TMI Blog2015 (7) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... lied their mind and allowed the entire commission while passing orders under sec. 92CA(3) and 143(3) respectively as claimed by the assessee. Hence we annul the order of CIT passed under sec.263. - Decided in favour of assessee. Transfer pricing adjustment - Disallowance by the AO on the basis of arm’s length price of I.T. Engineering services worked out by the TPO i.e. Add. CIT, Transfer Pricing, Hyderabad vide his order u/s 92CA - main emphasis of the assessee is that the General Motors was a new customer during financial year 2002-03 and the initial services were provided on higher rate, on a trial basis. Further the rates between Venture USA Germany and General Motors should not be compared without making suitable adjustment towards the volume of business as the working hours provided to AE is 40 times more than the hours billed to M/s General Motors - Held that:- CIT (A) has justified the deduction of 5% from the adjusted rate adopted by the TPO while determining the ALP by stating that no assessee will charge a rate which is at great variance with the normal market rate of the services provided considering the fact that it was a new client who whom the assessee will try t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment was put forth before the TPO and the AO at the time of original assessment. Since reasons recorded also do not have any link with the formation of belief. In the present case before us the statement of Ramalinga Raju has no connection with the subsidiary of Satyam Group i.e. Satyam Venture Engineering Services, Hyderabad (Assessee herein). - Decided in favour of assessee. - ITA No.492/Hyd/2008 & ITA No.196/Hyd/2011,ITA No.783/Hyd/2008,ITA No.924/Hyd/2008,1136/Hyd/2013 & 1137/Hyd/2013,ITA No.1904/Hyd/2011 - - - Dated:- 1-7-2015 - Shri P.M. Jagtap Smt.Asha Vijayaraghavan, JJ. For the Petitioner : Shri C.S. Subramanyam Shri V. Siva Kumar For the Respondent : Smt. G. Aparna Rao, DR ORDER Per Smt. Asha Vijayaraghavan, J.M. These are the appeals preferred by the assessee and the Revenue against the orders of the lower authorities in Hyderabad for various years being 2002-03, 2003-04 and 2004-05 in the case of Satyam Venture Engineering Services (P) Ltd. ITA No.492/Hyd/2008 A.Y 2003-04 This appeal filed by the assessee is against the order of the CIT-III Hyderabad, dated 5.11.2007 u/s 263 of the Income Tax Act, 1961. 2. Briefly state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2007, the TPO s order was not binding on the AO and thus the AO was empowered to alter the TPO s order. The CIT held that since the AO did not exercise his power while passing order u/s 143(3) of the Act, the said order was erroneous and prejudicial to the interest of Revenue. 6. Having held that the order passed by the AO u/s 143(3) was correctly subjected to revision u/s 263 of the Act, the CIT held in para 14 of his order that as regard the method under which commission on sales made to SCSL and its affiliates is to be disallowed, the matter was restored to the AO for verification of record and applying the most appropriate method for determining ALP following TPO s order for subsequent A.Y vis., 2004-05 where the TPO disallowed commission paid on sales made to SCSL and its affiliates. He also directed the AO to invoke the provisions of section 92C(3) and pass the order accordingly. 7. On appeal against the order u/s 263, the ld Counsel for the assessee submitted as follows: As regards the direction of the CIT, for following TPO s order for subsequent A.Y viz., A.Y 2004-05 it was submitted that the TPO disallowed commission paid on sales made to SCSL and its affilia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of the TPO in accepting the sales commission as reasonable by adopting the CUP method has found acceptance by the appellate authorities including the jurisdictional bench of the ITAT. Again the method of commercial expediency adopted by the TPO for A.Y 2004-05 which was recommended by the CIT for consideration by the AO has been struck down as totally unacceptable by the appellate authorities including the jurisdictional bench of ITAT. 8. The ld DR relied on the order of the AO. 9. We have heard both the parties. We are of the opinion that the CIT erred in holding that in the absence of section 92CA(4) during the relevant period, it is not binding on the AO to follow the order of TPO. The order of CIT is contrary to the CBDT instruction No.3 of 2003 wherein it is clarified that the AO has to compute the total income of the assessee having regard to the arms length price so determined by TPO. 10. We are also of the view that the CIT ought not to have assumed jurisdiction u/s 263 of the Act in as much as it is merely a change of opinion. We rely on the decision of Malabar Industrial Co Ltd. Vs. CIT 243 ITR 0083 Even assuming that the enquiries made by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee itself had asked for adoption of CUP method and there was no adjustment possible while applying the comparison under CUP method. In view of this, TPO worked out the difference in rate at $ 11.52 per hour and thus computed the arms length price of services made to AEs at ₹ 32,08,47,363 against the price shown by the assessee at ₹ 31,15,64,238, thus working out differential amount of ₹ 92,83,125 to be adopted by the AO for adjustment. 