Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 685 - ITAT BANGALORE

2016 (10) TMI 685 - ITAT BANGALORE - TMI - Reopening of assessment - Additions u/s 40(a)(ia) for non deduction of TDS - contention of the assessee-company that there was no fresh information which enabled the AO to form opinion that income escaped assessment cannot be accepted, as information had come to the knowledge of AO that the provisions of section 10(23G) were omitted w.e.f. 1/4/2007 during the course of subsequent assessment proceedings - Held that:- Hon’ble Supreme Court in the case of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nator of India Ltd., (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) is misplaced, as there is no opinion formed in the original assessment proceedings on the issue of claim of examination of tax free interest u/s 10(23G) of the Act. Therefore, we hold that initiation of re-assessment proceedings u/s 147 is valid in law. - Additions u/s 40(a)(ia) for non deduction of TDS - provision for royalty, fees for technical service etc - reversal of provision for contractor and professional fee etc. - cla .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

failed to link provision reversed with the amount of provision originally created and disallowed. The CIT(A) also observed that the assesseecompany had expressed its helplessness to establish the link between original provision and reversal provision during the year under consideration. In the circumstances, the CIT(A) has confirmed the addition. Even before us, assessee-company had not made any attempt to prove nexus between amount of provision created which was disallowed in earlier years and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tween amount disallowed suo motu, provisions of section 40a(ia) and the amount reversed during the year under consideration, we have no option but to confirm the action of the AO making the addition on the same. - Decided against assessee. - ITA No.1124/Bang/2014 - Dated:- 26-8-2016 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER and SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Appellant : Shri T.Suryanarayana, Advocate. For The Respondent : Shri Sanjay Kumar, CIT(DR). ORDER Per INTURI RAMA RAO, AM : T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aterial evidence existing on records. 2. Re-assessment proceedings bad in law 2.1. On the facts & in the circumstances of the case, the Ld. CIT-(A) grossly erred in law and in fact in confirming the validity of the reassessment proceedings undertaken by the Assessing Officer u/s 147. 3. Dis allowance of deduction claimed on account of reversal of provisions 3.1 On the facts and in the circumstances of the case, the Ld. CIT-(A) erred in sustaining disallowance made by the AO of ₹ 52,767 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cumstances of the case, the Ld. CIT-(A) erredin not directing the AO to drop the initiation of penalty proceedings when there is no concealment of income or filing of inaccurate particulars. The Appellant craves leave to add to or alter, by deletion, substitution or therwise, the above grounds of appeal, at any time before or during the hearing of the appeal. The Appellant submits that the above grounds are independent and without prejudice to one another. 3. Briefly facts of the case are as und .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f ₹ 849,71,54,003/-. Subsequently, the Assessing Officer [AO] had come to know during the course of assessment proceedings for the assessment year 2009-10 that the assessee claimed exemption of interest-free tax bonds of ₹ 105,00,450/- under the provisions of section 10(23G) of the Act for the assessment year 2008-09. Since provisions of sec.10(23G) of the Act were omitted by the Finance Act, 2006 w.e.f. 1/4/2007, the AO formed a belief that income escaped assessment for the assessme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s letter dated 7th May 2013. After issuing notice u/s 143(2) dated 24/5/2010, assessment was completed by the AO at a total income of ₹ 853,57,05,824/- after disallowing tax-free interest claimed, as exempt u/s 10(23G) of ₹ 105,00,550/- and an amount of ₹ 6,06,79,000/- was also added back as no tax at source was deducted on payments to contractors and professionals on technical fee. Royalties, trade mark etc. and an amount of ₹ 14,21,28,000/- was added back as being impor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eri Stock Brokers (P) Ltd. (2007) (291 ITR 500) (SC) • ITO vs Lakhmani Mewal Das (1976) (103 ITR 437) (SC) • Pirojsha Godrej Foundation vs ACIT (ITA No. 1976/Mum/08) • Calcutta Discount Co. Ltd. vs ITO (1961) (41 ITR 191) • CIT vs Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) • CIT vs SR Construction (2002) 257 ITR 502 (MP) • Techno craft industries and Others vs JC shan, Second Income-tax Officer and Others (186 ITR 514) (Bom-HC) • Rallis India Ltd. vs ACIT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

llowance of claim for exemption u/s 10(23G) was confirmed by the CIT(A). The CIT(A), while dealing with disallowance of deduction on reverse of provisions observed as follows: 6.4 I have examined the appellant's arguments as above but am unable to agree with them since the suo-moto disallowance of the provision by the assessee in the year when the provision was made was not a disallowance of contingent liability u/s 37 but a disallowance of an amount on which, admittedly, deductible tax had .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd filed IT return thereon the appellant was also liable to be considered an assessee in the default u/s 201(1) of the IT Act. 6.5 For the amounts credited to a provision account (akin to a suspense account) but without TDS the assessee was required to furnish party wise details with invoice date and amount showing the actual basis for payment in later years with appropriate tax deduction at source. This is the correct legal basis for allowing any claims related to the original provision in subs .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ertaining to older periods. In view of this non-verifiability I hold that the deduction claimed on the basis of written back provision was not correct and, infact, even the verification of whether the amounts indeed constituted surplus provision has not been possible. The disallowance is, therefore, confirmed. 5. Being aggrieved, assessee-company is before us in the present appeal. 5.1 Learned counsel for assessee-company contended that the very claim of exemption of tax-free interest under the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es & Fabrics International Pvt. Ltd. vs. DCIT in ITA No.1352/Bang/2014 dated 10/2/2016 for the proposition that an erroneous order passed by the original AO does not give jurisdiction for re-assessment proceedings. Thus, he submitted that the very re-assessment proceedings are not valid in law. Without prejudice to this, learned counsel for assessee-company submitted that that the claim for deduction of provision of written back was allowable as in the year in which provision was created the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act, 2006 w.e.f. 1/4/2007, were brought to the notice of the AO only during the course of assessment proceedings for the assessment year 2009-10. Discovery of this information enabled the AO to form opinion that income had escaped assessment. Therefore, the ratio of the decision of the Hon ble Supreme Court in the case of Kelvinator of India Ltd.,(supra) cannot be applied. As regards merits, the CIT(DR) submitted that the assessee-company had failed to discharge the onus of providing that rever .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot be accepted, as information had come to the knowledge of AO that the provisions of section 10(23G) were omitted w.e.f. 1/4/2007 during the course of subsequent assessment proceedings. As held by the Hon ble Bombay High Court in the case of Multiscreeen Media (P) Ltd. vs. Union of India & another (324 ITR 54). Even the Hon ble Supreme Court in the case of Ess Kay Engineering P.Ltd. vs. CIT (247 ITR 818) Phool Chand Bajrang Law & another vs. CIT(203 ITR 456) held that information obtain .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(23G) of the Act. Therefore, we hold that initiation of re-assessment proceedings u/s 147 is valid in law. 7. Now, coming to merits of the addition of ₹ 5,27,67,000/- on account of reversal of provision for royalty, fees for technical service etc., of ₹ 79,12,000/- on account of reversal of provision for contractor and professional fee etc., it is the claim of the assessee-company that these amounts were disallowed u/s 40a(ia) suo motu for non-deduction of tax at source. In the year .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version