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2016 (10) TMI 685 - AT - Income TaxReopening of assessment - Additions u/s 40(a)(ia) for non deduction of TDS - contention of the assessee-company that there was no fresh information which enabled the AO to form opinion that income escaped assessment cannot be accepted, as information had come to the knowledge of AO that the provisions of section 10(23G) were omitted w.e.f. 1/4/2007 during the course of subsequent assessment proceedings - Held that:- Hon’ble Supreme Court in the case of Ess Kay Engineering P.Ltd. vs. CIT (1997 (7) TMI 114 - SUPREME Court ), Phool Chand Bajrang Law & another vs. CIT (1993 (7) TMI 1 - SUPREME Court ) held that information obtained in subsequent assessment proceedings could lead to a belief that income chargeable to tax has escaped assessment even though the transaction in question had been examined during the course of original assessment proceedings. Reliance placed by the learned counsel for assessee-company on the decision in the case of Kelvinator of India Ltd., (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) is misplaced, as there is no opinion formed in the original assessment proceedings on the issue of claim of examination of tax free interest u/s 10(23G) of the Act. Therefore, we hold that initiation of re-assessment proceedings u/s 147 is valid in law. Additions u/s 40(a)(ia) for non deduction of TDS - provision for royalty, fees for technical service etc - reversal of provision for contractor and professional fee etc. - claim of the assessee-company that these amounts were disallowed u/s 40a(ia) suo motu for non-deduction of tax at source - Held that:- In the year under consider consideration, the very provision created was reversed and therefore the same should be allowed as a deduction. There is no quarrel on this proposition but the claim can be allowed only on satisfying the AO that the provision was reversed out of amount disallowed earlier. The CIT(A) has recorded a categorical finding that the assessee has failed to link provision reversed with the amount of provision originally created and disallowed. The CIT(A) also observed that the assesseecompany had expressed its helplessness to establish the link between original provision and reversal provision during the year under consideration. In the circumstances, the CIT(A) has confirmed the addition. Even before us, assessee-company had not made any attempt to prove nexus between amount of provision created which was disallowed in earlier years and the amount of provision reversed during the year under consideration. The onus of proving the claim always lies with the assessee. As in the case of CIT vs. Imperial Chemical Industries (India) Ltd., (1969 (2) TMI 15 - SUPREME Court )has unequivocally held that burden of providing that the claim is allowable lies on the assessee. Discharge of burden has to be effective and meaningful and not to cover up the book entries and paper work. In view of failure by the assessee-company to prove nexus between amount disallowed suo motu, provisions of section 40a(ia) and the amount reversed during the year under consideration, we have no option but to confirm the action of the AO making the addition on the same. - Decided against assessee.
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