9911796707
TMI Blog2012 (5) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... ll and true disclosure of the material facts. In this connection, he submits that the agreement entered into between the respondent-assessee and the Department of Science and Technology, Government of India, was not filed before the Assessing Officer in the assessment proceedings for the assessment years 1990-91 and 1991-92. He submits that this is apparent if we read the letter dated November 9, 1994, filed by the respondent-assessee during the course of the assessment pro- ceedings for the assessment year 1992-93. He submits that the other letter dated November 12, 1992, filed during the course of the assessment pro- ceedings for the assessment year 1990-91 has been misconstrued and mis- interpreted by the Tribunal. 4. The reasons recorded by the Assessing Officer at the time of reopening of the assessment for the three assessment years in question are identical except for the figures. For the sake of convenience, we are reproducing the reasons recorded by the Assessing Officer pertaining to the assessment year 1990-91 : "Assessment in this case was completed under section 143(3). During the course of the assessment proceedings for the assessment year 1995-96, it was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n total loss is computed as under : (Rs.) (Rs.) Net loss as per the profit and loss account (-) 148,93,690 Deduct : Disallowance under section 37(2A) 42,897 Legal and professional fee in excess of Rs. 10,000 as per the tax audit report 2,66,909 Disallowance under rule 6D 1,52,648 Disallowance under section 40A(3) 21006 Depreciation for separate consideration 52,82,188 Payments to club as per the tax audit report 5,2230 58,17,878 (-) 90,75,812 Add : Depreciation as claimed 52,82,188 Total loss : (-) 143,58,000" 7. The quotes from the aforesaid two orders clearly indicate that what was the subject-matter considered and examined by the Assessing Officer. The subject-matter was the maintenance and service charges received by the respondent-assessee and the taxability of the said amount. The Assessing Officer was aware and conscious of the nature and why payment was received by the respondent-assessee from the Department of Science and Technology. The respondent-assessee had claimed expenses and the said aspect was examined and accordingly the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icult to perceive and accept the contention of the Revenue that the nature and character of the maintenance and service charges paid and payments received was not within the knowledge of the Assessing Officer and gone into. (iii) The assessment orders for the assessment years 1990-91 and 1991-92 clearly indicate that the Assessing Officer was aware of the nature and character of income, which was received by the respondent, i.e., pay- ment was made by the Department of Science and Technology towards maintenance and service charges. (iv) It is not alleged and no particular clause of the agreement has been highlighted or referred to in the reasons to believe, as a relevant/ material fact would have changed or mattered in the Assessing Officer forming an opinion. Even in the arguments, no specific clause of agree- ment has been relied upon. In the reasons to believe, and before us, it is not stated that a particular or specific clause in the agreement constitutes information regarding a new fact that was not in the knowledge of the Assessing Officer. (v) The reasons to believe recorded above indicate that the Assessing Officer was of the opinion that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper tax leviable. Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all these together, to decide what the legal inference should be. There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assessee. To meet a possible contention that when some account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income-tax Officer might have discovered, the Legislature has put in the Explanation, which has been set out above., In view of the Explanation, it will not be open to the assessee to say, for example-'I have produced the account books and the documents : You, the Assessing Officer examine them, and find out the facts necessary for your purpose : My duty is done with disclosing these account-books and the documents'. His omission to bring to the assessing authority's attention those particular items in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment of India were "fees for technical services" and, therefore, should be taxed accordingly and not as business income. In the assessment order it is not mentioned or recorded that any new fact or factual aspect was ascertained or found on examination of the agreement. The agreement was not specifically referred to, as the relevant document for ascertaining or forming the said legal inference. The Assessing Officer on the basis of the same facts and material reached a different conclusion by applying or interpreting the law. (vii) (a) Letter dated November 12, 1992, was written by the assessee to the Assessing Officer in the course of the scrutiny proceedings for the assessment year 1990-91. The said letter states that the assessee was involved in the maintenance and operation of the super computer sold to the Government of India. It was stated that the assessee had only expatriate employees who were engineers and technicians. No sales and other contracts were effected that year. This letter dated November 12, 1992, has been shown to us and was also filed before the Tribunal. (b) The contention of the Revenue is that in the second paragraph of the letter dated November ..... X X X X Extracts X X X X X X X X Extracts X X X X
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