TaxTMI 
TaxTMI 
2013 (9) TMI 365
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....ection 143(3) was completed on December 29, 2006 determining the total income at Rs.5,48,34,61,386. Aggrieved against the assessment order, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), LTU impugning the assessment order dated December 29, 2006. During the pendency of the said appeal, the Assessing Officer issued notice under section 148 on March 17, 2009. The Assessing Officer vide letter dated June 5, 2009 gave reasons for reopening the assessment which are reproduced hereunder: "In the Schedule 4 (fixed asset) of the balance-sheet additions made during the year is Rs. 14,33,133 thousands. This is the net of Rs.1,44,897 thousands pertaining to gains from foreign exchange rate fluctuation on loans taken to acquire the fixed asset. The assessee has claimed a deduction of Rs. 2,42,957 thousands from the profit as per the profit and loss account in the computation statement towards research and development capital expenses under section 35. Actual cost of addition during the year as per income-tax depreciation statement is Rs. 13,35,053 thousands and the assessee has deducted a sum of Rs. 1,46,04,383 from the actual cost of the asset while....
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....o. in foreign currency decided by the parties. The assessee shall pay the royalty to M/s. Hyundai Motor Co. commencing from April 1, 2002. The parties shall through a letter of concurrence specify the percentage of royalty payable by the assessee-company to M/s. Hyundai Motor Co. The agreement shall be effective for the period of 10 years commencing from April 1, 2002 and ending on March 31, 2012 unless terminated under any other provisions of the agreement. In this connection, the lump sum payment of Rs. 10,83,39,284 made by the assessee towards supply of technical know how requires to be capitalised after allowing depreciation under section 32(1)(ii) in view of the decision in the case of Scientific Engineering House P. Ltd. v. CIT [1986] 157 ITR 86 (SC) wherein it was held that where under an agreement the assessee made payment to its foreign collaborator for documents such as manufacture, drawings, processing documents, designs charts, plan, etc., the expenditure has to be treated as capital expenditure. 3. As per Taxation Laws (Amendment) Act, 2005, if the export turnover exceeds Rs. 10 crores, the benefit of deduction on the DEPB under section 80HHC shall be given subje....
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....d the assessment under section 143(3) read with section 147 of the Act on December 23, 2009 determining the total income of the assessee at Rs.5,70,17,10,121. Aggrieved against the assessment order dated December 23, 2009, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), LTU primarily on the following grounds : (i) Reopening of the assessment is beyond the period of four years ; (ii) The Assessing Officer reopened the assessment for the reasons that the appellant did not reduce the entire foreign exchange gain from the actual cost of asset for claiming depreciation under section 32 and deduction under section 35 of the Act ; (iii) The lump sum consideration paid towards technical know-how needs to be capitalised after allowing depreciation at 25 per cent. ; (iv) The assessee did not prove that it had opted to choose either duty draw back or DEPB/DFRC for the purpose of deduction under section 80HHC. The Commissioner of Income-tax (Appeals), vide order dated September 23, 2011, allowed the appeal of the assessee on the ground that the Assessing Officer had called for the details regarding these issues during the original assessment pro....
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....t the case of the assessee is squarely covered by the judgment of the hon'ble Supreme Court in the case of CIT v. Kelvinator of India Ltd. reported as [2010] 320 ITR 561 (SC) and the Division Bench judgment of the hon'ble Madras High Court in the case of CIT v. Cholamandalam Investment and Finance Co. Ltd. [2009] 309 ITR 110 (Mad). He contended that in the present case the entire documents were submitted by the assessee to the Assessing Officer and whatever queries raised were duly answered along with the evidence at the time of original assessment. He submitted that notice under section 148 of the Act was issued merely on the basis of change of opinion and no new issue or ground was raised in the reopening proceedings. We have heard the submissions made by both the parties and have gone through the orders of the authorities below. The judgment/orders referred to by the respective parties have also been examined by us. It is an admitted fact that in original assessment proceedings under section 143(3) of the Act, the Assessing Officer had completed the assessment, vide order dated December 29, 2006 making certain additions. A perusal of the original assessment order dated Decemb....
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....47 action under section 147 is permissible, even if the Assessing Officer gathered his reasons to believe from the very same record as had been the subject matter of the completed assessment proceedings. In our opinion, the law laid down in the said judgment/order is not applicable in the facts and circumstances of the present case. In the instant case, the Assessing Officer not only examined the documents/evidence originally submitted by the assessee but has asked for further documents. Admittedly, the information was supplied by the assessee, if the Assessing Officer fails to take note of the same or does not appreciate the evidence from all dimensions in the first instance, he cannot be permitted to reopen the assessment under section 147 of the Act to cover up his own folies. Once the entire evidence as required by the Assessing Officer is submitted by the assessee, duty is cast upon the Assessing Officer to take cognisance of the evidence and pass assessment order under section 143(3) of the Act. The Assessing Officer cannot review his own order under the guise of section 148 and reappreciate the evidence which was already before him at the time of original assessment. Th....
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....e 1, 1976 in relation to the assessment year 1977-78 and subsequent years that the expenditure incurred outside India also deemed to accrue or arise in India in respect of the services rendered. Based on the above circular of the Central Board of Direct Taxes No. 7 of 2009 and also from Finance Bill 2010-11 that whatever the expenditure incurred by the assessee in foreign currency for the purpose of utilisation of services even though the services rendered outside India is taxable. Since the assessee has incurred expenditure in foreign currency to the tune of Rs. 3,88,92,59,000 the same has to be allowed only subject to the provisions of section 195 of the Act. Hence, the assessee has not disclosed all the necessary facts for the purpose of allowability of the same in the return of income on the above issue. Thus, the above claim of expenditure in foreign currency shall be disallowed as per the provisions of section 40(a)(i) of the Income-tax Act. Therefore, it is clear that the assessee has not disclosed all the material facts for the assessment year 2005-06 for the purpose of assessment. Hence, I have reasons to believe that the income has escaped the assessment within the ....
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....Shri S. Hariharan, authorised representative for the assessee submitted that the assessee is impugning the order of the Commissioner of Income-tax (Appeals) in cross-objection (C. O. No. 43/Mds/ 2012) on the ground that the Assessing Officer had no jurisdiction to reopen the assessment on the basis of change of opinion. He further contended that notice under section 148 was served on the assessee after expiry of time limit mentioned in the Act. The assessee had filed the return of income under section 139 within due date and had produced all the relevant documents with regard to notice served by the Department under section 143(2). Therefore, the reopening of assessment by the Assessing Officer is without jurisdiction. In order to support his contentions, he relied on the judgment of the hon'ble Supreme Court of India in the case of Kelvinator of India Ltd. reported as [2010] 320 ITR 561 (SC). On the issues raised by the Departmental representative, the authorised representative submitted that there would be no double deduction as mentioned by the Departmental representative and there is no question of further addition in the inventory. The authorised representative submitted th....