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2016 (5) TMI 1177 - ITAT BANGALORE

2016 (5) TMI 1177 - ITAT BANGALORE - [2016] 48 ITR (Trib) 46 - Validity of reopening of assessment - Held that:- Re-assessment proceedings are initiated based on the same set of information as was available at the time of original assessment proceedings and therefore it amounts to mere change of opinion which cannot be a valid ground for re-opening assessment as held by the Hon’ble Supreme Court in CIT vs. Kelvinator of India Ltd., (2010 (1) TMI 11 - SUPREME COURT OF INDIA ).

In the a .....

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d void. Therefore, we have no hesitation to hold that the re-assessment proceedings initiated by AO are illegal and cannot be sustained in law. - Decided in favour of assessee - ITA No. 1352/Bang/2014 - Dated:- 10-2-2016 - SHRI VIJAYPAL RAO, JUDICIAL MEMBER and SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Appellant : Shri Nageswar Rao, Advocate For The Respondent : Smt.Neera Malhotra, CIT(DR) ORDER Per INTURI RAMA RAO, AM : This is an appeal filed by the assessee-company, directed against the .....

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als)-I, Bangalore ["learned CIT(A)"] dated 01 August 2014 (received on 09 October 2014), on the following grounds, which may kindly be considered without prejudice to one another Ground 1: Order contrary to law, facts and is violative of principles of natural justice 1.1 The impugned order is grossly without jurisdiction, unjust, unlawful and bad in law, as the same is contrary to the express provisions of the Act and facts. as also the law as laid down by Hon'ble Court(s). Further .....

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law were not satisfied 2.2 The impugned order proceeds on unsubstantiated presumptions while completely ignoring correct and relevant facts on record to erroneously uphold the exercise of jurisdiction under Section 147 of the Act by wrongly relying on the decision not applicable to the facts of the case. 2.3 The learned CIT(A) has failed to appreciate that 'reason to believe' is a sine qua non for initiating the reassessment proceedings under Section 147 of the Act, that the reasons as .....

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of jurisdiction under Section 147 of the Act. Without prejudice to above Ground 3: Disallowance of commission on sales 3.1 The learned CIT(A) has erred in upholding the disallowance of the Appellants claim for deduction of routine business expenditure amounting to ₹ 16.21,45,504 paid towards sales commission, totally disregarding the submissions/ evidence on record, proceeding purely on conjectures and surmises, without citing any valid reasons basis. 3.2 The learned CIT(A) has erred in no .....

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epting the allegation of the learned AO that there was no proper documentary evidence while failing to even consider the material produced on record and citing extraneous and irrelevant reasons. Ground 4: Disallowance of depreciation on "Goodwill" 4.1 Without prejudice to the Appellant's contention that if the disallowance of expenditure towards sales commission is deleted on merits or exercise of jurisdiction under Section 147 of the Act is held to be invalid, the disallowance of .....

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le Delhi High Court in the case of CIT v. Hindustan Coca Cola Beverages (P) Ltd. 331 ITR 192. 4.3 The learned CIT(A) has erred in lightly disregarding various submissions filed by the Appellant during the course of appellate proceedings and in upholding the disallowance by wrongly and mechanically relying on decision in orders relating to subsequent years without citing any valid reasons. Further, the Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appe .....

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ct for short], the assessment was completed u/s 143(3) of the Act on 31/12/2008 on a total income of ₹ 31,04,68,388/-. 4. A survey was conducted in the business premises of the assessee-company on 5/11/2009. Assessments for assessment years 2006-07 and 2007-08 were completed post survey operations. Based on survey, the Assessing Officer [AO] issued notice u/s 148 dated 12/3/2010 proposing to re-assess the total income for the assessment year 2005-06. After receipt of notice u/s 148, the as .....

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ithdrawn. The reasons recorded by the AO for issuing notice u/s 148 are as under: The assessee filed return of income for the A. Y. 2005-06 on 31.10.2005 declaring an income of ₹ 28,94,18,182/-Assessment in this case was completed u/s 143(3) on 31.12.2008 determining a total income of ₹ 31,04,68,3881-. In this case a survey u/s 133A was conducted on 5. 11.2009 and during the course of survey, along with other issues, expenses debited to the P&L A/c were verified and it was found .....

