TaxTMI 
TaxTMI 
2015 (10) TMI 824
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....Turner International India Private Limited (TIIPL) in India to sell advertising on the products and to distribute the products, namely, (a) Satellite Delivered Televisions Services called Cartoon Networks, TCM Turner, TCM Turner Classic Movies, POGO and Boomerang ; (b) from Interactive Entertainment Services known as cartoonnetworkindia.com and POGO.T.V.; and (c) from Entertainment Mobile Telecommunication Services "Cartoon Network Mobile and Boomerang Mobile. WP(C) No. 1874/2013 (Assessment year 2007-2008) 3. The petitioner filed its return of income on 27.03.2009 declaring an income of Rs. 12,40,99,555/-. 4. On 11.08.2009, a questionnaire was issued by the respondent/revenue seeking details/evidence/explanations on various aspects pertaining to taxability of the petitioner. In total 38 queries were raised. For the present context, the following queries may be noticed:- (i) Give detailed note regarding the nature of business activities performed by the Petitioner. Furnish details regarding the projects executed in India during the year; (ii) File copy of return of Income for AY 2007-08 with Balance-sheet, Profit and Loss account and Notes on accounts. ....
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....12.2009. 6. On 24.12.2009, the proceedings u/s 143 (3) of the Income Tax Act were concluded and the assessment was framed. The Assessing Officer came to the conclusion that only 10% of the total advertisement and distribution revenue earned in India was taxable in India. In the detailed assessment order, specific reference is made to the notes to computation of income tax filed during the course of assessment proceedings. The Assessing Officer in the assessment order has referred to the mutual agreement to avoid double taxation under Article 27 of India/USA DTAA for the assessment years 2001-2002 to 2004-2005 and the fact that subsequently for the assessment year 2005-06, assessment was concluded following the MAP resolution. The Assessing Officer in the assessment order has specifically recorded that since the facts of the year under consideration remain the same, therefore, following the agreement reached by the respective competent authorities in the earlier years, the tax was computed at 10% as per the MAP resolutions. 7. On 27.03.2012 notice under Section 147/148 was issued, within the period of four years and the said notice was served on 30.03.2012. The reasons recorde....
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....les agreement effective April 01, 2006 with the department. 12. On consideration of the material filed during the assessment proceedings, the Assessing Officer framed the assessment on 20.12.2010 concluding and holding that 10% of the total advertisement and distribution revenue received from India was taxable in India. The Assessing Officer in the Assessment Order has specifically noted that in case for Assessment Years 2001-02 to 2004-05, the respective competent authorities of India and USA have reached a mutual agreement to avoid double taxation under Article 27 of India/USA DTAA. As per the terms of the mutual agreement, 10% of the advertisement revenues received from Indian Sources during the relevant previous years by the appellant is deemed to net profit chargeable to tax in India. 13. Subsequently for assessment years 2005-06, 2006-07 and 2007-08 (WP(C) 1784/2013), assessments were concluded following the afore-mentioned MAP resolution. Further, the Assessing Officer has noted that since the facts of the year under consideration remain the same as for assessment year 2007-08, therefore, following the agreement reached by the respective competent authorities in the ea....
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....etitioner, which was duly replied to. As many as 38 queries had been raised and a detailed reply alongwith all annexures and supporting documents were furnished by the petitioner in response to the queries raised. The copies of the relevant agreements, the generation of income and the tax treatment given by the petitioner to the said income was duly disclosed to the assessing officer. The material based on which the reopening has been sought to be done by the department was available before the assessing officer at the time of the framing of the assessment under Section 143. Not only was the same before the Assessing Officer, the Assessing Officer has referred to the same in the Assessment Year and taken note of the same. 18. In Commissioner of Income Tax Versus Usha International Ltd. 348 ITR 485 (Del.) (FB), Full Bench of Court laid down the following propositions of law: (i) The expression 'change of opinion' postulates formation of opinion and then a change thereof. In the context of section 147, it implies that the Assessing Officer should have formed an opinion at the first instance, i.e., in the proceedings under section 143(3) and now by initiation of th....
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....re also such facts which could have been discovered by the assessing authority but were not so discovered at the time of original assessment may not constitute a new information. - Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456, 477 (SC), A.L.A. Firm v. CIT [1991] 189 ITR 285, 298/ 55 Taxman 497 (SC), Indian & Eastern Newspaper Society v. CIT [1979] 119 ITR 996, 1004 (SC), ITO v. Lakshmani Mewal Das [1976] 103 ITR 437, 445 (SC), CIT V. Bhanji Lavji [1971] 79 ITR 582, 588 (SC). 15. In Kalyanji Mavji & Co. v. CIT West Bengal II [1976] 102 ITR 287 (SC), one of the points decided was that where in the original assessment, the income liable to tax had escaped assessment due to oversight, inadvertence or a mistake committed by the ITO, the assessment can be reopened. It was a decision by a Bench of two Honourable Judges. At least on two occasions, Benches of three Honourable Judges have clarified that Kalyanji Mavji & Co.'s case (supra) cannot be taken to have overridden the consistently laid down law. Where the ITO (very often successor officer) attempts to reopen the assessment because the opinion formed earlier by himself (or more often, by a predecessor ITO), was in his o....
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....uisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. . . ." (p. 477) 18. Following the settled trend of judicial opinion and the law laid down by their Lordships of the Supreme Court time and again, different High Courts of the country have taken the view that if an expenditure or a deduction was wrongly allowed while computing the taxable income of the assessee, the same could not be brought to tax by reopening the assessment merely on account of subsequently the assessing officer forming an opinion that earlier he had erred in allowing the expenditure or the deduction - Siesta Steel Construction (P.) Ltd. v. K.K. Shikare [1985] 154 ITR 547 (Bom.), Satpal Automobile Co. v. ITO [1983] 141 ITR 450 (All.), Gopal Films v. ITO [1983] 139 ITR 566 (Kar.), CWT v. Manilal C. Desai [1973] 91 ITR 135 (MP). (underlining supplied) 20. On applying, the above principles to the facts of the present case and on perusal of the reasons we find that no fresh information or material has been referred to in the reasons recorded for seeking to reopen the assessm....