9911796707
TMI Blog2019 (2) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Madhur Agrawal i/by Atul Jasani for the Petitioner Mr. Akhileshkumar Sharma for Respondent Nos. 1 to 3 P.C.: 1. The petitioner has challenged a notice of reopening of assessment dated 15.3.2018. 2. The brief facts are as under:- (a). Petitioner is a Private Limited Company. For the assessment year 2011-12, the petitioner had filed the return of income on 30.11.2011 which was subsequently revised on 2.11.2012 declaring total income of ₹ 10.30 crore (rounded off). In such return, the petitioner had debited an amount of ₹ 8.84 crore (rounded off) in the profit and loss account towards payment of fees as per the Global Service Agreement. The petitioner would point out that said payment would be made initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GSA) fees' (Sch. 14). This Lamont is the net figure of a sum of ₹ 8,07,22,455/- on which tax was deducted and paid, and ₹ 4,65,32,582/- on which tax was not deducted less reversals of expenditure of earlier years (AY 2009-10 and AY 2010- 11) amounting to ₹ 3,88,25,307/-. The assessing officer, had disallowed an amount of ₹ 77,07,275/- (Rs. 8,84,29,729 - ₹ 8,07,22,455 or ₹ 4,65,32,582 - ₹ 3,88,25,307) u/S. 40(a)(i) for non deduction of tax, in the scrutiny assessment. Since the tax was not deducted on a sum of ₹ 4,65,32,582/-, this amount was disallowable but for reversals of expenditure. The netting of sum on which tax was not deducted with sum of reversals amounted to allowance of deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons, the petitioner raised objections to the notice of reopening of assessment under communication dated 22.11.2018. Such objections were rejected by the Assessing Officer by an order dated 27.11.2018 and hence, this petition. 3. Having heard the learned counsel for the parties and having perused the documents on record, we may notice that the impugned notice has been issued beyond the period of four years from the end of relevant assessment year. The requirement that the income chargeable to tax has escaped assessment due to the failure on the part of the assessee to disclose truly and fully all material facts flowing from first proviso to Section 147 of the Act, therefore, needs to be satisfied. In the present case, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer during the assessment proceedings. Under a letter dated 17.12.2013, the Assessing Officer called for various details from the petitioner including the following :- xiv) Details of following expenses debited to Profit Loss account:- ....................... ....................... (h) Details of Global Services Agreement fees. Also indicate whether TDS made thereon being fees for Technical services. In response to the query, the petitioner replied under letter dated 30.1.2014 and supplied following details:- 5. Details of tax deducted at source on General Services Agreement (GSA) fees. Please refer Annexure C. Out of the total expenses of ₹ 88,429,729/-, tax has duly been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Q1-2010-GSA Chgs - $231541 (10,454,076) Reversal 9 Q1-2010-GSA Royalty Chgs-$639790 (9,059,163) Reversal 10 Q1-2011-GSA Royalty Chgs 16,743,714 No Tax deducted 11 Q3 Q4 - GSA 2010 Chgs - The Nielsen Co (US) LLC 21,669,724 Tax has been deducted and duly paid 12 Q3 Q4 2010 Royalty Chgs - The Niesen Co (US) LLC 18,778,241 Tax has been deducted and duly paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we request your goodself not to make disallowance of GSA expenditure without considering the reversals of ₹ 46,532,582 comprised therein. It was after such detailed scrutiny that the Assessing Officer passed the order of assessment in which he made limited disallowance of sum of ₹ 77.07 Lacs under Section 40A(i)(a) of the Act making following observations:- 3. Disallowance u/s. 40A(i)(a) - GSA Fees: 3.1 On perusal of records filed during the course of assessment proceedings, it is observed that the assesee has claimed expenses of ₹ 8,84,29,729/- under 'Global Services Agreement Fees'. The assessee was required to deduct TDS u/S. 194J of the I.T. Act. The assessee was, therefore, required to furn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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