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2014 (10) TMI 40 - HC - Income TaxReopening of assessment u/s 147 r.w. 148 - Royalty payments were of a revenue or capital nature - Held that:- The income chargeable to tax which has escaped assessment must be occasioned, by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, for that assessment year. Mr Syali, the learned senior counsel, appearing on behalf of the petitioner/assessee, this pre-condition has not been met, there has been no failure on the part of the petitioner/assessee to make a full and true disclosure of the material facts necessary for the assessment – The AO had specifically asked in his questionnaire as to the nature of the royalty payments and the assessee was asked to justify the same - the AO considered the aspect of royalty payment and also noted the fact that the petitioner had claimed the same as revenue expenditure - the AO disallowed ₹ 34,63,07,373/- out of the entire claim of ₹ 70,60,25,973/- and made an addition – the condition that the assessee must not have made full and true disclosure of the material facts is not satisfied and the re-opening cannot be permitted - The notice dated 30.03.2009 and all proceedings pursuant thereto including the impugned order dated 23.11.2009 are set aside - validity of assumption of jurisdiction u/s 147/148 and have not examined the merits of the matter as to whether the royalty payments were of a revenue or capital nature – Decided in favour of assessee.
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