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2014 (10) TMI 429 - AT - Income TaxValidity of reopening of assessment u/s 147 Jurisdiction of the AO Escapement of income or not Held that:- Reassessment was initiated on the basis of material already on record and there was no fresh material to initiate such proceedings it is a settled position that where there is no fresh material in the possession of the AO, reassessment proceedings are not valid relying upon THE COMMISSIONER OF INCOME TAX-V Versus ORIENT CRAFT LTD. [2013 (1) TMI 177 - DELHI HIGH COURT] - having regard to the Explanation I of section 147 read with section 143(1) the reopening of the assessment in this case was justified - the note forming part of the return clearly mentioned and described the nature of the receipt under a non-compete agreement - The reasons for the notice u/s 147 nowhere mentioned that the revenue came up with any other fresh material warranting reopening of assessment - mere conclusion of the proceedings u/s 143( I) ipso facto does not bring invocation of powers for reopening the assessment Tribunal was rightly of the view that it was merely a change of opinion on the part of the AO and it could not initiate reassessment proceedings Decided against revenue. Deletion on account of mould expenses - Expense or rent on moulds relate to M/s Dart India & ITL and not to the assessee company Held that:- Following the decision in Asstt. Commissioner of Income Tax Versus M/s. Tupperware India Pvt. Ltd. [2014 (3) TMI 725 - ITAT DELHI] - mould rentals was payable by the assessee under a contractual obligation with contract manufacturer - The contract manufacturer have also given a certificate to the extent that mould rentals was to be borne by the assessee pursuant to the agreement - There is no change in the facts, situation or in law thus, the Revenue cannot be allowed to adopt a different stand - when in earlier asstt. years the revenue accepted the order of the tribunal in favour of the assessee, then Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it - the expenditure on mould is allowable in the hands of the assessee - The payment of mould rental was done by the assessee under a contractual obligation with the contract manufacturer. The company had to import the molds from overseas group company on hire basis and provide the same to contract manufacturers to enable them to manufacture the products - Once the contract manufacturer completes the order placed by the assessee, the molds are returned back to the company and therefrom to the molds owners in case the particular molds, is not required for use of manufacturer the contract and molds borrowed by the assessee can by no stretch of imagination be considered as a colorable device. If it was to be presumed that the payment of mould rentals is the liability of the contract manufacturers and so incurred by them in that case the cost of such mould rentals would be part of 'purchases' as it would increase the production cost of the contract manufacturer and accordingly, the purchase price bargained by the appellant would be increased by the same amount of mould rental - the assessee would not incur rental expenses, but will have to pay resultant higher purchase price to the contract manufacturer Decided against revenue.
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