3. AO added the above amount to the income returned by the assessee. However, while working out deduction u/s 10A, the AO has also included the above additions in the business profits on account of which the income has been finally assessed at ₹ 43,17,240. 4. Aggrieved, assessee preferred appeal before the CIT (A). 5. In Ground No.2, assessee disputed the AO s finding that on site services billed to Venture USA and Venture Germany were not at arm s length. Ground Nos. 3 to 5 and ground No.7 are again extension and elaboration of the main ground taken by the assessee against the adjustment made by the TPO/AO by comparison of prices of services rendered to AEs with the prices charged to General Motors (non-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of General Motors were correctly considered as internal CUP by the TPO for the purpose of comparison in this case. In view of this, looking to the functional similarity, I uphold the adoption of services given to M/s. General Motors as comparable with the services provided to the AEs by the TPO/AO, on the facts of the case. 6.3 The next important issue requiring consideration is the adjustment/deduction in rates required to be given on account of high difference in volume of transactions, as contended by the Ld ARs of the appellant during the appeal proceedings. I feel that, in view of the provisions contained in rule 108(1 )(a), rule 108(2) as well as rule 108(3), reasonable adjustments should have been made by the TPO/AO to eliminate the effects of such difference in the volume of transactions. There is no dispute about the fact that M/s. General Motors was a new customer for the appellant in F.Y. 2002-03 and the transactions were also on a small scale i.e., only 424 hours of service. However, I feel that even in such circumstances, no assessee will charge a rate which is at great variance with the normal market rate of the services provided, considering the fact that it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in holding that the rates charged to the customer M/s General Motors and Venture Group are comparable. 6. The ld CIT (A) ought to have considered the fact that M/s General Motors was a new customer during the financial year 2002-03 and that the initial services were provided on a trial basis at a higher rate whereas the work flow from Venture Group is in a continuous basis over a number of years . 10. Ground 1 is general in nature. With respect to ground numbers 2, 3 4 and 6 the ld Counsel for the assessee submitted that the CIT (A) failed to grant necessary adjustment for the price difference on a scientific basis and proceeded on an adhoc basis by granting a deduction @ 5% which is not in accordance with Rule 10B. The ld Counsel further submitted that the assessee worked for nearly 40 times more with AE when compared to non- AE. It was further submitted in addition General Motors is a new customer taken on trial basis and hence the company has quoted higher price as it was not sure whether or not the customer would stay with the company. The ld Counsel for the assessee prays for a downward adjustment of atleast 25% to the price charged to Non-AE. Alternatively t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g suitable adjustment towards the volume of business as the working hours provided to AE is 40 times more than the hours billed to M/s General Motors. However, we are in confirmity with the order of the CIT (A) wherein he has applied his mind and discussed elaborately at Para Nos. 6.3 and 6.4. The CIT (A) has justified the deduction of 5% from the adjusted rate adopted by the TPO while determining the ALP by stating that no assessee will charge a rate which is at great variance with the normal market rate of the services provided considering the fact that it was a new client who whom the assessee will try to get more business in future. Hence the CIT observed that despite less transactions, the rates charged by the assessee in case of new client. Therefore, the CIT had rightly directed for an adjustment of account difference in the rate under the TP provisions worked @ US$ 9 per hour. 16. The grievance of the assessee that suitable adjustment have to be made to bring the prices to a comparable level has been satisfied by the CIT (A) by giving a reduction of 5%. The CIT (A) was of the opinion that the reduction of 5% is sufficient with respect to the facts of the case, we also co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t attributable to service income derived from parent company Sat yam Computer Services Limited (SCSL). Accordingly the AO by an order dated 31.12.2008 U/s.143(3) r.w.s 263 disallowed an amount of ₹ 2.59 Crores out of the total sales commission paid of ₹ 4.26 Crores. The said disallowance represents the commission paid to Venture Global on the sales made to Satyam Computer Services Ltd. and its associates. The entire sales commission paid on the sales received from SCSL was disallowed. Against the revised assessment the assessee filed appeal before CIT(A). 