Case Law Details
DCIT Vs M/s DSM Sinochem Pharmaceuticals Pvt. Ltd. (ITAT Chandigarh)
In this case since there was no reason at all for reopening the case on the issue of treatment of royalty expenses ,since the same had already been decided in favour of the assessee by the ITAT, before the recording of reasons for reopening the present case. In fact, the ITAT had decided the issue in the very same assessment year, which assessment order had formed the basis for reopening the case i.e A.Y 2009-10. The AO could not have any reasons to believe that income had escaped assessment when the very basis of its belief, being the assessment order of a subsequent year, had been reversed by the ITAT before the recording of reasons by the AO.
FULL TEXT OF THE ITAT JUDGMENT
The present appeal filed by the Revenue and the Cross Objection of the assessee are directed against the order of CIT(A)-1 Chandigarh 31/07/2017.
2. Briefly stated the assessee had for the impugned year filed return declaring Nil income, which was assessed under section 143(3) of the Act making various additions therein. Thereafter the AO reopened the assessment under section 147 and made addition of Rs. 3,11,32,500/- to the income of the assessee by treating the royalty paid by the assessee amounting to Rs. 4.67 crores as capital expenses, as against revenue claimed by the assessee. The said order was challenged before the Ld. CIT(A) both on the legal ground of the validity of the assessment framed under section 147 of the Act as well as on the merits of the case. The Ld. CIT(A) upheld the validity of the order passed but at the same time decided the issue in favour of the assessee on merits following the decision of the ITAT Chandigarh in the case of the assessee for AY 2009-10 and 2010-11.
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