the Act, is not necessarily to establish the fact that there is escapement of income. But, what is necessary is that there must be some material evidence, on which the formation of opinion is arrived at by the A.O. In the instant case, the A.O. issued notice u/s 148, based on the information that the assessee has received arbitration amount which was not offered to tax, which constitute the valid reason for reopening the assessment. Therefore, we are of the view that the A.O. has rightly reopened the assessment. The CIT(A), after elaborate discussions rejected the assessee arguments and upheld the validity of reopening. Therefore, we upheld the reopening of the assessment and reject the grounds raised by the assessee. Taxability of interim amount received towards arbitration award - whether the interim amount received by the assessee is taxable on receipt basis for the year under consideration? - Held that:- The interim amount received towards arbitration award after furnishing security and also on personal guarantee of the Directors of the company, cannot be treated as income of the assessee on receipt basis in the year of receipt. On going through the facts of the present case, we noticed that issue is not yet final. The Hon'ble A.P. High court, finally dismissed the review petition filed by the DGNP on 18.6.2014 and upheld the arbitration award. Therefore, in our opinion, the assessee has got absolute right to receive the amount, when the Hon'ble A.P. High Court finally upheld the arbitration award and not in the impugned assessment years. Under these circumstances, interim amount received by the assessee cannot be brought to tax as income of the assesse for the assessment years 2005-06 & 2008-09. - Decided in favour of assessee
|