4. The CIT (A) dismissed the appeal. Assessee filed appeal against the CIT s order u/s 263 as well as the order of the CIT (A) on the revised assessment. The 263 order was annulled by our order in ITA No.492 and the appeal against giving effect to order passed by the AO u/s 143(3) r.w.s. 263 in ITA No.196/Hyd was also allowed in favour of the assessee. 5. The AO issued a notice dated 29.03.2010 U/s.148 reopening the assessment and requesting the company to file a return of income. The said notice was received by the company on 31.03.2010. Subsequent to the notice the company requested the AO to consider the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djustment to export sales to compute deduction U/s 10A is incorrect in the light of the settled position of the law. 10. The DRP had not appreciated the reasoning put forward by the company in support of the above said grounds and confirmed the draft assessment order of the AO. 11. The draft assessment order upon confirmation by the DRP culminated into final assessment order with the adjustments to the returned income as explained above. 12. Ground Nos.2 3 before us is whether reopening u/s 147 is valid or not. The validity or otherwise of the reopening of the assessment is being objected broadly on two grounds: i) The reason for reopening is vague and based on absence of any nexus to any of the operations of the assessee. ii) The assessment is finalized without resulting in any addition on account of reason for reopening. 13. The AO reopened the assessment under section 147 beyond the period of four years. Sec.147 permits the reopening /reassessment of assessment finalized under section 143(3) upon satisfaction of the AO that the assessee had failed to disclose fully and truly all material facts necessary for assessment for that assessment year. The reasons giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to furnish certain information and submit relevant documents. Authorized Representatives of the company appeared from time to time and furnish the required details and the case discussed with them. Paragraph 1 of the Assessment Order dt.31.03.2006 ....................... in response to the posting notices issued, S Venkateswarlu and Ratna Prasoona authorized representatives of the company appeared from time to time and furnished details called for. After verification of the information furnished and after discussing the case with the ARs of the assessee company the assessment is completed as ... under The above extracts from the relevant orders confirm furnishing of information necessary for the completion of the assessment before the TPO and the Assessing Officer with respect to transactions with all the group companies. Reason - II raised by A.O. for reopening The assessment of the assessee company was completed U/s.143(3) and the Assessing Officer is not aware of the likely variations in income and assets and liabilities of SCSL at the time of assessment. The transactions revealed by Mr. Ramalingaraju apparently will have bearing on the affair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puter Services Ltd with 50% shareholding each. In accordance with the understanding with the joint venture partner, the CEO is to be appointed by Venture Global Engineering LLC. The composition of the board consisted of three directors each nominated by both the partners. The organizational structure and the nature of operations do not in any way have remotest possible connection with any of the investment or front companies alleged by the AO. Hence, a reason though not necessarily conclusive, should have a minimum relevance to the nature of the business, transactions of the assessee company and, finally the income of the Company. The reasons cited by the AO are farfetched and fail to bring out at least a feeble or thin link with the operations of the company. Reason III for reopening as noted by Assessing Officer The books of front companies and financial statements do not reflect true and fair statement of affairs and thus it is apparent some of the transactions are also not recorded in the books of front companies like that of assessee Company. The claim of exemption U/s.I0A in the case of Satyam Computer Services Ltd was found to be false by CBI, SFIO and