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2015 (5) TMI 275 - GUJARAT HIGH COURT

2015 (5) TMI 275 - GUJARAT HIGH COURT - TMI - Reopening of assessment - non deduction of TDS on interest, commission or brokerage, fees or any amount payable to resident contractor or sub-contractor for carrying out any work (including labour supply) - Held that:- 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 fac .....

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8377; 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 to be noted that while disposing of the object .....

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orms 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. 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 exa .....

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ash 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 S .....

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u/s 200(1), will not be allowed for computing the income chargeable under the head "profits and gains of the business or profession". During the financial year 2006-07 relevant to A.Y.2006-07 relevant to A.Y.2007-08, the assessee firm had incurred labour expenses (outside labour) amounting to ₹ 1,38,26,488/- (Total Mfg.&Labour expenses: ₹ 1,60,13,090/-). The work was done by six outside parties. However, no TDS was deducted from payment of ₹ 22,65,048/- made to on .....

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assessment." 2.1. It is required to be noted that when the petitioner raised the objections against the reopening of the assessment for A.Y.2007-2008, by communication dated 19.09.2014, 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 .....

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rt of another business concern. The assessee firm has a turnover of ₹ 23.64 crore and even if the assessee firm claims the SSI unit is a division of the firm, it has no legal backing. SSI benefits will be available to a SSI unit when it is a separate entity and registered as an independent unit. A SSI unit ceases to be a SSI unit when it exceeds certain prescribed limits like turnover, plant & machinery, location etc., Even if the firm controls the SSI unit, the SSI unit being a distin .....

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nder the circumstances, while dealing with the objections raised by the petitioner and disposing of the same, the Assessing Officer has considered altogether a different issue than the reasons for which, the reassessment proceedings are initiated. From the reasons recorded, it appears that the assessment for A.Y.2007-2008 was sought to be reopened on the ground that during the financial year 2006- 2007 relevant to A.Y.2007-2008, the assessee firm had incurred labour expenses (outside labour) amo .....

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une 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 communication dated 19.09.2014 disposing of the objections raised by the petitioner - assesseee, it appears that the Assessing Officer had considered 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 prof .....

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