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this agreement and it is found that the reply of the Managing Director to most of the queries were evasive in nature and surprisingly, to quote a few, he could not substantiate with whom from South Elegant he had interacted or even to say where this deal was entered into and when. Surprisingly this agreement was cancelled on 26.10.2005 though it was made for a period up to 2012 and the so called termination is done again through a three line letter and huge sum running into tens of crores rupee .....

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pany could not prove beyond doubt the necessity of such expenditure as this kind of expenditure is unknown in this line of trade. Accordingly in the order passed u/ s 143(3) for A. Y. 2006- 07 the expenses debited under this head of ₹ 10,68,71,384/ - was disallowed and added to the returned income. Similar nature of expenditure has been debited by the assessee company for the financial year 2003-04, 2004-05 also. On verification of records of the assessee for the A. Y. 2005-06 it was found .....

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Income-tax Act, 1961 for the A. Y. 2005- 06" 5. After receipt of reasons recorded, the assessee filed a letter dated 10/8/2010 stating that the return of income filed for the assessment year 2005-06 may be treated as the return in response to notice u/s 148. The assessee-company objected to the re-assessment proceedings before the AO on the ground that the re-assessment proceedings are merely prompted by mere change of opinion. The objections have been turned down by the AO and he proceede .....

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as been incurred wholly and exclusively for the purpose of business and should be allowed as deduction. In respect of nature of services rendered, it was stated as follows: The assessee company is involved in the manufacture of various types of woven garments and export the same to European markets. As European markets are highly fashion driven and difficult to penetrate. India caters to US markets and other markets as well. To penetrate European markets and in order to boost the penetration of .....

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the parties are through banking channel. The turnover for the year under assessment is close to ₹ 166,17,14,885/- and the same was capable of being achieved only on account of the support given by the agents of the assessee company in sending the timely information and support to ensure that orders are placed to the assessee company. The assessee company has paid the Commissioner to South Elegant Limited of Hong Kong and this party has not come to India to the best of their recollection. .....

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een mentioned that the rate of these charges are not unique and it depends upon the multiple factors like customers, season, product design etc., It has been clearly stated that no TDS is made as the services rendered is for procuring orders from oversea customers and hence the services are not rendered in India and the services are done entirely outside India and no part of the same requires TDS. The obligation of the agents is to identify customers abroad and send their full market report on t .....

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payment where effected to the parties are wholly and exclusively for the assessee's business activities and all necessary documents to substantiate and in support of payment filed. 7. The AO, after considering the above explanation, disallowed commission payment of ₹ 16,23,91,847/- observing as under: During the relevant year, it is seen from the relevant ledger extract filed that the entire payments of ₹ 16,93,91,847/- are to South Elegant Ltd., of Hong Kong and Gruyters Agentu .....

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rtise or man power to render the required services as per the agreement in Italy is again a mute point. A survey was undertaken in the business premises of the assessee company as the assessee had made huge payments under "Commission / delivery tracking charges" to this foreign company during the financial years 2003-04 to 2005-06 and other payments. During the course of Survey on 5.11.2009, a statement on oath of Shri. V. Sreedhar, General Manager (Fin) of the company was recorded con .....

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., are with Italian based companies though in a few cases the sales / purchases have been made from Netherland based companies also. Keeping this in view and the unsatisfactory reply forthcoming from the General Manager (Fin) and the Managing Director of the company, I hold that it is highly unlikely as to why the assessee company will pay such huge amount to non resident company at Hong Kong. I hold that the payment made to Gruyters Agenturen B.V and South Elegant of Hong Kong is not genuine pa .....

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authorized signatories and witnesses are being identifiable for examination the claim of the assessee that the payment was on the basis of contract is itself doubtful, The relationship between the payer and payee was not a live one because inspite of agreement between the parties, the payee SEL never visited the premises of appellant in India and such type of non living non-existent relationship itself gives a hunch that the payment is not genuine and the contract is only a window dressing to c .....

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riginal agreement dated 1.7.2002 could be found which itself could be held as an evidence that payment were for some other purpose and had not been on the basis of alleged contract or scheme of arrangement. This stand of revenue is further streghthened by the statement recorded u/s 131 from Mr. Kothari, CMD who expressed his ignorance about the existence of any such contract. Mr. Kothari is the CMD who is an all knowing person having full control over the activities of the appellant even if sitt .....

