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2017 (10) TMI 1093 - AT - Income TaxValidity of assumption of jurisdiction to reassess u/s 147 - Held that:- Assessing Officer has not addressed the relevant issue in the original assessment order nor formed any opinion nor took any express decision thereupon. Moreover, we observe that the reassessment proceedings in the instant case got triggered on the basis of findings recorded by the Ld. AO in the assessment proceedings for the subsequent year i.e., AY 2011-12, vis a vis issue in dispute. This in our opinion would constitute to a material relevant for assumption of jurisdiction u/s 147. Support in this regard can safely be drawn from the decision of Hon’ble Bombay High Court in the case of Multiscreen Media Pvt. Ltd. vs. UOI (2010 (2) TMI 269 - BOMBAY HIGH COURT) wherein it is held that reassessment proceedings on the basis of subsequent assessment is valid.Proviso to section 147 is not applicable in the instant case since action u/s 147 has been initiated by issuance of notice u/s 148 dated 31st March, 2014 i.e., before expiry of 4 years from the end of the relevant assessment year. TDS u/s 194J - Disallowance u/s 40(a)(ia) - relationship between appellant and its distributors - Held that:- Section 194J was inserted with effect from July 1, 1995, till the assessment year in question that is the assessment year 2005-06 both the Revenue and the assessee proceeded on the footing that section 194J was not applicable to the payment of transaction charges and accordingly, during the period from 1995 to 2005 neither the assessee has deducted tax at source while crediting the transaction charges to the account of the stock exchange nor the Revenue has raised any objection or initiated any proceedings for not deducting the tax at source. In these circumstances, if both the parties for nearly a decade proceeded on the footing that section 194J is not attracted, then in the assessment year in question, no fault can be found with the assessee in not deducting the tax at source under section 194J of the Act and consequently, no action could be taken under section 40(a)(ia) . Appellant had a reasonable / bonafide cause for not deducting TDS on payment of discounts to the distributors / franchises of its repaid products. This is accordingly not a fit case for making disallowance of an expense by invoking penal provisions of section 40(a)(ia). Nature of payment - IUC charges between BSNL and Cable & Wireless UK - Held that:- Payment of IUC Charges is not “Fee for Technical Services” or “Royalty” within the meaning of its definition as per section 9(1)(vi) and 9(1)(vii) of the Act. Moreover, a perusal of sample agreement for payment of IUC charges between BSNL and Cable & Wireless UK in the instant case also clearly shows that a standard facility for availing interconnectivity services while roaming was availed by the appellant in the instant case. This does not require any human intervention. Thus we hold that payment for IUC Charges is not chargeable to tax in India in the hands of the non-resident recipients and hence TDS was not deductible as per provisions of section 195 of the Act. Therefore, we reverse the order of the Ld CIT(A) on this issue and decide the same in favour of the assessee
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