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2015 (3) TMI 491 - AT - Income TaxReopening of assessment - Disallowance of claim u/s 42 - principle of merger - CIT(A) allowed part relief - Held that:- In the present case, notice u/s 148 of the Act has been issued on 24.12.2008 in relation to Assessment Year 2001-02 and hence, reopening of the assessment is beyond the period of four years from the end of the relevant assessment year. In the light of the reasons recorded and on perusing the assessment order framed u/s 143(3) of the Act in relation to the year under consideration which indicates that as far as the claim of deduction u/s 42 is concerned, the assessee had claimed deduction of ₹ 19.92 crores (rounded off) but after considering the submissions of the assessee, the Assessing Officer after due application of mind had restricted the deduction u/s 42 at ₹ 46.09 lacs (rounded off). It is also an undisputed fact that against the order of the Assessing Officer passed u/s 143(3) of the Act, the assessee had preferred appeal before the CIT(A) on various grounds which also included the deduction u/s 42 of the Act. The CIT(A) vide order dated 16.07.2004 after considering the submissions, had granted relief to the assessee of ₹ 18.74 crores (rounded off) and thus held assessee to be eligible for deduction u/s 42 at ₹ 19.21 crores as against assessee’s claim of ₹ 19.92 crores and which was restricted to ₹ 46.09 lacs by the Assessing Officer meaning thereby that the order of the Assessing Officer on the issue of deduction u/s 42 stood merged with the order of the CIT(A) and thus had no independent existence of its own. We also find that Hon’ble Gujarat High Court in the case of United Phosphorus Ltd vs. ACIT [2011 (3) TMI 1555 - GUJARAT HIGH COURT] has held that when the assessment order in respect of items for which assessment is sought to be reopened has merged with the order of CIT(A), and as such has no independent existence, and therefore, the assessment could not be reopened in respect of the said items. Thus in the present case the assumption of jurisdiction u/s 147 of the Act is not valid - Decided in favour of assessee. . Reopening of assessment - higher depreciation claim in respect of share of investments for exploration of mineral oils in joint venture with Niko Resources Ltd which included the depreciation on oil wells - Held that:- It is an undisputed fact that the reasons for re-opening of assessment u/s. 147 of the Act was recorded on 31.03.2005 and the same were communicated to the Assessee by ACIT vide letter dated 09.01.2006. In response to the notice for reopening, Assessee vide its letter dated 11.01.2006 had objected to initiation of re-assessment. Assessee's objection to reassessment proceedings were not passed by a separate order but were disposed by the A.O in the assessment order dated 22.03.2006 passed u/s. 143(3) r.w.s. 147 of the Act and this fact has not been controverted by Revenue. Revenue has not brought any contrary binding decision of Hon'ble Apex Court or Hon'ble jurisdictional High Court in support of its contention that the order disposing of the objections of the Assessee to reassessment proceedings along with the assessment order is in order and therefore valid as per law. We therefore, respectfully following the aforesaid decision of Hon'ble Gujarat High Court in the case of General Motor India Pvt. Ltd. [2012 (8) TMI 714 - GUJARAT HIGH COURT] quash the assessment order dated 22.03.2006. - Decided in favour of assessee. TDS at lower rate or not deducted - remittance to non-resident companies/parties - AO concluded payments made by the assessee to Total UAE was taxable as per the provisions of Income-tax Act and Tax Treaty between India & UAE - Assessing Officer also noted that the assessee had already remitted the total payment to the non-resident company and therefore, he was of the view that the tax deducted at source has to be arrived by grossing u/s 195 of the Act and that the assessee was also liable for simple interest on the tax amount for the delay as per section 201(1A) - CIT(A) dismissed assessee appeal - Held that:- In the present case, we find that ld. CIT(A) had not gone into the merits of the case but decided the issue only by relying on the decision of Hon’ble Karnataka High Court in the case of Samsung Electronics [2011 (10) TMI 195 - KARNATAKA HIGH COURT] without passing a speaking order. Since the matter has not been decided on merit by the CIT(A), we are of the view that the matter needs to be re-examined at his end. We, therefore, restore the issue back to the file of the CIT(A) to decide the issue afresh on merits in accordance with law and in the light of the decision of the Hon’ble Apex Court in the case of GE India Technology Centre P. Ltd. (2010 (9) TMI 7 - SUPREME COURT OF INDIA )wherein held that Section 195(2) is based on the "principle of proportionality". The said sub-Section gets attracted only in cases where the payment made is a composite payment in which a certain proportion of payment has an element of "income" chargeable to tax in India - Decided in favour of assessee for statistical purposes.
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