TaxTMI 
TaxTMI 
2016 (3) TMI 1054
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....ctions first. 3. The first common issue in these two Cross Objections of the assessee is as regards to assumption of jurisdiction by the AO for reopening of assessment u/s. 147 r.w.s. 148 of the Act. For this, assessee has raised identically worded ground in both the years and hence, the ground no. 2 raised in CO. No. 44/Kol/2012 for AY 2003-04 reads as under: "2 (a) That on the facts and in the circumstances of the case, Ld. CIT(A) is wrong and unjustified in upholding the reassessment and initiation of proceeding u/s. 147 of Income Tax Act, 1961. b) That the original assessment having been completed u/s. 143(3), initiation of reassessment proceeding beyond four years period was invalid in law without establishing the failure on the part of the assessee company to disclose fully & truly all material facts for its assessment for the relevant assessment year." 4. Briefly stated facts are that the assessee is engaged in manufacturing and sale of jute goods and generation of power for captive consumption. The assessee filed its return of income declared total income at Rs. 3,44,34,580/- after claiming deduction u/s. 10B of the Act in respect of 100% Export Oriented Unit (EOU) at B....
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....this stage to clarify this issue. In the Clause-(c) of the Explanation after sub-sec.(vii) of sec. l0B, export turnover has been defined as "the consideration in respect of export by the undertaking of eligible articles or things received or brought into, India by the assessee in convertible foreign exchange in accordance with sub-sec.(iii), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India. "According to this decision "export turnover" means the amount of convertible foreign exchange brought into India through export of articles, things or computer software as provided sub-sec.(i) thereof. Hence on strict interpretation of this definition of the "export turnover", there is no scope of including any other item not specifically mentioned in this definition. The AO is accordingly directed to recalculate the admissible amount of exemption u/s.l0B excluding the receipt of any incentive amount in respect of such export." 5. Aggrieved, assessee preferred appeal before Tribunal and Tribunal in ITA No. 2010/Kol/2006 vide order dated 25.05.2007 allowed the claims of the assessee in respect to exemption ....
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....e assessee has not been included in the export turnover. So, as per Hon'ble ITAT's direction, assessee is to get exemption u/s. 10B on account of incentive." Subsequently, the AO issued notice u/s. 148 of the Act dated 16.03.2010 after recording the following reasons: "REASONS OF ISSUE NOTICE U/S. 148 OF THE I. T. ACT IN THE CASE OF M/S. CHEVIOT COMPANY LIMITED PAN AABCC2380H ASSESSMENT YEAR 2003-04 In this case assessee has been allowed a total exemption of Rs. 11,77,92,580/- u/s. 10B on profit of its 100% EOU at Budge Budge being an eligible undertaking. It has come to my notice that an amount of Rs. 1,75,69,837/- being external market assistance in respect of this unit has been credited in the P&L A/c below the line and is not included and/or forming part of total income. This amount is also not included in the profit of the unit eligible for exemption u/s. 10B. However, exemption u/s. 10B on this amount has been claimed by the assessee and allowed in the assessment. Another important aspect that has come to notice is the determination of the quantum of exemption u/s. 10B. In form No. 56G the Chartered Accountant has certified as under: Profit as per P/L A/c 13,....
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....usiness. The Principle of deduction of an amount from numerator and denominator has not been followed here. In this case, there are two numerators i. e. profit & export turnover and both are required to be reduced by Rs. 1,66,74,805 to arrive at the correct figure of exemption u/s 10B but assessee reduced only one numerator being export turnover by the said amount. The export profit is accordingly, to be considered at Rs. 11,85,58,787/ (Rs.13,52,33,592/- minus Rs. 1,66,74,805/-) and considering same export turnover & total turnover as reported in Form No. 56G, the eligible profit will be Rs. 11,85,58,787/- for the purpose of exemption u/s. 10B. In that case, exemption allowable to the assessee is 90% of Rs. 11,85,58,787/- which comes to Rs. 10,67,02,908/-. Thus, It is seen that in assessment, excess exemption to the extent of Rs. 1,10,89,672/- was allowed by allowing an aggregated amount of Rs. 11,77,92,580/- and thereby taxable income of identical amount has escaped assessment. In view of the above, I have reason to believe mat the amount of excess exemption Rs,1,10,89,672/- claimed by the assessee and allowed in the order of assessment for which identical amount of income has es....
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....s contention that it has not included EMA in the export turnover. The AO while giving appeal effect to the order of the Tribunal accepted the assessee's contention and allowed the exemption u/s. 10B of the Act including incentive i.e. receipts of EMA. In such situation, whether the revenue on same set of facts can reopen the assessment by resorting to the provisions of section 148 r.w.s. 147 of the Act? Admittedly, in the present case, the relevant AY involved is 2003- 04 and 2004-05 and in both the years assessments were completed u/s/. 143(3) of the Act and matter travelled up to Tribunal as noted in the reasons recorded by the AO in both the years. We find from reassessment order framed u/s. 143(3) r.w.s. 147 of the Act and consequent to that the order of CIT(A), there is no finding as such that there is 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. The CIT(A) has simply confirmed the action of AO for reopening of assessment vide para 5.3 as under: "5.3. I have gone through the submissions of the appellant and the reasons for the reopening of the assessment by the AO. The....
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....case of Foramer Vs. CIT (2001) 247 ITR 436 (All), wherein Hon'ble Allahabad High Court held as under: "Having heard learned counsel for the parties, we are of the view that these petitions deserve to be allowed. It may be mentioned that a new section substituted section 147 of the Income-tax Act by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989. The relevant part of the new section 147 is as follows: "147. If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may,subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or re-compute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year,....
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.... above, Boudier Christian's case related to the employees of the company, whereas the impugned notice has been issued to the company. Hence, it cannot be said that the proposed reassessment in consequence of the impugned notice would be in consequence of or to give effect to any findings of the Tribunal in Boudier Christian's case. A direction or finding as contemplated by section 153(3)(ii) must be a finding necessary for the disposal of a particular case, that is to say, in respect of the particular assessee and in relevance to a particular assessment year. To be a necessary finding it must be directly involved in the disposal of the case. To be a direction as contemplated by section 153(3)(ii) it must be an express direction necessary for the disposal of the case before the authority or court vide Rajinder Nath v. CIT [1979] 120 ITR 14 (SC) ; Gupta Traders v. CIT [1982] 135 ITR 504 (All) ; CIT v. Tarajan Tea Co. (P.) Ltd. [1999] 236 ITR 477 (SC) and CIT v. Goel Bros. [1982] 135 ITR 511 (All), etc. The case of an expatriate employee was to be decided on the basis of the provisions of article XIV of the treaty, whereas corporate income was to be decided on the basis of ei....