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eceive such payment. During the course of assessment proceeding the AR was asked to furnish proof as to confirm that such company own manpower, machineries and technology to provide the tracing services but no proof was furnished. It is not out of place to mention here that on the similar issue an addition of ₹ 10,68,71,384/- was made for the AY 2006-07 and against this order assessee preferred appeal and this ground of appeal was dismissed by the CIT(A) vide ITA No. 63 & 97/DC 11(3)/A .....

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statement, the audit ports etc. etc. either at assessment stage or at the stage of appeal though the onus of proving the genuineness of transaction was with the assessee. - No evidence in support of the claim is produced as to South Elegant Limited had enough manpower, machineries and technology to provide the tracking services. For the above reasons, the claim of the assessee for the expenditure of ₹ 16,93,91,847/- representing 49- Sales" is disallowed and added to the total income. .....

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to disclose truly and fully all material facts. Merely because the claim was accepted in the original assessment, that would not preclude the AO from reopening the assessment. The CIT(A) also upheld the disallowance of commission expenditure of ₹ 15,93,91,842/- citing that the outstanding amount of commission payable is much more than the commission paid. Therefore, this would create doubt as to genuineness of the commission expenditure. He also disallowed depreciation on goodwill on the g .....

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AO, submitted that the reasons are vague allegations which were not supported by any material on record and no reassessment proceedings can be initiated based on mere suspicion. He further submitted that the validity of reassessment proceedings has to be tested only based on the reasons recorded. In support of this proposition, he relied on the decision of the Hon ble Apex Court in the case of Sheonath vs. ACIT (82 ITR 147) and the decision of Bombay High Court in the case of Hindustan Lever Ltd .....

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the AO during the course of the original assessment proceedings in support of the claim for deduction of commission expenditure: (i) copy of the agreement (ii) audited financial statement (iii) invoices raised and (iv) proof of payment through banking channel, He controverted the allegation of the AO that discreet enquiry revealed non-existence of the service provider. He further submitted that the agreement copy with service provider was produced before the department during the course of TDS .....

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vehemently submitted that the re-assessment proceedings were validly initiated as the AO failed to examine the aspect of rendering of services by the recipient of the commission payment. As a result of survey operations, it was found that no agreement was found and the assessee failed to establish that services were actually rendered by the recipients of commission payment during the assessment proceedings for the assessment year 2006-07. Information in the subsequent assessment constitutes val .....

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191 taxmann 333 (Ker.) 7) CIT Vs MAA Communication Bozell Ltd. [2014] 43 taxmann.com 160 (Kar.) 8) Powerdeal Energy Systems India Pvt. Ltd. Vs Asst. CIT [2015] 127 taxmann.com 454 (Bom.) 9) Innovative Foods Ltd. Vs Union of India [2013] 37taxmann.com 463 (Ker.) 10) CIT Vs National Tyres & Rubber Co. of India Ltd. [2011]] 5 taxmann.com 3 (Ker.) 11) Smt. Jyothi Devi Vs ITO (ITA No. 1352/B/2014) (ITAT, Bang.) 11. We heard rival submissions and perused the material on record. We shall now at fir .....

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O by seeking information as to the nature, name and address of the service provider and mode of payment, details of payment etc., but undisputedly the AO had not inquired into the aspect of rendering of services by the recipient of the commission payment. The AO sought to reopen the assessment on the ground that during the course of survey operations conducted on 5/11/2009, it was found that the assessee-company had incurred huge expenditure in the nature of Info Tracking and Delivery schedule, .....

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enditure was not proved by the assessee to the satisfaction of the AO. It was further stated by the AO that during the course of assessment proceedings for the assessment year 2005-06, the assessee-company could not establish or prove beyond doubt the necessity of such expenditure. Therefore, the AO inferred that the expenditure claimed for the assessment year 2005-06 is not allowable as genuine expenditure and issued notice u/s 148 of the Act. It is trite law that the validity of re-assessment .....

