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2016 (1) TMI 786 - HC - Income TaxReopening of assessment - additions made during the course of the original assessment by applying arm's length price u/s.92-C would not qualify for deduction under section 10-A - Held that:- Nowhere the Assessing Officer had recorded that excess deduction was granted to the petitioner due to failure on the part of the assessee to disclose truly and fully all necessary material facts, a prime requirement under the provisions of section 147 of the Act which enables the Assessing Officer to reopen an assessment previously framed after scrutiny beyond the period of four years of the assessment order. If at all it was an error on the part of the Assessing Officer to grant larger relief than what was justified under the legal provisions. At any rate, this would not be a ground for reopening an assessment beyond four years. There were multiple other remedies available to the revenue to exercise within the time frame provided under the statute, but to reopen an assessment beyond the period of four years of the assessment order was simply not one of them since the requirement of such income chargeable to tax having escaped assessment must be relateable to the failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment.- Decided in favour of assessee. Disallowance of expenditures in the form of telecommunication charges, freight and insurance could not be formed part of export turn over - Held that:- In the return filed the assessee had pointed out to the Assessing Officer that for computing export turn over, telecommunication charges for export of computer software were not considered as telecommunication expenses. The same are fixed in nature and not incurred specifically for export of software. However, in case such expenses are reduced for the purpose of computing export turn over, the same are also to be reduced from the computation of total turn over. In other words, according to the assessee, if such charges were to be eliminated from the denominator of the ratio by which profit of business is to be multiplied for computing the exemption under section 10-A of the Act, the same would also be eliminated from the denominator. Whatever be the validity of the petitioner's such contention, surely, the petitioner cannot be stated to have not disclosed truly and fully all material facts. Quite apart from this conclusion, we notice that under communication dated 26.12.2011 to the Assessing Officer, the assessee had given detailed clarification regarding the telecommunication expenses and freight and insurance charges. Thus, not only in the original return filed the assessee had made full disclosures, this issue was examined by the Assessing officer during the original assessment for which the assessee had given written explanation. Any permission now to the Assessing Officer to re-examine the question would be allowing him to change the opinion originally framed. - Decided in favour of assessee.
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