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TMI Blog2016 (3) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... No.2194/Mum/2013 - - - Dated:- 30-3-2016 - SHRI R.C.SHARMA AND SHRI PAWAN SINGH, JJ. Appellant by: Shri B.C.S. Naik Shri, Bhanwar Singh Ratnoo (DR) Respondent by: Shri Satish Modi(AR) ORDER PAWAN SINGH, J. 1. These appeals are arising out of order of CIT(A)-24, Mumbai dated 12.12.2012 were heard together and are being disposed of by common order. 2. In ITA No. 2365/Mum/2013, the Revenue has challenged the validity of order on the following grounds: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the disallowance of MICR charges of ₹ 23,94,249/- u/s 40(a)(ia) of the I.T. Act as the decision of the Hon ble Supreme Court relied on by him relates to section 201 of the Income Tax Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the disallowance of ₹ 58,94,437/- u/s. 40(a)(ia) of the I.T. Act as the decision of the Hon ble Supreme Court relied on by him relates to section 201 of the Income Tax Act. 3. The appellant therefore, prayed that the order of the CIT(A) be set aside and that of the Assessing Officer be restored. 3. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter No. SRT/IT/TDS-Intimaticn-34/2009-10 Dated 10/03/2010 was received in LTU, Mumbai in April' 2010 wherein it was stated that assessee had paid ₹ 23,94,249/- as MICR charges to MICR centre manages by State Bank of India at Surat but had not deducted TDS on such charges u/s I94J Hence, I have reasons to believe that it is a failure on assessee's part to not add back the amount of ₹ 23,94,249/- to total income u/s 40a(ia). 4. Information vide letter No. DCIT.24(2)/Audit/2010-11 dated 13/07/2010 was received in LTU, Mumbai on 14/10/2010 wherein it was stated that assessee had paid ₹ 58,94,437/- to one Ratnakar Shetty, proprietor of M/s. Ratna Caterers but assessee had failed to deduct TDS on such payments. Hence, I have reasons to believe that it is a failure on assessee's part to not add back the amount of ₹ 58,94,437/- to total income u/s 40a(ia). 5. Accordingly, I have reasons to believe that income has escaped assessment due to failure on part of assessee u/s 147, second proviso on the issues above. 5. In response to the notice u/s. 148 of the Act, the assessee filed his reply dated 19.04.2011 and demanded reasons for re-opening an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue has supported the finding of authorities below and argued that the CIT(A) had categorically held in para 4.3.1 of its order that AO re-opened the assessment u/s. 147 of the Act, 1961 on receipt of specific information from AO at Surat vide letter dated 10.03.2010 that assessee had paid a sum of ₹ 23,94,249/- as MICR charges to SBI MICR Centre without deduction of TDS u/s 194J of IT. Act, 1961. Hence, Assessing Officer had reasons to believe that there was a failure on the part of assessee to add back a sum of ₹ 23,94,249/- u/s 40(a)(ia) of I.T. Act, 1961. Another reason for reopening the assessment was that CIT(A) had decided assessee's appeal vide order dated 31/03/2009 and concluded in the order that in view of assessee's claim for exemption of dividend income u/s 10(34) of IT. Act, 1961, expenses of ₹ 106,26,80,655/- relatable to earning of such income were disallowable u/s 14A of IT. Act, 1961 read with rule 8D of I.T. Rules, 1962 and since only a sum of ₹ 120,09,990/- had been added back while computing book profits u/s 115JB of LT. Act, 1961, The balance amount of ₹ 105,06,70,665/- remained to be added back. Third ground for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to proceed under s. 147 only in the latter case-Impugned notice quashed and set aside. And further in case of Kimplas Trenton Fittings Ltd. vs. ACIT reported vide 70 DTR (Bom) 43 wherein it was held that the re-opening is beyond four years, the escapement of income is not sufficient in itself to validate the reopening. The jurisdictional requirement where an assessment is opened beyond four years is a failure to disclose all material facts necessary for the assessment. Unless that condition is fulfilled, the re-opening cannot be sustained. All material facts were within the knowledge of the AO and were placed on the record by the assessee. The reasons which have been recorded by the Assessing Officer for reopening the assessment purport to state that subsequently, that is to say after the order of assessment u/s 143(3) was passed on 29 September 2006, it has come to notice that the assessee had entered into an MOU with the Swiss Company for settlement of the outstanding loan which was however not offered to tax. Exfacie, this reason is contrary to the record. This is not a fact which has subsequently come to notice but is something which was within the knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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