TaxTMI 
TaxTMI 
2012 (12) TMI 785
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....ribunal was right in holding that jurisdictional pre-condition for issuance of notice under Section 147/ 148 of the Income Tax Act, 1961 are not satisfied in the present case and, accordingly, the re-assessment proceedings are bad in law?" 2. The assessee entered into a master licensing agreement ("MLA") on 01.01.1996 with McDonalds India Private Limited ("MIPL"). In terms of that arrangement the MIPL was granted non-exclusive right to use the McDonald‟s system at agreed locations in India. The terms also required MIPL to pay the assessee initial franchise fee of USD 45000 upon the opening of each restaurant and royalty on recorded monthly sales of each restaurant during the period. For the relevant assessment years i.e. 2000-01 an....
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....anent establishment situated in the other state, such income is taxable as business income in accordance with the domestic provisions of the state of source. As per article 5(1) and 5(2) of Double Taxation Avoidance Agreement "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on and it includes „a place of management‟. Therefore, in such case section 44D of I.T. Act, 1961, should be applied. Under section 44D read with section 115A of the Income Tax Act, Royalty or Technical Fee received by a foreign company from Government or Indian concern under an agreement made before 31st May, 1997 is to be taxed at the rate of thirty percent. Hen....
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....ad been initiated on the same material. The A.O. in the reasons recorded has not recorded satisfaction that there was a failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment. In the absence of such reasons, the assessment-framed falling under the proviso to Section 147 have to be declared bad in law. In the instant case, original assessment was made u/s 147/ 143(3) on 7.3.2005 and assessment could be reopened under main provisions of Section 147 within the period of 4 years from the end of the Assessment Year in which the income was first assessable. For the Assessment Year 2000-01, the assessment could have been reopened under the main provisions of Section 147 by 31.03.2005 and....
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....on "reason to believe" cannot be read as implying that Assessing Officer should have finally ascertained the fact by legal evidence or conclusion and that the final outcome of the proceedings is not relevant so long as basic facts are before the assessing officer to infer that some income exists which had escaped assessment. The observations of this Court in Honda Siel Power Products Ltd. (supra) particularly were highlighted as under: - " 10. Thus, the petitioner has accepted and admitted that he had not given details with regard to proportionate expenses relatable to tax free or exempt income, which were claimed as a deduction under the cumulative head "expenditure". It is pleaded and stated that the petitioner was not required to disc....
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.... going through the material concluded that the rate of taxation was 15% in the reassessment proceedings. The scope was the same as in the original proceeding and in the first reassessment proceedings i.e. the taxability of the royalty income under section 44D. Having regard to these, this Court is of the opinion that the declaration of law by the Supreme Court in Calcutta Discount Co. v. ITO, (1961) 41 ITR 191 applies; squarely to the facts in this case it was held by the Supreme Court that the duty of the assessee to make full disclosure extends to primary facts. Once that is done, it is the Assessing Officer‟s duty to draw the conclusion and inference flowing from the disclosure so made. This aspect was highlighted in the following ....