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2014 (3) TMI 648 - ITAT COCHINValidity of reopening of assessment u/s 147 of the Act – Held that:- There is difference in the quantum of "Operational income" shown in the Profit and loss account and that was shown in the TDS certificates - The assessee has accounted for the reimbursable expenses incurred by it under the head "Expenses recoverable Account", but the accounting practice was not examined by the AO during the course of original assessment proceedings - the validity of the re- opening of assessment has to be judged on the basis of reasons recorded by the assessing officer - Even if the belief about the escapement of income did not ultimately result in assessment of any income, still the re-opening of the assessment shall be held to be valid, if the existence of reasons for belief about escapement of income is accepted - the AO had reason to believe that the income chargeable to tax has escaped the assessment in both the years - Though the assessment of the assessment year 2005-06 was reopened beyond the period of four years, yet the same has to be upheld in view of the Explanation 1 to sec. 147 – thus, the order of the CIT(A) upheld – Decided against Assessee. Difference between the Operating income disclosed by the assessee and the amount shown in the TDS certificates – Held that:- The CIT(A) has deleted the addition in both the years on the basis of sample bills and the reconciliation statements furnished to him by the assessee - mere reimbursement of expenses on actual basis would not give rise to any income assessable in the hands of the assessee – the AO did not examine the books of account to satisfy himself about the veracity of the said claim put forth by the assessee – the practical position in conducting the business has not been appreciated by the AO – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Revenue.
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