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s or occasioned by change in opinion but must be based on some tangible and credible material based on which a reasonable belief could be formed that income of assessee has escaped assessment. It is equally settled law that the provisions of sec.147 require the AO to have a reason to believe and not a reason to suspect. The another important requirement of law is that AO should not form opinion or reason to believe that income escaped assessment must not be the same material which had been consi .....

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the assessee-company gave evasive replies concerning this transaction/agreement. c) The agreement was subsequently cancelled on 26/10/2005 and termination fee was paid. d) The assessee-company could not prove beyond doubt the necessity of such expenditure. e) The addition was made on similar item during the assessment proceedings for the assessment year 2006- 07. f) This issue was not examined during the course of original assessment proceedings for the assessment year 2005- 06. 14. Now, we sha .....

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s for reopening the assessment. The Hon ble Supreme Court had an occasion to deal with the validity of the re-assessment proceedings in a case where the re-assessment was based on the report of a District Valuation Officer. The Hon'ble Supreme Court held that the opinion cannot be a basis for re-assessment proceedings and it has to be based on the facts [ACIT vs. Dhariya Construction Co. (328 ITR 515)]. Therefore, this reason, as recorded by the AO, cannot form the basis for the reason to be .....

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ment? In this context, we may state that it is not necessary under law that every contract must be in writing and there can be equally binding contract between the parties on the basis of oral agreement unless there is a law which requires the agreement in writing [Tarsem Singh vs. Sukhminder Singh reported in AIR 1998 SC 1400]. It is also not an essential condition that an agreement in writing should be the basis for the allowance of an expenditure on commission payment. Therefore, nothing emer .....

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penditure for the purpose of considering the allowability of such expenditure. Please refer to the decision of Hon ble Supreme Court in the case of Eastern Investment Ltd. v. CIT 20 ITR 1. The above principle was reiterated and followed by the Hon ble Delhi High Court in the case of CIT vs. EKL Appliances Ltd.(345 ITR 241) wherein it was held as follows: 19. ……….It has been held by our courts that it is not for the revenue authorities to dictate to the assessee as to how he .....

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Section 12(2) of the Income Tax Act". It was further held in this case that "it is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned". InCIT v. Walchand & Co. (P.) Ltd. [1967] 65 ITR 381 (SC), it was held by the Supreme Court that in applying the test of commercial expediency for determining whether the expenditure was wholly and exclusively laid out for the purpose of business, reasonableness of the expenditure has to be jud .....

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equire the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if it has resulted in any income or profits came to be considered by the Supreme Court again in CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC), and it was observed as under: - "We fail to appreciate how expenditure which is otherwise a proper expenditure can cease to be such merely because there is no receipt of income .....

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s somewhat narrower than the language employed in Section 37(1) of the Act. This fact is recognised in the judgment itself. The fact that the language employed in Section 37(1) of the Act is broader than Section 57(iii) of the Act makes the position stronger. 20. In the case of Sassoon J. David & Co. (P.) Ltd. v. CIT[1979] 118 ITR 261 / 1 Taxman 485 (SC), the Supreme Court referred to the legislative history and noted that when the Income Tax Bill of 1961 was introduced, Section 37(1) requir .....

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iture incurred by him for the purpose of business carried on by him has actually resulted in profit or income either in the same year or in any of the subsequent years. The only condition is that the expenditure should have been incurred "wholly and exclusively" for the purpose of business and nothing more. ………. Having regard to the above settled principles of law, this cannot be a basis to form a belief income escaped assessment (e) One of the six reasons given by .....

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filed by the assessee-company before the ld.CIT(A) was dismissed. On further appeal before the Hon ble Tribunal, prayer of the assessee-company for admission of additional evidence in support of services rendered by the foreign agents came to be accepted by the Tribunal and the matter was restored to the file of the AO for fresh adjudication. The relevant paras viz paras 5.10 to 5.12 of the assessment order for assessment year 2006- 07 are reproduced below: 5.10 The assessee company is engaged i .....

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t typed on plain paper running to five pages whereas any document which has financial implication is always done on a stamp paper. This is in contrary to normal practice adopted globally. ii. It is not a registered or notorised document. Any document to have legality needs to be notorised which is not the case here. iii. It is mentioned as Service Agreement made on 1st July 2002. iv. The place where this agreement is made is not known which is in fact a mandatory requirement. v. The authority be .....

