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TMI Blog2016 (4) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld AR argued that no ASFF was incurred and charged to the profit and loss account and also no inland transportation of 84100US$ were incurred and charged to the profit and loss account but 14,29,604/- were incurred and charged to the profit and loss account as transportation charges overseas paid to ALIA Jordan in Jordan for which proper bills, vouchers and bank advice are available. We are of the considered view that in the light of the facts as stated above the re-opening of assessment cannot be justified by the AO by just mechanically recording the reasons without any application of mind. We therefore annul and quash the re-assessment proceedings and also the consequent order of assessment passed u/s 143(3) /147 of the Act by allowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming the legality of action of the A.O. in initiating, and completing the reassessment in case of the Appellant u/s 147 of the Act. 2.2 It is submitted that in the facts and the circumstances of the case, and in law, the reassessment was bad, illegal and void as mandatory preconditions for initiating reassessment proceedings, as well as completion thereof, were not complied with. 2.3 It is prayed that the reassessment being annulled and be held as null and void WITHOUT FURTHER PREJUDICE TO THE ABOVE 3.1 The Id. CIT (A) erred in confirming the addition / disallowance made by the AO on account of the following items: a) Inland transportation fees (ITF) Rs.14,29,604/- b) After sales and services fees (ASSF) Rs.86, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing inland transportation charges and ASSF as these amount were actually paid to Iraqi authorities either directly or through an agent for procuring the contract in Iraq and further held that Volkar Committee report could not doubted otherwise the committee would not have reported the payments. 3. At the outset, the ld AR for the assessee submitted that the ground no 1 is in support of ground no 2 and 3.The first issue raised by the AR is that the proceedings initiated u/s 147 r.w.s. 148 of the Act were bad in law because the reasons as recorded u/s 148(2) for issuing notice was based on incorrect facts and in consequence the whole proceedings became invalid as the very foundation of initiation was wrong. He drew our attention to para 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to section 147 and thus case of the assessee was wrongly re-opened. 4. Per contra the ld DR relied on the orders of authorities below. 5. We have considered the rival submissions and perused the materials on records and orders of authorities below. We find that the CBDT on the basis of Volckar committee report sent a memorandum to the AO intimating the list of companies involved in the paying kickbacks to Iraqi Government during supplies made under "Oil for Food Programme and the AO recorded reasons u/s 148(2) of the Act for re-opening the assessment which are extracted below:- "As per office memorandum of CBDT F.No.414/117/2005-IT(Inv) dated 18.11.2005, the assessee company had executed two contracts with government of Iraq under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of CBDT Memorandum that some companies including assessee were involved in giving kickbacks to Iraqi Government in the supplies made by these companies in Oil for Food Programme. We note that the AO had mechanically recorded the reasons on the basis of CBDT information without even verifying the fact whether the assessee charged such expenses in the profit and loss account as stated in the memorandum . The ld AR argued that no ASFF was incurred and charged to the profit and loss account and also no inland transportation of 84100US$ were incurred and charged to the profit and loss account but ₹ 14,29,604/- were incurred and charged to the profit and loss account as transportation charges overseas paid to ALIA Jordan in Jor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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