TMI Blog2008 (12) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee took foreign currency loan of Rs. 10,79,70,000 from M/s Doshin Hongkong Ltd. in October, 1996 towards working capital requirement. The assessee utilized this amount for repaying the existing loans taken from IDEI, ICICI and IRBI. During the impugned financial year, the assessee had claimed interest on these loans but no tax was deducted under s. 195. The AO was of the opinion that as the loan amount was not utilized for industrial development in India, the interest does not qualify for exemption under s. 10(15)(iv)(f). Hence, the AO concluded that assessee ought to have deducted tax under s. 195 and paid the same to the Government of India account. As the assessee failed to deduct tax on this amount and pay the same to the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (f). The certificate issued by the Government exempting the assessee from withholding tax will not be applicable to the interest paid by the assessee, as the assessee did not utilize the loan for working capital purpose. The certificate issued was applicable when the loan amount was utilized for working capital purpose. Hence, the assessee ought to have deducted tax under s. 195 from the interest paid and paid the same to the Government of India account." 5. Upon assessee's appeal, as regards reopening, learned CIT(A) confirmed the AO's action holding as under: "I have considered the issue regarding reopening of the assessment under s. 147 of the IT Act and I find that during the course of original assessment proceedings, the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel of the assessee submitted that the reopening in this case was done after four years and hence he contended that the proviso to s. 147 will come into playas there was no failure on the part of assessee to disclose fully and truly all material facts necessary for the assessment. The learned counsel of the assessee further placed reliance upon decision of the Hon'ble jurisdictional High Court in the case of Fenner (India) Ltd. vs. Dy. CIT (1999) 155 CTR (Mad) 165 : (2000) 241 ITR 672 (Mad). The learned Departmental Representative, on the other hand placed reliance upon the order of the learned CIT(A). 8. We have carefully considered the issue. As per the admitted facts of the case, in the original sanction order by the Government of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 CTR (SC) 30 : (2007) 291 ITR 500 (SC) that an intimation under s. 143(1)(a) cannot be treated as an assessment order. Moreover, it also cannot be said that the AO has formed an opinion in the first reassessment on the impugned addition. In the background of aforesaid discussion and precedent, we uphold the order of the learned CIT(A) that the reassessment in these cases was valid. 10. As regards the merits of the case, Revenue has agitated that: "The learned CIT(A) failed to note the following: A total sum of Rs. 2,39,95,141 was payable upto 31st March, 2001. This was reversed and shown as income under Sch. 8 (other income) in the accounts for the year ending 31st March, 2002. However, no details were furnished with regard to appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the income chargeable under the head 'Profits and gains of business or profession',- (a) in the case of any assessee- (i) any interest (not being interest on a loan issued for public subscription before the 1st day of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which is payable,- (A) outside India; or (B) in India to a non-resident, not being a company or to a foreign company, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-s. (1) of s. 200." 14. Sec. 10(15)(iv)(f) under the chapter, 'Incomes whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oans to financial institutions. 16. We also agree with the learned counsel of the assessee that the ground raised in the first para of the Revenue's appeals in this regard is not relevant for these impugned assessment years. Under the circumstances, when the language of the Act is clear and unambiguous, there is no need to bring any extraneous extrapolation. Under the circumstances, in our opinion, there is no infirmity in the order of the learned CIT(A) in this regard and hence we uphold the same. 17. In the assessee's cross-objection for asst. yr. 1999-2000, one more issue has been raised. It has been contended that AO be directed to delete the disallowance made in respect of royalty of Rs. 64,396. 18. On this issue, the AO noted th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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