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ve affixed their signature. ix. There is a clause in the agreement which mentions that the agreement shall be governed by the laws of Hong Kong and that each party submits to the non exclusive jurisdiction of Hong Kong Courts which is not very much clear with regard to enforcement of the terms of the agreement. x. The recital para is cryptic and it is simple containing only two brief clauses mentioning (a) that SEL is a sourcing agent for orders and that it has to provide services on information .....

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n payment to SEL three times the last calendar years commission which is at the outset unreasonable considering the automatic renewal clause available only for a period of one year after 01.07.2012. xiii. It is seen from the letter dated 18.10.2005 that the compensation payable for the termination of the agreement has been calculated with reference to the commission payments of the calendar year 2004 which is maximum since the agreement is entered. xiv. When there is a separate letter of arrange .....

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cument. The discreet enquiries caused revealed that the South Elegant of Hong Kong is likely to be a nonexistent concern. Further, without accepting and for a while it is assumed that there existed a concern by said name at Hong Kong, from the explanation given by the assessee company in its various replies whether the said concern had necessary infrastructure or expertise or man power to render the required services as per the agreement in Italy is again a mute point. A survey was undertaken in .....

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above payment, genuineness thereof and the business relevance of the expenditure. Later, the said points were confronted to Mr. Anupam Kothari, Managing Director of the company who also could not satisfactorily explain the various aspects. The Managing Director of the company (Mr. Anupam Kothari) has been living in Italy/Monte Carlo since last 10 years and the major dealings of the company including the export of finished garments and import of fabric etc., are with Italian based companies thoug .....

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h Elegant of Hong Kong is not genuine payment and it is not wholly and exclusively incurred for earning the business income of the assessee company. Apart from this, I hold that payment of whopping "termination fees" of ₹ 18,35,79,000/- to Hong Kong based company is highly unreasonable. Further, the expenditure in the nature of tracking delivery charges have not been seen in any other similar export cases. (i) Without going into the correctness or otherwise of the above observati .....

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er, as extracted above. (ii) The Hon ble Supreme Court in the case of Ess Ess Kay Engg. Co.(P) Ltd. Vs. CIT (247 ITR 818) and Phool Chand Bajrang Lal vs. ITO (203 ITR 456) held that information obtained in the subsequent assessment proceedings could lead to a belief that income chargeable to tax had escaped assessment even though the transaction in question had been examined during the course of original assessment proceedings. This ratio was followed by the Hon ble Bombay High Court in the case .....

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that in the absence of fresh tangible material in the subsequent assessment proceeding, the subsequent assessment order cannot be basis for reopening the earlier assessment order. (iv) The facts in that case are that during the course of original assessment proceedings for assessment year 2004-05, the AO had called upon the assessee to give details of labour charges which were made available along with the details of the quantum of work done, TDS amount and bills etc., and the AO accepted the cl .....

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he matter to the Hon ble High Court where the Hon ble High Court held that the claim for deduction of labour charges was the subject matter of enquiry during the regular course of assessment proceedings. The AO considered the available material on records and formed an opinion that the claim is allowable. In the absence of any fresh tangible information or material obtained in the subsequent assessment year warranting reopening of assessment, the re-assessment proceedings were declared to be uns .....

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ter dated 13th September, 2006 (referred in the order of CIT(A) made available details of labour charges along with the quantum of work done by each of the labour contractor, the TDS amount on the labour charges and the sample bills. It is only after Assessing Officer was satisfied with the claim of labour charges that he accepted the claim of the Respondent-Assessee in regular assessment proceedings. In the following Assessment Year i.e. A. Y. 2005-06, the labour charges has been disallowed to .....

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ssment proceedings by the Assessing Officer. The decision relied upon by the Revenue in the matter of Multiscreen Media (supra) was considered by this Court in its subsequent decision in NYK Line (India) Ltd. v. Dy. CIT [2012] 346 ITR 361/211 Taxman 185 (Mag.)/28 taxmann.com 229 wherein the at para 18 the following observations is made:- "18:- Consequently and in this background the mere fact that the Assessing Officer for the assessment year 2007-08 had come to a different conclusion would .....

