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2016 (5) TMI 18 - DELHI HIGH COURT

2016 (5) TMI 18 - DELHI HIGH COURT - TMI - Reopening of assessment - At the time of scrutiny assessment u/s 143(3), AO was conscious of the fact that deduction had been claimed under Section 80-O - Revenue contended that copy of agreement was not supplied during the original assessment proceedings - Held that:- Significantly in the affidavit filed by Respondent No. 1, he does not state that the AO had the files for the concerned AYs before him when he issued the notice. He in fact candidly state .....

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after expiry of four years after the expiry of the relevant assessment year in which the assessment orders were passed, is not fulfilled in the present case. - Decided in favour of assessee - W. P. (C) 1968/2001 - Dated:- 27-4-2016 - S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr. Atul Y. Chitale, Senior Advocate with Mr. Chetan Sharma, Advocate For the Respondents : Mr. Dileep Shivpuri, Senior Standing Counsel & Mr. Sanjay Kumar, Junior Standing counsel ORDER 1. This writ petit .....

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neering consultancy services to M/s Sumitomo Corporation, Japan in connection with the work undertaken by the latter for power projects in India. 3. For the AYs 1990-91 and 1991-92, the Assessee claimed deduction under Section 80HHB as it then stood for execution of foreign projects. This claim was rejected by the Assessing Officer ('AO'). The matter was carried in appeal by the Assessee to the Commissioner of Income Tax (Appeals) [ CIT (A) ] for AY 1990-91. The said appeal was ultimatel .....

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by the Assessee with M/s. Sumitomo Corporation was produced before the AO. The AO passed the assessment order for AY 1992-93 on 17th April 1995 and for AY 1993-94 on 20th December 1995. A perusal of the assessment order for AY 1992-93 show that the AO was conscious of the fact that deduction had been claimed under Section 80-O of the Act. The discussion in the assessment order was focussed on whether the claim of the Assessee for 50% deduction in respect of the gross amount brought into India w .....

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that, from the side of the Revenue there was no attempt to re-visit the issue of claim of the Assessee for deduction under Section 80-O of the Act at that stage. 7. For AY 1996-97, the Petitioner again claimed deduction under 80-O. This was rejected by the AO. The assessment order for AY 1996-97 was challenged by the Assessee before the CIT (A) who by an order dated 1st November 1999 reversed the assessment order on this aspect and allowed the appeal filed by the Assessee. It is stated that this .....

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e Assessee with Sumitomo Corporation, Japan was produced. This agreement revealed that the Assessee was paid commission for obtaining contracts for Sumitomo Corporation in respect of the Sardar Sarovar Dam and Teesta Canal Hydro Electrical Project from the Government of Gujarat and West Bengal State Electricity Board respectively. It was therefore concluded that the remittance brought into India for the relevant AYs 1992-93 and 1993-94 did not entitle the Assessee for relief under Section 80-O o .....

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t assessment year in which the assessment orders were passed for AYs 1992-93 and 1993-94. In terms of Section 147 of the Act, one of the primary conditions to justify reopening of the assessment beyond the period of four years after the expiry of the relevant assessment year in which the assessment orders were passed is the failure on the part of the Assessee to disclose the material particulars. The case of the Revenue is that the agreement between the Assessee and the Sumitomo Corporation was .....

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n additional affidavit dated 17th July 2001 has been filed by the Additional Commissioner of Income Tax, Special Range XII, in which in para 3 it was stated as under: The assessment record of M/s Apten Corporation for the assessment year 1993-94 is not traceable. It is however submitted that the reasons, which have been recorded, are based on the information, which was received from the office of CIT(A) where the appeals pertaining to AY 1990-91 and 1991-92 were heard and disposed-ff. During the .....

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and were filed by the assessee along with its return of income. The records of the CIT(A) and the assessment order for the assessment years 1992-93 and 1993-94 were available with the deponent and after examining these records the deponent exercised powers u/s 147 of the Act and reopened the assessment after recording the detailed reasons. Therefore, the notices have been issued after due application of mind. 13. The Assessee on its part has filed an affidavit dated 25th May 2001, referring to t .....

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. 14. In addition Mr. Atul Y. Chitale, learned Senior counsel appearing for the Petitioner, has produced a photo copy of the letter dated 19th November 1995, written by Apten Corporation to the AO in the course of the assessment proceedings enclosing the agreements with the foreign principals in relation to the execution of the work for Sardar Sarovar Project and West Bengal State Electricity Board. 15. The crucial question, therefore, arises is whether it could be said that the agreement in qu .....

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usion that the said agreement was not produced before the AO in the course of the assessment proceedings for AYs 1992-93 and 1993-94. 17. Compounding the difficulty is the fact that the files for AY 1993-94 is not traceable both according to the affidavits of the Assessee as well as the Revenue. The orders recorded by the AO in the assessment proceedings for AY 1992-93 show that the AO had specifically asked the Assessee to produce the agreement. If the Assessee had failed to produce the agreeme .....

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