Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

ACIT Versus M/s. Bharti Infotel Ltd.

2015 (5) TMI 899 - ITAT DELHI

Re-opening of assessment - Technical know-how fees - CIT(A) deleted the addition holding that because at the time of initiation of proceeding u/s 147 the AO had not recorded reason towards claim of incorrect technical knowhow fees, the addition made on this ground subsequently in the assessment order could not survive - Held that:- The above issue for our consideration is no longer res integra, since in the case of Ranbaxy Laboratories Ltd. vs. CIT (2011 (6) TMI 4 - DELHI HIGH COURT) wherein hel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

George K., JM : This appeal, at the instance of the revenue, is directed against the order of the CIT (A)-X, New Delhi dated 23.10.2012. The relevant assessment year is 2004-05. 2. The effective grounds raised are as follows :- 1. The Ld. CIT (A) has erred on facts in law in deleting the addition made on account of technical know-how fees amounting to ₹ 73248000/- ignoring the fact that the assessee company at the time of reassessment proceedings were given ample opportunity to substantiat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he relevant assessment year, return of income was filed on 01.11.2004, declaring nil income. Assessment was completed vide order dated 29.12.2006 wherein the total income was assessed at ₹ 1.69 crores. Subsequently, assessment was reopened on 21.09.2007 by issuance of notice u/s 148 of the Income-tax Act, 1961 (for short, the Act), for the reason that the provision for doubtful debts ought to be taxed u/s 115JB of the Act. In the course of reassessment proceedings, it was explained that th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

; 7,32,48,000/- as revenue expenditure and why said expenses should not be treated as capital expenditure. The reassessment was completed vide order dated 29.12.2008 wherein the technical know-how fees claimed as revenue expenditure was disallowed as capital expenditure. 4. Aggrieved assessee preferred an appeal before the first appellate authority. Before the CIT (A), it was submitted that since the reasons recorded for issuance of notice u/s 148 of the Act was explained and no addition was mad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ollowed the judgments of Hon ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT (supra) and Hon ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (supra). The CIT (A) did not adjudicate the issue on merits, since the reopening was held to be invalid. The relevant finding of the CIT (A) read as under :- 4. The issue involved and the submissions made by the appellant have been considered. From the assessment order and page 14 to 15 of the paper book it has been s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of those proceedings ceased to survive. Therefore the addition made the AO is deleted and the ground of appeal is allowed. 5. Since appeal is allowed on legal ground, ground of appeal no.2 is not adjudicated. 5. The revenue being aggrieved is in appeal before us. 6. The ld. DR submitted that the CIT (A) is not justified in following the judgment of Hon ble jurisdictional High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT (supra), since the said judgment has not considered the amendment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns and perused the material on record. The solitary issue that arises for our consideration is whether the CIT (A) is justified in quashing the reassessment. The CIT (A) has quashed the reassessment for the reason that when no addition is made for the reasons recorded for issuance of notice u/s 148 of the Act, the AO ceased to possess jurisdiction u/s 147 of the Act to tax any other income. In the instance case, reasons were recorded u/s 148(2) of the Act to bring to tax u/s 115JB of the Act Pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed for bringing to tax X income and no assessment is made on the X income, the AO does not possess the jurisdiction to tax any other income in the reassessment order. The Hon ble jurisdictional High Court agreed with the judgment of Hon ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (supra). The relevant finding of the Hon ble Bombay High Court, after considering the Explanation 3 to section 147, reads as follows :- 11. … Interpreting the provision as it stands and with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ffect of these words or rendering any part of the language used by Parliament otiose. Parliament having used the words "assess or reassess such income and also any other income chargeable to tax which has escaped assessment", the words "and also" cannot be read as being in the alternative. On the contrary, the correct interpretation would be to regard those words as being conjunctive and cumulative. It is of some significance that Parliament has not used the word "or&quo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The words 'such income' refer to the income chargeable to tax which has escaped assessment and in respect of which the Assessing Officer has formed a reason to believe that it has escaped assessment. Hence, the language which has been used by Parliament is indicative of the position that the assessment or reassessment must be in respect of the in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of the proceedings under the section as having escaped assessment. If upon the issuance of a notice under Section 148(2), the Assessing Officer accepts the objections of the assessee and does not assess or reassess the income which was the basis of the notice, it would not be open to him to assess income under some other issue independently. Parliament when it enacted the provisions of Section 147 with effect from 1st April 1989 clearly stipulated that the Assessing Officer has to assessee or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sess or reassess any other income which has escaped assessment and which comes to his notice during the course of the proceedings However, if after issuing a notice under Section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under Section 148 wou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version