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ear 2006-07. That indeed is not the case of the Revenue. All material which was relevant to the determination was available when the assessment was completed for the assessment year 2006-07. Consequently, the mere formation of another view in the course of assessment proceedings for the assessment year 2007-08 would not justify the Revenue in reopening the assessment for the assessment year 2006-07 though the reopening of the assessment has taken place within a period of four years. The power to .....

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imilar to NYK Line (India) Ltd. (supra). The view in the following Assessment Year that the labour charges paid were excessive is not tangible material but opinion/view on the material available for the next year. In this case, the labour charges paid by the Respondent for Assessment Year 2004-05 was subject matter of enquiry during the regular assessment proceedings. This enquiry was in the context of the fact that there were outstanding labour charges payable as was evidenced from the Responde .....

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bove decision is that the subsequent assessment order can be basis for re-opening of the earlier assessment order only in the event fresh tangible information was brought on record in the subsequent assessment years contrary to the material already on record in the earlier assessment year. (v) The facts of the present case are similar to the above cases dealt by the Hon ble High Court of Bombay. Therefore, in the absence of any fresh tangible information brought on record in the assessment year .....

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above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from 1st April, 1989), they are given a goby and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give .....

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ent of certain preconditions and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, the Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is es .....

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t;, Parliament reintroduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. Therefore, any re-assessment proceedings initiated on the basis of very same material which was before AO, without any tangible material, amounts to change of opinion. The Hon'ble Supreme Court in the case of Phool Chand Bajrang Lal v. ITO (203 ITR 456) explained the tangible material as under: "Acquiring fresh information, .....

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, reiterated the above position that in absence of any fresh tangible material, subsequent assessment cannot be the basis for reopening the assessment for earlier assessment year. (vii) In the instant case, AO had drawn fresh inference on the same set of facts which were available with AO. AO had not referred to any fresh material or information which led him to believe that income escaped assessment. Therefore, the assessment order for assessment year 2006-07, in the instant case, cannot be the .....

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as well as the details filed by the assessee before the AO during the course of original assessment proceedings. It cannot be said that the AO is not aware of the claim at the time of original assessment proceeding, as he himself called for details of expenditure incurred on this commission payment. It is only after perusing the information filed, he chose not to make any addition on this item. Therefore, applying the ratio of the decision of the Hon ble Bombay High Court in the case of Idea Ce .....

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titioner in his final assessment order, it cannot be said that he had no applied his mind when all material was placed by the petitioner before him. (ii) It is also settled law that once the return is picked up for scrutiny and the assessment was framed u/s 143(3) of the Act, and the accounts of the assessee were subjected to detailed examination by the AO, it amounts to disclosure of full and true material facts which are necessary for assessment proceedings. (iii) The Hon ble Supreme Court, in .....

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facts or law, should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences - whether of facts or law - he would draw from the primary facts. The above decision was subsequently referred by the Hon'ble Supreme Court in the case of CIT vs. Burlop Dealers Ltd. AIR 1971 SC 635 and held that if the assessee disclosed primary facts relevant to as .....

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AO to reopen the proceeding without anything further as that would amount to giving a premium to an authority exercising quasi-judicial function to take benefit of its own wrong . (v) In CIT v. Usha International Ltd (348 ITR 485) (Del), Full Bench of the Hon ble Delhi High Court observed that there can be cases where an AO may not raise any written query but still the Assessing Officer in the first round/original proceedings may have examined the subject matter because the aspect or question m .....

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which material fact was not disclosed by the Assessee in the course of the original assessment under Section 143(3) of the Act failing which there should not be any reopening of the assessment. (vii) In Oracle Systems Corporation v Asst. DIT (235 Taxman 337) the Hon ble Delhi High Court reiterated the settled legal position that once a regular assessment is completed in terms of Section 143(3), a presumption can be raised that such an order was passed by the AO on a proper application of mind. .....

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tled principle of law that re-assessment proceedings cannot be initiated for failure of the AO at the time of original assessment proceedings. (x) Even otherwise, AO is a quasi-judicial authority, which is expected to exercise statutory functions on objective criteria, cannot act on the dictates of any superior authority or on any instructions that may be issued by an authority that may have an administrative control over the AO. It is only at the sole discretion of the assessing authority, an e .....

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