TaxTMI 
TaxTMI 
2007 (2) TMI 193
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....opened. The petitioner has also challenged the order dated November 21, 2006, passed by the Assessing Officer rejecting the objections filed by the petitioner for reopening the assessment. 3. The petitioner carries on business of providing verification, inspection and certification of services in India. On October 30, 2001, the petitioner filed its return of income for the assessment year 2001-02 declaring the taxable income of Rs. 8,42,67,317. Subsequently, the petitioner revised its return of income to Rs. 8,19,03,180 on account of change in the depreciation claim. 4. The return of income filed by the petitioner was duly processed under section 143(1) of the Act vide intimation dated April 24, 2003. Later on the return of income was tak....
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.... with its associate in Switzerland was not at arm' s length and was disallowed. Considering the fact that the similar payment was made under the head ' Research and Development' amounting to Rs. 1.47 crores in the relevant assessment year that is 2001-02, by virtue of the finding of the Addl. CIT, TP-2, Mumbai, this payment to SGS Switzerland, would have to be disallowed. There fore, I have reasons to believe that your company by having claimed wrongful expenses has suppressed total income and thus has evaded tax. 2. In view of Explanation 2(c)(i) to section 147 of the Income-tax Act, 1961, I have reason to believe that the income chargeable to tax has escaped assessment for the assessment year 2001-02 and hence proposed to pr....
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....stained. 9. Mr. Pardiwala further submitted that from the reasons recorded by the Assessing Officer, it is seen that the assessment is sought to be reopened solely based on the assessment order passed for the assessment year 2002-03 wherein the research and development expenses incurred have been disallowed on the ground that the same were not at arm' s length as contemplated under section 92CA(3) of the Act. Mr. Pardiwala submitted that the special provisions relating to avoidance of tax enacted by the Finance Act, 2001, came into force with effect from April 1, 2002, and were applicable for and from the assessment year 2002-03. Therefore, reopening of the assessment for the assessment year 2001-02, based on the assessment order for t....
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....subject matter of completed assessment proceedings. 13. We have carefully considered the rival submissions. In the present case from the reasons recorded for reopening the assessment, it is evident that the reasons to believe that the income has escaped assessment are based on the findings recorded in the assessment order for the assessment year 2002-03. In the assessment order for the assessment year 2002-03, the research and development expenses incurred by the petitioner in the assessment year 2002-03 have been disallowed partially on the basis of the findings recorded by the Transfer Pricing Officer to the effect that the transactions were not at arm' s length as contemplated under the Transfer Pricing Regulations. As rightly conte....