the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri B.Ramalinga Raju does not contribute to subscribe to the reason to believe that income chargeable to tax had escaped assessment has no meaning in it. 16. The Assessing Officer completed the assessment by making the following three adjustments to the returned income. Nature of addition Amount (Rs. In crores) TPO Order (Adjustment on account of ALP) Commission paid to AE Net of disallowance in original 143(3) and 263 (Rs.4.26 ₹ 2.60) 1.66 Export sales: (Rs.8.62 ₹ 0.72) 7.90 AO Order Section 10A adjustment to export sales under explanation 2(iv) u/s 10A 0.89 TOTAL 10.45 The Ld. Counsel submitted as follows: 17. The first two adjustments arise out of the Transfer Pricing Officer having changed his opinion in respect of determination of the arm's length price of the international transactions. None of the reasons cited by the AO for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le High Court was not the intent of the Parliament. Hence, an Explanation 3 was introduced to Sec.147 which enabled the AO to carry out additions, which also came to the notice of the AO during the assessment proceedings U/s.l47, notwithstanding such additions do not arise from the reasons for reopening U/s.147. 22. The ld Counsel for the assessee relied on the following judicial precedents: CIT vs. Jet Airways (I) Ltd (331 ITR 236) Swarnandhara IJMII Integrated Township Development Company (ITA No.1803/Hyd/2012). ACIT, Raipur vs. Major Deepak Mehta (24 Taxmann.com 147 Chattisgarh). Ranbaxy Laboratories Ltd vs. CIT (12 Taxmann.com 74 Delhi) CIT vs. Mohd. Juned Dadani (30 Taxmann.com I. Guj.) 23. The DR relied on the decision in the case of Majinder Singh Kang v. CIT Anr.(2012) 344 ITR 0358 and argued that reopening u/s 147 is valid. 24. We heard both the parties. In a recent case the Hyderabad bench of the Tribunal in the case of Rohini Boitecb (P) Ltd and other, ITA No.1233/Hyd/2011 and other appeals jointly disposed vide order dated 31.12.2013, the issue of Section 147, especially in light of Satyam scam was examined. In these sixteen appeals a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143 (3) read with section 147. 26. We rely on the decision of Ranjit Reddy vs. Dy. CIT, Hyderabad (2013) 144 ITD 361, wherein it has been held as follows: One needs to give a schematic interpretation to the words reason to believe failing which, section 147 would give arbitrary power to AO to reopen assessments on the basis of mere change of opinion, which cannot be per se reason to reopen. The AO has no power to review; he has the power to reassess. But reassessment has to be taxed on fulfilment of certain pre-conditions and if the concept of change of opinion is removed, then, in the garb of reopening the assessment, review would take place. One must treat the concept of change of opinion as an inbuilt test to check abuse of power by the AO. Hence, the AO has power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief . 27. Further, para 32 at page 483 in the case of S. Ranjit Reddy (Supra), reads as follows: Same view was taken by the Third Member Mumbai Bench in the case of Telco Dadajee Dhackajee Ltd vs. Dy. CIT (ITA No.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) deleted the addition of the TPO of ₹ 0.05 lakhs and the adjustment made to the export turnover in favour of the assessee. However, he confirmed the adjustment made by the TPO with respect to the commission of ₹ 86 Lakhs. Aggrieved by the said order both the revenue and the company are in cross appeals before the Hon'ble ITAT which are pending disposal. 4. This assessee is currently in appeal before the ITAT. The facts relating to this assessment are given below: 5. The AO issued a notice dated 14.03.2011 U/s.148 reopening the assessment and requesting the company to file a return of income. The said notice was received by the company on 21.03.2011. Subsequent to the notice the company requested the AO to consider the return of income filed originally on 31.10.2004 as return in response to the notice U/s.148. The AO provided the reasons for re-opening. The company objected to the said re-opening, based on the reasons so furnished vide letter dated 29.08.2011. The AO disposed the objections to notice u/s 148 by a letter dated 10.09.2012. 6. The AO proceeded to reassess the income u/s 143(3) r.w.s. 147 accordingly. The AO referred the transactions to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening of the assessment is being objected broadly on two grounds. i) The reason for reopening is vague and based on absence of any nexus to any of the operations of the appellant. ii) The assessment is finalized without resulting in any addition on account of reason for reopening. 