2012 (2) TMI 282

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....61 the assessment of the Petitioner for Assessment Year 200405 is sought to be reopened. 3 The Petitioner entered into an agreement of agency on 1 April 1993 with a non resident shipping line of which the Petitioner is a wholly owned subsidiary. Under the agreement, the Petitioner undertook the obligation, interalia, to render services relating to vessel operations and collection and remittance of freight. The Petitioner is paid commission as compensation for services rendered. The Petitioner collects Container Detention Charges which are levied on importers of goods. On 15 September 1993, the Reserve Bank of India (RBI) issued a circular setting out modalities for appropriation of Container Detention Charges (CDCs) collected. Under the ci....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r disclosure was made by the Petitioner in the notes forming part of the accounts. The Assessing Officer had issued a questionaire requiring disclosure of details of agency commission together with a copy of the agreement with the principal. Details were also sought of the amount of expenditure in foreign currency and of the amounts remitted to the principal. An order of assessment was passed under Section 143(3) for Assessment Year 200304 on 21 March 2006. 7 For the Assessment Year in question, Assessment Year 200405, an order of assessment was passed by the Assessing Officer on 22 December 2006. The Petitioner entered into an addendum with its foreign principal on 25 May 2009 authorizing the Petitioner to retain administration charges ou....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....g company whereas in reality it should have shown as part of the receipts of the assessee company. The amount for the year is Rs. 1,16,89,636/. This amount was added as income of the assessee company in the security assessment for A.Y. 200708. The facts being the same, similar treatment has to be given for this amount in A.Y. 200607." 9 The learned counsel appearing for the Petitioner submitted that (i) the reopening of assessment is beyond a period of four years. Consequently, in order to satisfy the jurisdictional requirement under the proviso to Section 147, there has to be a failure on the part of the Assessee to disclose fully and truly all necessary facts for assessment for that Assessment Year; (ii) As a matter of fact the Petition....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....led where an assessment is sought to be reopened beyond a period of four years is that there must be a failure on the part of the assessee to disclose fully and truly all necessary facts for assessment for that Assessment Year. While filing the return, the Petitioner clearly disclosed, in the notes forming part of the accounts, that the Reserve Bank of India while granting its permission for remittance of Container Detention Charges to the principal had allocated an amount of US $ 1.5 per day per container as administration charges for the agent out of nonremittable funds. At that stage, it was disclosed that the agreement between the Petitioner and its foreign principal did not contemplate retention of the aforesaid amount. Such a disclosu....