2015 (5) TMI 275

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....r referred to as the 'Act') for A.Y.2007-2008 by which, in exercise of powers under Section 147 of the Act, the assessment for A.Y.2007-2008 is sought to be reopened. 2. At the outset, it is required to be noted that the assessment for A.Y.2007-2008 is sought to be reopened beyond the period of 4 years from the relevant assessment year on the following reasons recorded under Section 148(2) of the Act:- "As per section 40(a) of the I.T. Act, 1961 any interest, commission or brokerage, fees or any amount payable to resident contractor or sub-contractor for carrying out any work (including labour supply) on which tax is deductible at source under chapter XVII-B and such tax has not been deducted of after deducted or after deducti....

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....r expenses (outside) amounting to Rs. 1,38,26,488/- out of total manufacturing and labour expenses of Rs. 1,60,13,090/-. However, no Tds was deducted from payment of Rs. 22,65,048/- made to M/s.Mithul Gems(SSI Unit), 28, Saurashtra Diamond, B/h.Gitanjali cinema, Varachha road, Surat on grounds that the said unit is a division of the main firm M/s.Mithul Gems and hence, no TDS is deductible on inter divisional transfer of payments. However, this argument of the assessee is found not acceptable, since, a SSI unit is a separate entity and requires separate registration and cannot be a part of another business concern. The assessee firm has a turnover of Rs. 23.64 crore and even if the assessee firm claims the SSI unit is a division of the firm....

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....ent of Rs. 22,65,048/- made to one party - Mitul Gems/SSI unit and, therefore, since, no TDS was deducted from the payment, the amount of Rs. 22,65,048/- is not an allowable deduction in terms of Section 40(a)(ia). The assessee has claimed the said expenditure and said had resulted under assessment of income to the tune of Rs. 22,65,048/- in the case of assessee due to the failure on the part of the assessee to disclose truly all material facts necessary for his assessment. However, from the communication dated 19.09.2014 disposing of the objections raised by the petitioner - assesseee, it appears that the Assessing Officer had considered altogether a different and new issue with respect to the status of the petitioner-assessee as SSI unit.....