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TMI Blog2015 (4) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... ays for which he is assessable in the said year. The notice has been enclosed as Annexure-1 to the present petition. The reasons for initiating proceedings under Section 147 of the Act, 1961 have been communicated to the petitioner under letter dated 28.03.2013 and it reads as follows : "It is seen that M/s. L.G. Electronics India Ltd. (Henceforth LGEIL) has made the following remittances during the F.Y. 2005-06 relevant to A.Y. 2006-07 to its parent company (M/s. LG Electronics Korea) and other Associated Enterprises, on which no TDS has been deducted. The same expenses are dis-allowable u/s 40 (a) (i) of the Income Tax Act. The details of the remittances made by the Company are as follows : Sl. No. Description of transaction F.Y. 2005-06 1. Import of raw material and consumables, service spares and spare parts 3,134,465,989/- 2. Import of finished goods 2,003,499,385/- 3. Import of capital goods 29,153,894/- 4. Export Commission paid 99,157,209/- 5. Reimbursement of Expenses 119,094/- TOTAL 5,26,63,95,571/- In view of the above facts I have reason to believe that income of the assessee has escaped assessment to the extent of Rs. 5,26,63 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer and it is only thereafter that the assessment proceedings were completed. Lastly it is submitted that the objections filed by the petitioner in the matter of existence of reasons to believe under Section 148 of the Act, 1961 have been disposed of by a non-speaking order dated 28.02.2014. Counsel for the assessee has referred the following judgements : 1. Lamna Lal Kabra v. Income Tax Officer (69 ITR 461). 2. CIT v. Pardeshiya Industrial & Investment Corp. of U.P. Ltd. (186 Taxmann 131 (All.). 3. Vodafone West Ltd. v. Assistant Commissioner of Income Tax (No. 2) (354 ITR 520) 4. Vodafone West Ltd. v. Assistant Commissioner of Income Tax (No.1) (354 ITR 562) 5. Hindustan Lever Ltd. v. R. B. Wadkar, Assistant Commissioner of Income Tax and others (268 ITR 332). 6. Hindustan Lever Ltd. v. R.B.Wadkar, Assistant Commissioner of Income-Tax and others (No. 2) (268 ITR 339). 7. Transmission Corporation of A.P. Ltd. and Another v. CIT (239 ITR 587). 8. DIT v. Morgan Stanley (292 ITR 416). 9. Indraprastha Chemicals Pvt. Ltd. And Others v. CIT and Another (271 ITR 113). 10. Gwalior Rayon Silk Co. Ltd. v. CIT (140 ITR 832). 11. Commissioner of Income Tax v. Suren Internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source, under Section 210 of the Act, 1961. (c) Initiation of proceedings against the petitioner-Company for disallowing the related expenses under Section 40(a) (i) for failure to deduct taxes. We have been informed that the Korean Company and its related entities filed writ petitions against the reopening of the assessments before this Court being leading writ petition no. 148 of 2015. All such petitions have been dismissed vide judgement and order dated 13.02.2015. The High Court while dismissing another bunch of writ petitions leading being Civil Misc. Writ Petition (Tax) No. 1366 of 2015, filed by the non-resident Company, by means of an order dated 05.11.2014 recorded that the said non-resident entities were carrying on business in India through a Permanent Establishment. Once P.E. was found to be in existence, attribution of profits liable to tax in India was a necessary consequences and such proceedings have been drawn in respect of escapement of taxable income. The Court has also been informed that proceedings have been initiated against the petitioner under Section 201 of the Act, 1961 for recovery of tax which has not been deducted and necessary orders calling upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd. v. Commissioner of Income Tax reported in [1986] 25 TAXMAN 356 (SC) in paragraph nos. 7 and 8 has held as follows : "7. The assessee's contentions is that the ITO could have found out the position by further probing. That, however, does not exonerate the assessee to make full disclosure truly. The Explanation 2 to section 147 of the Act makes the position abundantly clear. The principles have also been well settled and reiterated in numerous decisions of this Court {Hazi Amir Mohd. Mir Ahmed vs. CIT (1977) 110 ITR 630 (Punj. & Har.) and ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC)} that mere production of evidence before the ITO was not enough, that there may be omission or failure to make a true and full disclosure, if some material for the assessment lay embedded in the evidence which the revenue could have uncovered but did not, then, it is the duty of the assessee to bring it to the notice of the assessing authority. The assessee knows all the material and relevant facts, the assessing authority might not. In respect of the material failure, the omission to disclose may be deliberate or inadvertent. That was immaterial. But if there is omission to disclose mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 57 Conveyance 247,093 Bus Hiring Charges 167,721 Welfare 68,846 Service Charges 243,282 Sales Commission 2,489,690 Service Franchisee Expenses 406,493 Vehicle Running Expenses 37,084 Repairs 247,935 Miscellaneous 296,045 TOTAL : 68,994,836 Similarly,in Annexure-I to the same report of the Chartered Accountant the assessee has given the particulars of payment made to persons under Section 40-A (2) (b) of the Act, 1961 during the year ended 31.03.2006. It reads as follows : L.G. Electronics India Private Limited ANNEXURE--I FINANCIAL YEAR 2005-06 STATEMENT SHOWING PARTICULARS OF PAYMENTS MADE TO PERSONS SPECIFIED UNDER SECTION 40 A(2) (b) OF THE INCOME TAX ACT, 1961 DURING THE YEAR ENDED 31st MARCH, 2006. Sl. No. NATURE OF EXPENSES 1. ----------------------------------------------------- 2. Paid to L.G. Electronics Inc., Korea, the Holding Company :- Purchase of Raw Materials, Stores & Spares and Service Components Rs. 3,134,391,293 Purchase of Finished Goods Rs. 2,003,499,385 Purchase of Fixed Assets Rs. 29,153,894 Royalty Payment Rs. 1,007,153,457 Export Sales Commission Rs. 99,157,209 Design ..... X X X X Extracts X X X X X X X X Extracts X X X X
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