12. The Assessing Officer reopened the assessment under section 147 beyond the period of four years. Sec.147 permits the reopening/reassessment of assessment finalized under section 143(3) upon satisfaction of the AO that the assessee had failed to disclose fully and truly all material facts necessary for assessment for that assessment year. The reasons given by the AO to reopen assessment in the case of the company would provide a light on his reasoning to conclude failure to disclose fully and truly all material facts necessary for assessment. 13. On 07.01.2009 chairman of the Satyam Computer Services Ltd had written a letter to the Board of Directors of Satyam Computers wherein he elaborately explained various transactions of Satyam Computer Services Ltd which resulted in the financial statements being incorrect. In his statement he categorically stated that these kind of irregularities wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts misled by the assessee. The Ld Counsel submitted as follows : 15. The reasons given by the Assessing Officer stems out from the original assessment order, CIT(A) order and TPO's order. There is no mention of any fresh fact, evidence or information leading the AO to believe possible escapement of income. It is pre-condition of Sec.147 that an assessment completed U/s.143(3) cannot be reopened unless there is a failure to disclose fully and truly material facts necessary for assessment. A change of opinion on the same set of facts will not permit reopening U/s.147. Both the paragraphs above unmistakably revealed the frame of mind of the AO. He narrated the facts already available on assessment record and concluded ALP should have been at nil and demonstrated the change of his opinion by concluding the ALP should have been nil as against ₹ 2.8 Crores adopted in original assessment. This is a copy book replica of what an AO should not do for reopening an assessment u/s 147. Hence, there is neither reason nor a justification to reopen the assessment based on the above paragraphs. Reason - II given by the Assessing Officer is as follows:- Given t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entation as considered by them they did disallow a portion of the commission paid. The statement of the Chairman of Sat yam Computer Services Ltd or any of the transactions narrated by him have not referred to the transaction of commission. 19. The reason elucidated by the AO should lead a rational person to the belief of possible escapement of income. In other words the reason should direct, an enquiry as to quantification of income that is found to have escaped assessment. The reason and the belief from the above cited paragraph stand poles apart without a nexus. Hence, the reasons cited by the AO to reopen the assessment do not prove failure of disclosure by the assessee. 20. Further there is no fresh fact nor a finding which can lead to reopening of the assessment U/s.147. The substance of the Joint Venture agreement understanding between the parties and consideration for making the payment were extensively presented to the TPO and AO at the time of original assessment. 21. The Assessing Officer relied on the judgment of the Supreme Court in ACIT Vs Rajesh Jhaveri Stock Brokers Pvt Ltd. to explain the meaning of reason to believe to reopen the assessment U/s.l47. As he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief . 25. Further, para 32 at page 483 in the case of S. Ranjit Reddy (Supra), reads as follows: Same view was taken by the Third Member Mumbai Bench in the case of Telco Dadajee Dhackajee Ltd vs. Dy. CIT (ITA No.4613/Mum/2005 dated 12th May, 2010). Further same view was taken by Delhi High Court in the case of CIT vs. Orient Crafts Ltd (2013) 29 taxmann.com 392 and also by Gujarat High Court in the cazse of Inductotherm India (P) Ltd v. Dy. CIT in Special Civil Application 858 of 2006 dated 6.8.2012. Further Bombay Bench in the case of Delta Airlines Inc. Vs. ITO (International Taxation) (2013) 33 Taxmann.com 192(Mum). 26. We are of the opinion that there is no fresh fact or tangible material to come to the conclusion that there is escapement of income from assessment. The entire joint venture agreement understanding between the parties and consideration for making the payment was put forth before the TPO and the AO at the time of original assessment. Since reasons recorded also do not have any link with the formation of belief. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the following adjustments: (Rs.in crores) Nature of International transaction Amount as per financial statements Arm s Length price Adjustment Export of software Engineering services 1.33 1.5 0.17 Sales commission 3.35 Nil 3.35 Total adjustment 3.52 7. Based on the above adjustment to the international transactions as recommended by the TPO, AO finalized the assessment after considering the Special Audit Report and Transfer Pricing Officer order by making the following adjustments: ALP Adjustment - Commission to AE - Export of software services Re-computation of exemption- Adjustment to export turnover u/s 10. Particulars Amount (in Rs.) Returned income 24,97,979 Adjustment ALP Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16,42,418 11. Draft assessment order sent to the Department. Aggrieved against the draft assessment order u/s 143(3) r.w.s. 147 and 144C the assessee raised objection before the DRP by raising appropriate grounds. 