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2019 (1) TMI 1199 - AT - Income TaxVariation in the income or loss returned by the assessee - No draft order passed u/s 144C(1) - whether there any variation in the income or loss returned by the assessee and the AO not having passed draft assessment order had violated the provisions of section 144C(1) - Held that:- The assessee suo motu and in good faith claims to have offered additional income to tax at the beginning of assessment proceedings itself. The assessee claims that the said offer was made even before the questionnaire was raised. In such scenario, when the Assessing Officer passes the order after including sum of ₹ 62,12,060/- to the receipts offered in the return of income, then income totals to ₹ 12,38,01,862/-. AO has assessed the aforesaid income in the hands of assessee under section 143(3) of the Act. Variation in the income is not on account of any addition made by the Assessing Officer but is on account of voluntary offer of additional income by the assessee and it cannot be said that the Assessing Officer has made variation in the income returned, which is prejudicial to the interest of such assessee. The variation in the income is qualified by the words which is prejudicial to the interest of such assessee. Addition, if any is made to the returned income is on account of suo motu offer by the assessee of the receipts received by the assessee during the year under consideration from an Indian entity and by an inadvertent error, the same were not offered in the return of income. So, it does fail the test of prejudicial to interest of assessee. Hence, there is no merit in the order of CIT(A) in quashing the assessment order. The same is thus, reversed. The grounds of appeal raised by the Revenue are thus, allowed. Rate to be applied at the relevant time under section 115A(BB) - amount of income tax calculated on the income by way of fees for technical services, if any, included in the total income were to be taxed @ 10% OR 25% - Held that:- The year under appeal is assessment year 2013-14. On the other hand, the Assessing Officer refers to an amendment to the Act which is w.e.f. assessment year 2014-15, under which tax is to be charged @ 25%. AO was of the view that since the return of income was filed on 25.03.2015, then rates which are prescribed w.e.f. 01.04.2015, the same are applicable. First of all, we hold that there is no merit in the order of AO in not applying the rate of 10% to the income returned by the assessee under specific provisions of section 115A(BB) for the relevant year. It may be pointed out herein itself that the Finance Act, 2015 w.e.f. 01.04.2016 had re-substituted the rate of tax @ 10% as against 25%. No merit in the order of AO in applying rate of tax @ 25%. Without prejudice to the same, the learned Authorized Representative for the assessee has pointed out that the rate as per DTAA is 15% to such receipts and in view of provisions of section 90(2) of the Act, beneficial provisions are to be applied; so at best the rate which could be applied was 15%. Accordingly, we allow the plea of assessee and direct the Assessing Officer to apply the rate of tax at 10% plus surcharge and cess as prescribed under section 115A of the Act. The grounds of objections raised by assessee are thus, allowed.
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