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2018 (2) TMI 877

Reopening of assessment - Privilege fee paid by the petitioner/Corporation to the State Government to enjoy the exclusive privilege to sell liquor in the State of Tamil Nadu - allowable deduction in terms of Section 37 - change of opinion - Held that:- Impugned reopening proceedings and the consequential assessment orders pertain to the very same assessment years, which were subject matter of appeals before the Tribunal, in which the assessee has succeeded. Thus, for the above reason, hold that .....

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yable by the petitioner therein viz., Karnataka State Beverages Corporation Ltd., which is some what similar to the petitioner/Corporation, to the State Government would be taxable with effect from 01.04.2004 and not prior thereto - Decided in favour of assessee - W.P.Nos.7598 & 7599 of 2015 and M.P.Nos.1 & 1 of 2015 - Dated:- 18-1-2018 - T. S. Sivagnanam, J. For the Petitioner : Mr.Vijayaraghavan for Mr.Subbaraya Aiyar For the Respondents : Mr. J. Narayanaswamy, Senior Standing Counsel ORDER He .....

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e Hon ble Supreme Court in Deputy Commissioner of Income Tax v. Divya Investment Private Limited, [2007] 15 SCC 99. As such preliminary issue has been raised, I propose to consider the same at the first instance. 4.Admittedly, regular assessment for the subject assessment years were completed and orders have been passed against the petitioner, which were challenged by the petitioner by way of appeals before the ITAT in ITA Nos.1367 to 1370/Mds/2012, and those appeals were allowed by the Tribunal .....

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, for which the petitioner has submitted objections on 10.02.2015. 6.In terms of the decision of the Hon ble Supreme Court in GKN Driveshafts (India) Ltd. vs. ITO reported in [2003] 259 ITR 19, the respondent/assessing officer was expected to pass a speaking order and if aggrieved, the assessee is entitled to challenge the same. This procedure has been given a go-by. This defect committed by the assessing officer goes to the root of the matter thereby affecting the very validity of the impugned .....

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edings and the consequential assessment orders pertain to the very same assessment years, which were subject matter of appeals before the Tribunal, in which the assessee has succeeded. Thus, for the above reason, I hold that these writ petitions are maintainable. 8.The next aspect to be seen is as to whether the impugned reopening proceedings and the consequential assessment orders are outcome of change of opinion. The manner in which the same has to be considered has been laid down in several d .....

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in which the Government order is dated/passed. 10.By way of illustration, G.O.Ms.No.65 dated 27.10.2005 was passed fixing the amount as 43.37 instead of 46.35 . Though this Government Order was issued in October, 2005, it was given retrospective effect from 01.04.2004. The Tamil Nadu Government has power to issue such retrospective notification in terms of Rule 2a of the Tamil Nadu Indian Made Foreign Spirit (Supply by Wholesale) Rules, 1983. Therefore, the issue before the assessing officer wa .....

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r/Corporation, to the State Government would be taxable with effect from 01.04.2004 and not prior thereto. It was further held that unreasonable privilege fee payable is also not a ground to hold that it is a device by which the petitioner and the State Government are avoiding payment of tax. In this regard, reliance was placed on the decision of the Hon'ble Supreme Court in the case of Har Shankar v. Deputy Excise and Taxation Commissioner AIR 1975 SC 1121. Ultimately, the Court set aside t .....

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that appeal has been preferred as against the said order passed by the ITAT. 13.In any event, as on date, there is no order of stay operating against the said decision of the Tribunal and it will bind the assessing officer and judicial discipline demands that the assessing officer follows the decision of the Tribunal, unless it is set aside or reversed. Thus, I am fully convinced that the impugned reopening and the consequential assessment orders are a clear case of change of opinion. 14.As poi .....

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