9911796707
TMI Blog2012 (12) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs u/s 147 of the Act which is bad in law and accordingly, the reassessment order issued u/s 143(3) read with section 144C of the Act is invalid and be liable to be quashed. 2. That the notice issued u/s 148 and the reassessment order passed are illegal, bad in law and without jurisdiction. 3. That in the absence of any addition of the alleged escaped income, on the basis of which notice u/s 148 was issued, the additions made and the reassessment order passed are illegal, bad in law and without jurisdiction. 4. That the ld. AO has grossly erred both on facts and in law in holding the difference between the receipts in the Profit and Loss account and the amount of income shown in the TDS certificate issued by the payer of the income as the deemed income of the Appellant without appreciating the method of accounting used by the Appellant. 5. That the material collected by the ld. AO without any knowledge of the Appellant and used against the Appellant was never confronted and no opportunity was given to rebut the same. Hence, the addition/disallowance made are unlawful, unjust and are against the principles of natural justice and are also highly excessive. 6. That the ld. Trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard, the learned counsel for the assessee has drawn our attention to page 178 of the Assessee's Paper Book ("APB" for short)-Vol-I which contains the reasons recorded by the AO for reopening of the completed assessment. 4. The issues involved therein are foreign exchange fluctuations and data usage charges. The learned counsel for the assessee has submitted that in the proposed order of the AO, no addition was made on foreign exchange fluctuations, whereas apropos the data usage charges of 25% amounting to Rs. 30,00,000/- was disallowed and other additions were also made. It has been contended that the DRP has directed deletion of the addition of data usage charges of Rs. 30,00,000/- also, and so, ultimately, no addition has been made. It is the assertion of the learned counsel that for reopening completed assessment, the addition originally made has to be there and there may be other additions also. Reliance in this regard has been placed on the decision of Hon'ble Delhi High Court in the case of "Ranbaxy Laboratories Ltd. v. CIT", 336 ITR 136. 5. The ld. DR, on the other hand, supporting the AO's as well as DRP's order dated 2.8.11, has contended that even if no addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment; that this income comprised of Rs. 11,82,857/- claimed by the assessee company as foreign exchange fluctuations loss and Rs. 1,21,26,632/-, claimed by the assessee as expenses under the head "data usage charges". In the proposed order of the AO, it is seen, as rightly contended on behalf of the assessee, no addition was made on account of foreign exchange fluctuation loss. With regard to the data usage charges, however, 25%, amounting to Rs. 30,00,000/- was disallowed. The DRP, however, has deleted this addition also. Therefore, it has correctly been contended on behalf of the assessee that no addition on the basis of the reasons recorded for reopening the completed assessment survives. 8. In ""Ranbaxy Laboratories Ltd. v. CIT"(supra), it has been observed, inter alia, as follows:- 18. "We are in complete agreement with the reasoning of the Division of Bombay High Court in the case of Jaganmohan Rao (supra). We may also note that the heading of Section 147 is "income escaping assessment" and that of Section 148 "issue of notice where income escaped assessment". Sections 148 is supplementary and complimentary to Section 148 "is supplementary and complimentary to Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion was not permissible. Had the Assessing Officer proceeded not to make disallowance in respect of the items of club fees, gifts and presents, etc. then in view of our discussion as above, he would have been justified as per explanation 3 to reduce the claim of deduction under Section 80HH and 8-I as well. 21. In view of our discussions, the Tribunal was right in holding that the Assessing Officer had the jurisdiction to reassess issue other than the issues in respect of which proceedings are initiated but he was not so justified when the reason for the initiation of those proceedings ceased to survive. Consequently, we answer the first part of question in affirmative in favour of Revenue and the second part of the question against the Revenue. 22. The present appeal is accordingly allowed." 9. Then "Ranbaxy Laboratories Ltd. v. CIT"(supra), has been followed, while also following "CIT v. M/s. Jet Airways (I)Pvt. Ltd.", rendered by the Hon'ble Bombay High Court on 12.4.2010 in ITA Nos. 1714/2009 and 1526/2008, the Hon'ble Delhi High Court, vide its order dated 28.7.2011 (copy filed on record, at pages 17 to 19 of the Case Laws Paper Book filed by the assessee), the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. 2. That the material collected by the Ld. AO without any knowledge of the Appellant and used against the Appellant was never confronted and no opportunity was given to rebut the same. Hence, the addition / disallowance made are unlawful, unjust and are against the principles of natural justice and are also highly excessive. 3. That the Ld. Transfer Pricing Officer ("TPO") AO has erred in making an adjustment under section 92CA of the Act without returning a finding about existence of the circumstances specified in clauses (a) to (d) of sub-section (3) of section 92C case of the Appellant. 