TaxTMI 
TaxTMI 
2018 (9) TMI 1890
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....ss the income of the assessee based on the material available on record. 03. During the assessment proceedings, besides the reasons enumerated in the appeal before us, the AO has also examined various issues which came to his notice and accordingly made various additions to the income of the assessee. In the course of assessment proceedings, the AO had disallowed the exemption claimed by the assessee u/s10A of the Act, which was beyond the reasons mentioned for reopening in the Para 2 of assessment order. Aggrieved by the order of the AO, the assessee appealed before the CIT (A), however assessee failed before CIT(A) as well. Hence present appeal was filled by the assessee on the grounds mentioned herein above. 04. For the purposes of the present controversy it would be necessary to state the grounds raised by the assessee before the CIT (A) which is as under : 05. The CIT (A) has not decided the above preliminary grounds, despite seeking the ground wise remand report from the AO, and has only decided the issues on merit. As theses grounds were decided on merit by CIT(A) therefore we are restricting ourselves to the ground nos.1 and 2 raised before us as preliminary grounds. ....
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....ened to exclude the expenditure claim of deputation expenses from the export turnover which had, an impact on the computation of deduction u/s 10A.During the course of verification, since the AO found that the eligible pro& claimed .by the assessee as excessive, and since the assessee did not substantiate, the entire profit was added by disallowing the claim u/s 10A. This was further on the basis of the inference that the assessee did not have any infrastructure to export software of render software consultancy services to earn revenue of Rs. 3.12 crores and that, the remittances were nothing but the transfer of money from its branch, which were given the colour of export. The AO, therefore confined himself to restricting the deduction u/s 10A and did not bring in. any other income to be added to the total income, as was. done in the case of Ranbaxy Laboratories Ltd., cited by the assessee. However as recorded hereinabove, the CIT (A) has not adjudicated these grounds while passing the order impugned before us. 07. Before us it was submitted by the Ld. AR that the order of the lower authorities is not correct firstly it is the duty of the AO to provide the reasons for reopening o....
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....essment notice and rather the addition was made on other grounds, found during the course of reassessment proceedings, then the entire addition made by the AO is liable to be quashed being invalid in law. 09. Per contra, the Ld. DR vehemently argued and drew our attention to Hon'ble jurisdictional High Court judgment in the matter of N. Govindaraju v. ITO [60 taxmann.com333], where the Hon'ble High Court after discussing the above two judgments of Bombay and Delhi High Courts, in para 33, 34 and 41, held as under : 33. It is thus clear that once satisfaction of reasons for the notice is found sufficient, i.e., if the notice under section 148(2) is found to be valid, then addition can be made on all grounds or issues (with regard to 'any other income' also) which may come to the notice of the Assessing Officer subsequently during the course of proceedings under section 147, even though reason for notice for 'such income' which may have escaped assessment, may not survive. 34. In the case of CIT v. Jet Airways (I) Ltd. [2011] 331 ITR 236/[2010] 195 Taxman 117 the Bombay High Court has held that "Explanation 3 does not and cannot override the necessity of fulfi....
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....ngh Kang and Mehak Finvest (supra ). On the basis of the above, it was submitted before us that the interpretation given by the Hon'ble jurisdictional High Court is binding on the Bangalore Tribunal and therefore even if the additions were not made pursuant to the reason mentioned in the reassessment order, however if the additions were made on any of the reason which is found connected with the reason mentioned in the reassessment notice, than the reassessment order is valid. Further it was submitted the reasons provided for reassessment has not been challenged by the assessee, hence addition made by the authorities below are required to be upheld. Our attention was also drawn to decision of the Hon'ble Delhi High Court in the matter of PCIT v. Jakhotia Plastics P. Ltd [94 taxmann 89] , in which hon'bel Court had concurred with the view of the Hon'ble Karnataka High Court referred hereinabove in the matter of N. Govindraju v. ITO [60 taxmann.com 333]. The assessee in that matter has approached the Hon'ble Supreme Court by filing the SLP, which was dismissed by the Hon'ble Apex Court. 10. We have heard the rival contentions and perused the record. Without commenting upon the le....