TMI Blog2018 (9) TMI 1890X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that there is a live connection and the reasons to reopen is interdependent and interwoven with the addition made then said additions are sustainable in the eyes of law. - I.T.A. No. 1339/Bang/2018 - - - Dated:- 14-9-2018 - SHRI. JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER For the Assessee : Shri. Lokesh Jain, CA For the Revenue : Dr.P. V. Pradeep Kumar, Addl. CIT ORDER PER LALIET KUMAR, JUDICIAL MEMBER : The present appeal is filed by the assessee against the order of the CIT (A), Bengaluru -6, Bengaluru, dt.30.11.2017, for the assessment year 2005-06, on the following grounds : 02. Brief facts are, the assessee is a company registered under the Companies Act, 1956. It filed the return of income for the assessment year 2005-06 declaring total taxable income of ₹ 1,31,078/-. The case of the assessee was reopened and notice u/s.148 of the Act was issued. In para 2, the AO mentioned the broad reasons for reopening of the assessment. From the reading of above it is clear that the assessee has neither asked for the reasons for reopening nor has filed objection to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nify that unless the AO assesses the income with respect to which he has formed reason to believe within the meaning of section 147, it would not be open for him to assess or reassess any other income Chargeable to tax which has escaped assessment. It is contended that the AO, having reopened the case on the ground that the expenses incurred in foreign currency (being deputation expenses) were not reduced from the export turnover, concluded the assessment on the basis of his other findings...This question would have arisen in a case where the AO, having reopened the assessment to examine the claim of exemption u/s 10A, did not examine the claim and assessed some other income not connected with the claim of exemption u/s 10A. On the contrary, what the AO disallowed is the claim of exemption u/s 10A and nothing else. It is only in connection with the examination of claim u/s 10A that the AO conducted enquiries, which the assessee is calling a 'roving enquiry'. The case of Ranbaxy laboratories Ltd. Vs. CIT was a case. where there was no live nexus between reasons recorded and the assessment framed. The incomes believed to have escaped assessment in that case were the items lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the basis of above it was submitted by AR that reasons for reopening and reasons for passing the reassessment order were different. We would be summarising the two in the following table : Reasons for reopening Grounds for additions/disallowance The assessee has not excluded the expenses incurred in foreign currency for delivery of software from the export turnover for the purposes of computing the deduction u/s.10A of the Act It was further held by the AO that export made from India was not in fact export of software or rendering the software consultancy services to earn foreign exchange, rather the assessee has transferred the money from its branch to another branch by giving its colour of export. It was submitted that the reason for reopening was not at all relatable to the addition made by the AO. It was submitted that it is not open for the AO to make addition on the grounds which are not relatable to the grounds for reopening of the assessment. Our attention was drawn by the Ld. AR to the judgment of the Hon ble Bombay High Court in the matter of CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. If he intends to do so, afresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee. .... 41. If there is ambiguity in the main provision of the enactment, it can be clarified by insertion of an Explanation to the said section of the Act. Same has been done in the present case. Section 147 of the Act was interpreted differently by different High Courts, i.e., whether the second part of the section was independent of the first part, or not. To clarify the same, Explanation 3 was inserted by which it has been clarified that the Assessing Officer can assess the income in respect of any issue which has escaped assessment and also 'any other income' (of the second part of section 147) which comes to his notice subsequently during the course of the proceedings under the section. After the insertion of Explanation 3 to section 147 it is clear that the use of the phrase and also between the first and the second parts of the section is not conjunctive and assessment of 'any other income' (of the second part) can be made independent of the first part (relating to 'such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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