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2012 (9) TMI 18 - HC - Income TaxReopening of assessment - reopening of assessment previously framed after scrutiny within a period of four years - the assessee have charged 24% interest on the overdue payments from its sister concern - Held that:- As the assessee had sold certain goods to its sister concern during the year under consideration who on delayed payments of such goods paid interest at the rate of 24% which was much higher than the prevailing market rate of interest which varies between 15% to 18%. By adopting such modality, the assessee had reduced the taxable profit of sister concern and at the same time increased the profit of Silvasa unit of the assessee company which was eligible for deduction under section 80-IA. These facts were not clear from the working out of deductions under section 80IA along with the return of income It is an admitted position that in the return filed, the assessee did not indicate whether the entire interest or part thereof was received from the sister concern. Further, there is no indication that from the sister concern, the assessee had received interest at the rate of 24% on the outstanding amounts. Disclosure in the tax audit report by the assessee that the assessee is closely associated with M/s.Aditya Medisales Ltd., its sister concern would not be a sufficient disclosure. From the facts on record, it was not possible for the Assessing Officer to ascertain that the petitioner received interest from sister concern which was higher than the normal rate of interest, thus such interest was charged at the rate of 24% per annum, were not discernible from the record at all - notice for reopening was valid - in favour of Revenue.
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