TMI Blog2015 (5) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... ered altogether a different and new issue with respect to the status of the petitioner-assessee as SSI unit. It is also required to be noted at this stage and from the profit and loss accounts, it appears that as such, the petitioner-assessee never claimed any deduction with respect to the payment of ₹ 22,65,048/-. Therefore, the ground on which, the Assessing Officer has tried to reopen the assessment i.e. the assessee had claimed ₹ 22,65,048/- as expenditure which was not allowable and, therefore, the said has resulted under assessment, is absolutely and factually incorrect. Therefore, as such, the formation of opinion by the Assessing Officer while reopening the assessment has been vitiated. Even otherwise, it is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner - assessee has prayed for an appropriate writ, order or direction to quash and set aside the impugned notice dated 17.03.2014 issued under Section 148 of the Income Tax Act (hereinafter referred to as the 'Act') for A.Y.2007-2008 by which, in exercise of powers under Section 147 of the Act, the assessment for A.Y.2007-2008 is sought to be reopened. 2. At the outset, it is required to be noted that the assessment for A.Y.2007-2008 is sought to be reopened beyond the period of 4 years from the relevant assessment year on the following reasons recorded under Section 148(2) of the Act:- As per section 40(a) of the I.T. Act, 1961 any interest, commission or brokerage, fees or any amount payable to resident contractor or sub-co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14, the Assessing Officer has disposed of/overruled the said objections by observing in paragraph Nos.7.2 and 7.3 as under:- 7.2.During the period under consideration, the assessee firm had incurred labour expenses (outside) amounting to ₹ 1,38,26,488/- out of total manufacturing and labour expenses of ₹ 1,60,13,090/-. However, no Tds was deducted from payment of ₹ 22,65,048/- made to M/s.Mithul Gems(SSI Unit), 28, Saurashtra Diamond, B/h.Gitanjali cinema, Varachha road, Surat on grounds that the said unit is a division of the main firm M/s.Mithul Gems and hence, no TDS is deductible on inter divisional transfer of payments. However, this argument of the assessee is found not acceptable, since, a SSI unit is a separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see firm had incurred labour expenses (outside labour) amounting to ₹ 1,38,26,488/- (Total Manufacturing-Labour expenses: ₹ 1,60,13,090/-). The work was done by six outside parties, however, no tax was deducted from payment of ₹ 22,65,048/- made to one party - Mitul Gems/SSI unit and, therefore, since, no TDS was deducted from the payment, the amount of ₹ 22,65,048/- is not an allowable deduction in terms of Section 40(a)(ia). The assessee has claimed the said expenditure and said had resulted under assessment of income to the tune of ₹ 22,65,048/- in the case of assessee due to the failure on the part of the assessee to disclose truly all material facts necessary for his assessment. However, from the communica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms an opinion that there is any under assessment of the income and that too, due to failure on the part of the assessee to disclose truly and fully all the material facts necessary for the assessment, in case, the assessment proceedings are initiated beyond the period of 4 years. 4. Under the circumstances, the formation of opinion without examining the issue (as according to the Assessing Officer, the issue is yet to be examined and the notice under Section 148 of the Act has been issued for examining the issue mentioned in paragraph No.7.2.) has been vitiated. Under the circumstances also, the impugned notice under Section 148 of the Act and opening of the assessment for A.Y.2007-2008 deserve to be quashed and set aside. 5. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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