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FRESHTROP FRUITS LTD Versus DEPUTY COMMISSIONER OF INCOME TAX - CIRCLE - 2 (1) (1)

2016 (8) TMI 769 - GUJARAT HIGH COURT

Re-opening of assessment - TDS u/s 195 - Held that:- It was only after such detailed scrutiny that the Assessing Officer passed the order of assessment in which he made no additions on the ground of failure to deduct tax at source. It is true that he has not discussed this issue actively in the order of assessment. However, this would not change the position insofar as the question of scrutinizing the issue is concerned. Any attempt on his part to reopen the assessment would thus be on a change .....

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etitioner has challenged the notice dated 10.3.2016 under which the respondent - Assessing Officer reopened the petitioner s assessment for the Assessment Year 2011-12. 2. The petitioner is a company registered under the Companies Act. For the Assessment Year 2011-12, the petitioner filed a return of income on 28.9.2011 declaring total loss of ₹ 2.11 crores. The revised return was filed on 9.2.2012 making minor adjustment of the loss. Such return was taken in scrutiny. During which process .....

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u/s.143(3) of the Act on 31.12.2013 at the loss of ₹ 2,08,76,673/-. On verification of records it was seen that the assessee has paid sales commission of ₹ 21730509/- to nonresidents without deducting TDS u/s 195 of the Act. Failure to deduct TDS attracts provision of Section 40(a) (i) under which any sum payable to a foreign company on which tax is deductible at source under Chapter XVIIB. Thus the assessee has clearly made the default for non-deduction TDS on the commission of  .....

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he petitioner thereafter filed objections dated 4.2.2016 which were rejected by an order dated 6.5.2016. 3. From the record, it can be seen that the notice for reopening has been issued within a period of 4 years from the end of relevant assessment year in a case where previously the assessment was framed after scrutiny. In the reasons recorded by the Assessing Officer, he refers to only one ground, namely, failure of the assessee to deduct tax at source on the sales commission paid to a non-res .....

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XVII-B of the Income-Tax Act,1961. The details of the TDS deducted and deposited to the Government account are mentioned in Anneuxre-O. 38. Details of Foreign selling expenses are provided in prescribed format as Annexure-AG. Foreign selling expenses incurred due to increase in turnover of the company as compared to previous year. Looking to the nature of the expenditure no contracts have been entered into. 5. It appears that the Assessing Officer not being satisfied with so much of material, ye .....

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ajority of the sales is on consignment basis. We sent our goods to our foreign agents who handle the clearing and forwarding, custom duty, sea freight, storage and warehousing expenses on our behalf. They also handle sales to the foreign parties and also send us payment from the said parties for all these services we pay them commission. Such expenses incurred by foreign agents are booked as foreign selling expenses which includes clearing and forwarding, customs duty, sea freight, storage and w .....

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