12. The grounds raised against the reopening u/s 147 were rejected by the DRP. DRP considered where a return is processed u/s 143(1) there is no finding given by the AO and hence reopening is justified. Despite the AO or TPO not having identified either bogus payments or inflated expenditure, the DRP erroneously observed that it is a well known fact that in this group the expenditure was inflated, bogus payments were made etc. For these reasons, they held the reopening u/s 147 as valid. 13. Also objected to on merits against the Arm s Length Price Adjustment. 14. Before us, the assessee raised additional grounds which are as follows: (i) On the facts and in circumstances of the case, the ld AO erred in law and facts in reopening the case u/s 147 without a valid reason to believe the income escaped assessment . (ii) The AO erred on facts and law in not excluding the similar amount incurred in foreign currency and excluded from export turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said information is either not present or it was not gathered at all. Finally the penultimate test of validity of the reason to reopen, resulting in addition or adjustment to the income reassessed also fails, because there was neither enquiry in this direction nor addition in the assessment completed u/s 143(3) r.w.s. 147. 21. The Ld Counsel further stated excepting the statement made by Assessing Officer, there was no material available with any agency within two months after the statement. (The assessee s case is reopened within 3 months from the date of confession by Mr RamalingaRaju.). The trial of the offences committed by Mr Ramanlinga Raju, even after five years has not reached a finality nor the charges filed against SCSL had indicated any irregularities in subsidiaries of SCSL. In the above circumstances, what is stated in the letter and statement do not give rise rational reason to reopen the appellant's case. 22. The Ld. Counsel submitted the notice under Sec.148 was issued based on vague reasons and there was no tangible or definite information which could lead to the formation of belief that income chargeable to tax has escaped assessment. In this connec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith or relevant bearing on the formation of the belief. The reason recorded must have a rational connection with the belief. The material in possession of the AO should have a direct nexus to the said belief. The material should be adequate enough to make the AO believe possible escapement of income. The test of rational connection fails where there is no material or the material gives rise only a suspicion not leading to belief. The material should not be vague or guess or gossip or rumor. The reason cited by the AO cannot be pretence to reopen the assessment. It cannot be purely subjective satisfaction of the AO. It should be capable to being tested for connection and rationality to cause belief. 26. The ld Counsel also relied on The ld Counsel for the assessee relied on the following judicial precedents: CIT vs. Jet Airways (I) Ltd (331 ITR 236) Swarnandhara IJMII Integrated Township Development Company (ITA No.1803/Hyd/2012). ACIT, Raipur vs. Major Deepak Mehta (24 Taxmann.com 147 Chattisgarh). Ranbaxy Laboratories Ltd vs. CIT (12 Taxmann.com 74 Delhi) CIT vs. Mohd. Juned Dadani (30 Taxmann.com I. Guj.) 27. We heard both the parties. In a recent c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e formation of the belief . 29. Further, para 32 at page 483 in the case of S. Ranjit Reddy (Supra), reads as follows: Same view was taken by the Third Member Mumbai Bench in the case of Telco Dadajee Dhackajee Ltd vs. Dy. CIT (ITA No.4613/Mum/2005 dated 12th May, 2010). Further same view was taken by Delhi High Court in the case of CIT vs. Orient Crafts Ltd (2013) 29 taxmann.com 392 and also by Gujarat High Court in the case of Inductotherm India (P) Ltd v. Dy. CIT in Special Civil Application 858 of 2006 dated 6.8.2012. Further Bombay Bench in the case of Delta Airlines Inc. Vs. ITO (International Taxation) (2013) 33 Taxmann.com 192(Mum). 30. Hence, we are of the opinion that the order passed by the AO u/s 143(3) r.w.s. 147 r.w.s. 144C(5) of the I.T. Act, 1961 is to be cancelled. Hence we allow the assessee s appeal. 31. In the result, assessee s appeal is allowed. 32. To sum up, appeals are decided as under: Appeal No. A.Y. Decision 492/Hyd/2008 (Assessee) 2003-04 Allowed 196/Hyd/2008(Assessee) 2003-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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