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The ITO-10 (1) (1) , Mumbai and others Versus M/s. Grid Consultants Pvt. Ltd., Mumbai and others

2015 (6) TMI 451 - ITAT MUMBAI

Reopening of assessment - payment of royalty questioned - CIT(A) deleted reopening - Held that:- the assessee has furnished break-up of sales and royalty agreement inter alia with other details during the course of the original assessment proceedings. Vide letter dt. 4.12.2003 which was submitted on 11.12.2003 once again the assessee has furnished the details of royalty payment alongwith other details. Thus, it can be seen that the payment of royalty has been duly examined by the AO before makin .....

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- CIT(A) deleted addition - Held that:- The undisputed fact is that there is a royalty agreement between the assessee and the Texas based company. It is also an undisputed fact that the payment of royalty is based on sales of grid material. We further find that no evidence whatsoever has been brought on record neither before the First Appellate authority nor before us to show that the assessee has made sales on discounted price. We also find that no such documentary evidences have been verified .....

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Texas USA. The assessee is further directed to substantiate its claim by bringing cogent material evidence on record to show that sales in India of Grid material is not based on US list price. - Decided in favour of revenue for statistical purpose - I.T.A. No. 68/Mum/2011,C.O. No. 253/Mum/2012,I.T.A. No. 4918/Mum/2011,C.O. No. 53/M/2012 - Dated:- 1-6-2015 - Shri Joginder Singh, and Shri N.K. Billaiya,JJ. For the Petitioner: Shri Premanand J For the Respondent: Shri Siddharth Duge ORDER PER N.K. .....

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the Ld. CIT(A) erred in holding that the reopening of the assessment was made on the basis of change of opinion and hence reopening made by the AO was bad in law. 3.1. Briefly stated the facts of the case are that the assessee is in the business of consultancy services. The original return of income declaring total income at ₹ 65,705/- was filed on 30.10.2002. The return was processed u/s. 143(1)(a) of the Act on 11.12.2002. Thereafter, the return was taken up for scrutiny assessment. The .....

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s shown at ₹ 27,99,371/-. Considering the Royalty payment @ 26% of the list price of the grid material and in view of the Royalty payment of ₹ 17,69,083/- the actual sale proceeds from the sale of grid material should amount to ₹ 68,04,165/- as against a total sale proceeds of ₹ 32,66,664/- shown by the assessee. By not disclosing the full sale proceeds of grid material the assessee company has failed to disclosure full and true income in the return of income filed u/s. 1 .....

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he light of the royalty expenditure claimed by the assessee. The AO proceeded by computing the sales based on the payment of royalty and computed the sales at ₹ 68,04,165/-. The assessee had shown sale of ₹ 32,66,664/-. According to the AO, the assessee has suppress sales to the tune of ₹ 35,37,501/- and added the same to the income of the assessee. 4. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A) and strongly objecting to the reassessment, it was str .....

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ment proceedings, the assessee had given all the necessary details pertaining to payment of royalty, the break-up of sales which were duly considered by the AO. The Ld. CIT(A) was convinced that since all the details/informations/material were already filed by the assessee during original assessment proceedings, there was no failure on the part of the assessee to disclose fully and truly all material facts relevant for assessment. The Ld. CIT(A) finally held that the reopening made by the AO was .....

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or the assessee reiterated what has been submitted before the lower authorities. 8. We have given a thoughtful consideration to the orders of the lower authorities and the relevant documentary evidences brought on record. Vide letter dt. 3.12.2003, we find that the assessee has furnished break-up of sales and royalty agreement inter alia with other details during the course of the original assessment proceedings. Vide letter dt. 4.12.2003 which was submitted on 11.12.2003 once again the assessee .....

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to interfere with the findings of the Ld. CIT(A). The appeal filed by the Revenue is dismissed. C.O. No. 253/M/12 -A.Y. 2002-03 - Assessee s appeal 9. This C.O. by the assessee is barred by limitation by 82 days. Since we have dismissed Revenue s appeal, we do not find it necessary to decide this C.O which is barred by limitation. ITA No. 4918/Mum/2011 - A.Y. 2007-08 - Assessee s appeal 10. This appeal by the assessee directed against the order of the Ld. CIT(A) 21 Mumbai dt. 7.4.2011 pertainin .....

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, the AO proceeded by recalculating the sales based on the payment of royalty @ 26% on the grid material sold by the assessee company. The sales were recomputed at ₹ 37,62,719/-. The assessee has shows sales at ₹ 15,89,448/-. The AO accordingly added ₹ 21,73,271/- as suppressed sales. 11.2. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A). It was strongly contended that as per the agreement, the assessee had to pay royalty @ 26% of the US list price of t .....

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the facts and the submissions, the Ld. CIT(A) observed that there is no evidence on record to show that the assessee has made any unaccounted sales, the AO was not justified in rejecting appellant s book results and making estimation of sales. The Ld. CIT(A) accordingly deleted the addition made on account of suppress sales. 12. Aggrieved by this, the Revenue is before us. 13. The Ld. Departmental Representative vehemently submitted that the assessee has not furnished any details to suggest that .....

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