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2012 (12) TMI 785 - HC - Income TaxRe opening of assessment - whether a pre-condition for issuance of notice u/s 147/ 148 are satisfied ? - Royalty or Technical Fee received - India USA DTAA - Held that:- The declaration of law by the Supreme Court in Calcutta Discount Co. v. ITO, (1960 (11) TMI 8 - SUPREME COURT) applies squarely to the facts in this case it was held by the Supreme Court that the duty of the assessee to make full disclosure extends to primary facts. Once that is done, it is the AO's duty to draw the conclusion and inference flowing from the disclosure so made. The assessment record reveals that the Master licensing agreement (MLA) had been placed on the record of the AO in the very first instance when the assessment was completed under section 143(3). Thereafter the reassessment proceedings were initiated in November, 2003 and completed in March, 2005; for those proceedings too what drove the Revenue to issue notice and reopen the proceedings was the master licensing agreement and the nature of "royalty income". The assessing officer in that instance consciously after going through the material concluded that the rate of taxation was 15% in the reassessment proceedings. The scope was the same as in the original proceeding and in the first reassessment proceedings i.e. the taxability of the royalty income under section 44D - the assessment record reveals that the MLA had been placed on the record of the assessing officer in the very first instance when the assessment was completed under section 143(3). Thereafter the reassessment proceedings were initiated in November, 2003 and completed in March, 2005, for those proceedings too what drove the Revenue to issue notice and reopen the proceedings was the master licensing agreement and the nature of "royalty income". AO in that instance consciously after going through the material concluded that the rate of taxation was 15% in the reassessment proceedings. The scope was the same as in the original proceeding and in the first reassessment proceedings i.e. the taxability of the royalty income under section 44D - the conclusions drawn by the CIT (Appeals) and ITAT cannot be faulted in law. The substantial question of law is answered in favour of the assessee.
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