TaxTMI 
TaxTMI 
2014 (8) TMI 865
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....d circumstances of the case and in law the Ld CIT(A) has erred in allowing assessee's appeal holding that the reopening of assessment u/s. 147 is not justified after expiry of four years ignoring that the Assessing Officer was well within his powers to reopen the assessment as per the provisions of section 149(b) of the I. T. Act, 1961. 03. On the facts and circumstances of the case and in law the Ld CIT(A) has erred in allowing assessee's appeal ignoring the fact that there was definite failure on the part of the assessee to disclose fully and truly all material facts related to the issue of realization of export proceeds and that of processing charges relevant for computation of deduction u/s. 10B of the I. T. Act, 1961. 04. On the facts and circumstances of the case and in law the Ld CIT(A) has erred in allowing assessee's appeal ignoring the fact that the assessment was not based on change of opinion. 3. The assessee is closely held domestic company, engaged in the manufacturing of vaccines, anti-sera, plasma, hormonal products, etc. The assessment proceedings for A.Y. 2002-03 were co....
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....produced as under: "148.(1). Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so." 5. The provisions of section 151 of the Act enjoins that in certain situations, no notice u/s.148 was to be issued by the Assessing Officer unless on the reasons recorded by him, the Chief Commissioner or the Commissioner or the Joint Commissioner was satisfied that it is a fit case for issue of ....
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....the company are bifurcated into two separate units i.e. export oriented unit & DTA Unit. 2. The assessee had filed return of income showing total income at Rs. 29,97,23,580/- on 31/10/2002. The original assessment in this case was completed u/s.143 (3) on 22/03/2005, determining the total income of the assessee at Rs. 33,71,86,300/-. The assessee had filed appeal against the said order and on decision of CIT(A)S the assessed income was revised to Rs. 33,26,62,127/- vide order giving effect to the order of the CIT(A) dated. 20/11/2006. Subsequently, information was received from the Board, calling for an enquiry in this case on the basis of Volcker Committee report. Based on the information received and on conducting preliminary enquiries, the Assessing Officer had issued notice u/s.148 on 28/02/2007 (after recording the reasons). During the reassessment, it was noticed by the Assessing Officer (Addl.CIT, Range-6, Pane) that the assessee had claimed expenditure of Rs. 16,98,413/- towards payment of commission to M/s. A1-Taiseer Drugstore and M/s. A1-Qak Pharmacy of Jordan, claimed to be agents of the assessee. In the reassessment u/s. 143(3) r.w.s. 147 dated. 3....
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....d by EOU for filling ampoules and vials from DTA unit. The profit on processing activity was included while arriving at the profit of the EOU. Since processing charges are in the nature of receipts like job work, it is required to be included in the total turnover for computing deduction u/s.10B. 3.3 The reduction of unrealized FOB value has resulted in excess allowance of exemption u/s.10B to the extent of Rs. 2,43,30,358/-. 4. In view of the above, I have reasons to believe that income chargeable to tax to the extent of Rs. 2,43,30,358/- has escaped assessment within the meaning of clause (c) under Expln. (2) to Sec. 147 of the Act". REASONS FOR REOPENING - A.Y. 2003-04 "The assesses company above-named is in the business of manufacturing and sale of life saving drugs and vaccines etc. The operations of the company are bifurcated into two separate units i.e. export oriented unit (EOU) & DTA Unit. 2. The assessee had filed return of income showing total income at Rs. 53,81,21,634/- on 14/11/2003. The original assessment in this case was completed u/s. 143(3) on 31/03/2006,....
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....1 171055043 16302185 15/05/02 30/09/03 31/08/03 19/05/04 No 16336629 2 171052127 249248 08/01/03 30/09/03 No extn was granted 20/01/03 No 259400 From the above chart, it is apparent that the entire proceeds were not realized before 30/09/2003 or within the extension granted by the RBI. Thus, as provided in Sec.10B(3), the amount of Rs. 1,65,51,433/- is required to be deducted from the export turnover while working out the exemption u/s.10B. 3.2 It was also noticed that process charges amounting to Rs. 3,63,95,633/- was not included in the total turnover of Rs. 230,69,16,249/-, in the report in form No.56G the Auditors have contended that the process charges do not form part of the turnover. These process charges were charged by EOU for fitting ampoules and vials from DTA unit. The profit on processing activity was included white arriving at the profit of the EOU. Since processing charges are in the nature of receipts like job work, it is required to be included in the total turnover for computing deduction u/s.10B. 3.3 The reduction of....
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....sons are totally silent with regard to any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year. From the reasons recorded it is also apparent the assessment is sought to be reopened on the ground that while computing the deduction u/s. 10B, the export proceeds not realized before the specified date were not deducted from the export turnover and processing charges were not included in the total turnover and hence there was reason to believe that income chargeable to tax has escaped assessment for the assessment years under consideration. There is nothing on record of assessment order to indicate that the proceedings u/s.147 were sought to be reopened by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration. All the material facts i.e. unrealized convertible foreign exchange before the specified date, non-inclusion of processing charges in the total turnover were duly disclosed by the assessee in the computation of deduction u/s.10B, Form No.56G filed with the original return of inc....
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....xport Sale i.e. GIF Value realised Export Sales not realised, applied for extention 2293973506 Invoice No Rs 17105043 16302185 17105127 249248 16551433 2310524939 Less . Export to Nepal (being amount not realized in convertible foreign exchange) Less : Freight & insurance attributable to the transport of goods beyond custom station in India 1 Freight 111281827 2 Insurance 15616326 126898353 EXPORT TURNOVER i.e. FOB Value 2183626586 EXPORT TURNOVER i.e. FOB Value 2183626586 Notes: 1. The FOB in respect of above invoices yet to be realized. The Company is in the process of making application to RBI for Approval for extension of time limit in respect of the said amount Not realized till 30.09.2003 2. It is contended by the company that the processing charges does not form part of the turnover DEDUCTION U/S 10B Export Turnover (realised in convertible foreign exchange) = ________________ x Profit of the 100% EOU unit Total Turnover 2183....