4. That the Ld. TPO/AO has erred, in law and in fact, in determining the Comparably Uncontrolled Price ("CUP") method as the most appropriate method to benchmark the international transaction pertaining to availing of infra-group services and reimbursement of expenses. 5. That the Ld. TPO /AO has erred by assuming that 'no benefit' has been conferred on the Appellant from availing of infra-group services from its AE and these services are duplicative in nature. 6. That the Ld. TPO/AO has erred, in law and facts, by not considering that the adjustment to the ALP, if any, should be limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 89,39,92,188/- (the total paid to third parties) even if all third parties payments are not accepted as genuine. 17. The learned counsel for the assessee has then drawn our attention to pages 113 to 118 under item 5 of APB Vol-I, wherein, the AO has observed as follows:- "DEEMED INCOME ON ACCOUNT OF SHORT RECEIPTS DECLARED IN P/L ACCOUNT :- During the year under consideration the assessee company shown receipt of Rs. 13,89,27,647/-. However as per the TDS reconciliation chart filed by the assessee the total receipt is Rs. 1,05,89,31,810/-. Thus the assessee has shown less receipt of Rs. 92,00,04,163/- (Rs. 1,05,89,31,810/- - 13,89,27,647/-) and it must be treated as deemed income of the assessee as per section 199. Accordingly the assessee company vide notesheet entry dated 25.11.2010 was requested to reconcile the receipts shown in P & L account with the TDS certificates. The assessee company vide letter dated 15/12/2010 and 12/11/2010 submitted as under :- "The company recognizes the commission income in its books of account. The advance received from the parties and given to the vendors is recognized as asset/liability in the books of accounts. The reconciliation of the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd parties. The same was forwarded to the AO for his verification but he requested more time to verify the confirmations. As the DRP proceedings have time limitations, and it would take time for the AO to verify all the details, the DRP directs the AO to verify the evidence (confirmation) furnished and if satisfied will restrict disallowance, if any, to payments to third parties not verifiable. Thus, disallowance in any case cannot exceed Rs. 893992188/- even if third parties payments are not accepted as genuine". As per the direction of the DRP notices u/s 133(6) dated 28.9.2011 were issued to the following parties on the address provided by the asessee to submit the confirmation by 10.10.2011: - 1. ABV Pvt. Limited Rs. 28191207/- 2. Autumn Design Consultants P. Ltd. Rs. 5109707/- 3. Benett, Coleman & Co. Limited Rs. 56202376/- 4. Breakthrough Communciations Rs. 4610662/- 5. Cityneon Dag (India) P. Ltd. Rs. 20180419/- 6. Dainik Bhaskar Publications Rs. 15522931/- 7. Dina Thanti Publications, Madras Rs. 2278049/- 8. Divya Bhaskar Rs. 2089363/- 9. Entertainment Network (India) Ltd. Rs. 1786390/- 10. Gingerwater Films Rs. 138728/- 11. Global Boradcast News Ltd. Rs. 458732 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation has been received for Rs. 7134840/-. Thus the payment shown by the assessee company is not maching with the confirmation received. (ii) The Big Picture Company Limited M/s Cheil Communications private Limited shown payment to this company amounting to Rs. 6000000/- however the confirmation has been received for Rs. 10153062/-. Thus the payment shown by the assessee company is not matching with the confirmation received. (iii) The Living Media(India)Limited M/s. Cheil Communications Private Limited shown payment to this company amounting to Rs. 22485156/- however the confirmation has been received for Rs. 22009157/-. Thus the payment shown by the assessee company is not Matching with the confirmation received. (iv) The New Delhi Television Limited (NDTV) M/s Cheil Communications Private Limited shown payment to this company amounting to Rs. 11719721/- however the confirmation has been received for Rs. 46450911/-. Thus the payment shown by the assessee company is not Matching with the confirmation received (v) The NDTV Media Limited M/s. Cheil Communications Private Limited shown payment to this company amounting to Rs. 93713/- however the confirmation has been received for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the same. Thus, the simple principal is that burden of proof is on that person who claims benefit from the provisions or wants provisions to work in his favour. This is also because of the fact that assessee is in a better position then the tax authorities who have no facts or evidence in their position. As per the direction of the DRP notices u/s 133(6) were issued but no response has been received from 25 parties in 10 cases the notices received unserved in respect of parties who confirmed the transaction the amount is not matching with the payment shown by the assessee company. Further in one case the party to whom notice u/s 133 (6) was issued has informed that it had not entered any transactions with the assessee company to whom the assessee company has shown payment of Rs. 26901063/-. Thus the payment to third parties is not verifiable as per the direction of the DRP. Hence the short receipt shown by the assessee company amounting to Rs. 893992188/- (as restricted by DRP) is added back to the income of the assessee company. (Addition :- Rs. 893992188/-)" 19. The learned counsel for the assessee has contended that the AO collected evidence at the back of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
