9911796707
TMI Blog2017 (7) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 3. For the Assessment Year ('AY') 2004-2005, the Assessee filed its return of income declaring an income of Rs. 13,77,92,301. In this return, the Assessee claimed a deduction under Section 10A of the Act at Rs. 83,46,87,478/- in respect of profits derived by various eligible undertakings, namely, the Shivalaya Unit, the BPO Unit and the GNR Unit. No deduction was claimed under Section 10A in respect of the software unit at Chennai. Deduction under Section 80HHE was claimed in respect of the Leela Galleria Unit. 4. At the time of computing its income for the AY in question, the Assessee allocated the profits of its overseas branches at Singapore, United Kingdom ('UK') and United States of America ('USA') to the eligible units and considered the same while calculating the profits of the units for the purposes of Section 10A of the Act. A certificate of the Chartered Accountant ('CA') in Form 56F was also submitted in support of the above deduction claimed under Section 10A of the Act. 5.In the course of the assessment proceedings, the AO issued to the Assessee a notice dated 10th November, 2006 under Section 142(1) of the Act. Specific queries and details/information was sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Senior Counsel appearing for the Assessee submitted that: (i) There was no failure by the Assessee to disclose fully and truly all the material particulars relevant to the assessment; (ii) The formation of belief of income having escaped assessment was not passed by the AO afresh on the basis of tangible material and since it was based only on the existing assessment record, which contained all the relevant material which were already disclosed by the Assessee, the reopening was based on a mere change of opinion. 11. Mr. Rahul Chaudhary, learned Senior Standing Counsel appearing for the Revenue, on the other hand, contended that in the present case in terms of Explanation-I to Section 147 of the Act there was no deemed disclosure only because the Assessee had produced the balance sheets and books of account etc. during the assessment proceedings. 12. At the outset, the Court would like to observe that Explanation I does not relieve the Revenue of having to show that there was a failure by the Assessee to disclose, fully and truly, all the relevant particulars necessary for the assessment. All that Explanation I does is to clarify that the mere production of balance-sheet and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment. As far as the deduction under Section 10A of the Act is concerned, there was a complete disclosure of all the relevant facts for each of the units in respect of which the deduction was claimed. The certificate in Form 56F as prepared by the CA, enclosed the calculations for the deductions claimed. The assessment order also shows that the AO had applied its mind to the issues and after considering the explanation submitted by the Assessee, allowed the deduction. The matter travelled, at the instance of the Assessee, to the Commissioner of Income Tax (Appeals) ['CIT(A)'] as well as Income Tax Appellate Tribunal ('ITAT'). Before the ITAT, the Assessee in fact succeeded to the extent that the AO had made the addition on this score. In terms of the fourth proviso to Section 147 of the Act, this was an additional reason why the assessment could not have been reopened. 16. There was no fresh tangible material available with the AO which would justify the formation of the reasons to believe that income had escaped assessment. The mere conclusion that the deduction under Section 10A and 80HHE was 'wrongly claimed', without anything more, would not satisfy the statutory requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted inter alia: "The assessee was asked to furnish details of telecommunication charges, freight insurance charges etc. and expenses incurred in foreign exchange for providing technical services outside India and also to explain why these expenses should not be deducted from export turnover. The assessee furnished details of expenses incurred in Foreign Currency for providing technical services outside India and also telecommunication expenses for all units at Rs. 18,84,66,338/- and Rs. 2,94,32,671/- respectively. He also filed unit wise details of expenses. The assessee company has also provided the break up of the expenses on telecommunication and incurred in foreign exchange and is as under in respect of Units where deduction u/s 80HHE and 10A has been claimed." 20. The AO then discussed the issue at length and concluded: "Hence the definition of total turnover given in section 80HHC cannot be adopted for the purpose of section 10A. Accordingly, the specified deductions made from the export turnover cannot be reduced from the total turnover. Hence the total turnover is to be adopted without reducing the expenditure i.e. telecommunication charges incurred for the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
