TaxTMI 
TaxTMI 
2014 (11) TMI 763
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.... completed on 30-12-2008 determining the total income at Rs. 15,89,248. Subsequently the assessment was rectified by reducing the income to Rs. 12,74,720. On 13-09-2010 a notice u/s 148 was issued for reopening the assessment. The assessee filed the return of income disclosing an income of Rs. 14,38,587. According to the ld.representative, the assessing officer reopened the assessment on the ground that the assessee failed to deduct tax on the air freight paid to the extent of Rs. 24,61,578. The ld.representative further submitted that no new information was received by the assessing officer. The assessing officer changed his opinion on the basis of the existing material. Change of opinion cannot be a reason for reopening the assessment u/s....
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.... of the payments which would otherwise be allowed as expenditure in case the assessee failed to deduct tax as provided under the relevant provisions of the Income-tax Act. Therefore, the assessing officer was under a bona fide impression that the assessee was given excessive relief under the Income-tax Act. 6. The main contention of the assessee is that there was a change of opinion. This Tribunal is of the considered opinion that the assessing officer has not taken any view in the original assessment. Without application of the provisions of the Act a return filed by the assessee was accepted. Therefore, at this stage we may not be able to say that the assessing officer changed his opinion. 7. We have carefully gone through the judgment ....
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....Tribunal is of the considered opinion that the attention of the Delhi High Court was not invited to Explanation 2(c)(iii) to section 147 of the Act. Hence, the judgment of the Delhi High Court is per in curium does not apply to the facts of the case. Since excess relief was granted without considering the provisions of section 40(a)(ia) of the Act, this Tribunal is of the considered opinion that the assessing officer has rightly reopened the assessment. 8. Now coming to the merit of the disallowance, Shri A.S. Narayanamurthy, the ld.representative for the assessee submitted that the assessee exported the periodicals to Sultanate of Oman. According to the ld.representative, an agreement was entered into between the assessee on one part and ....
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.... in the profit & loss account, according to the ld.DR, the assessing officer has rightly disallowed the claim of the assessee. The ld.representative placed his reliance on the judgment of the Apex Court in Kalyanji Mavji & Co vs CIT 102 ITR 287 (SC). 10. We have considered the rival submissions on either side and also perused the material available on record. The agreement said to be entered into between the assessee and Three Star Corporation clearly says that Three Star Corporation has to bear the actual freight from Cochin Airport. Therefore, it is not the liability of the assessee to meet the expenditure of freight charges. In other words, the freight charges are the liability of Three Star Corporation. As per the agreement, Three Star....
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....hough he is not liable to pay the same. The legislature intentionally worded "Any person responsible for paying................". Therefore, it is immaterial whether the assessee is liable to make the payment or not? By way of arrangement / agreement, when the responsibility to make the payment of freight charges is given to the assessee, this Tribunal is of the considered opinion that in view of the language employed by the legislature, i.e. "Any person responsible for paying......" the assessee is liable to deduct tax. Therefore, this Tribunal is unable to accept the contention of the assessee that the assessee is not expected to deduct tax. Liability to pay the money is different from responsibility to pay the money. Section 194C require....
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....he amount is debited as freight charges and the very same amount is credited as "Income from other sources" on reimbursement of Three Star Corporation, then this Tribunal is of the considered opinion that further disallowance us 40(a)(ia) may not be necessary. In other words, by debiting the profit & loss account with the freight charges and crediting the amount received from Three Star Corporation as reimbursement of freight charges would result in revenue neutral. If the assessing officer disallows the claim of freight charges u/s 40(a)(ia) then the amount credited as income under the head "Income from other sources" on the reimbursement of freight charges has also to be deleted. Therefore, this Tribunal is of the considered opinion that ....