2017 (9) TMI 1778 - AT - Income Tax

Reopening of assessment - Income from sale of culled birds Profit on sale of lorries Income from sale of birds dropping as manure and Mistake in capital accounts of partners - Held that - The statement disclosing the income sought to be brought to tax in the reassessment proceedings was available with the Assessing Officer at the time of the original assessment though was not been considered by him at least in its relevant part. The issue of consideration of an aspect of the matter and formation of opinion in its respect it may be appreciated is essentially a matter of fact the law only barring a change of opinion. Where therefore there is a live and clear nexus between the said information and the reasons to believe escapement of income formed on that basis the assumption of jurisdiction to reassess cannot be called into question as was sought to be canvassed before us. Thus we hold that the entire assessment in this case is valid and therefore the reopening of assessment is upheld for both the assessment years. The Managing Partner of the assessee firm during the course of survey under section 133A of the Act admitted to have earned an income on the sale of culled birds during the past two years 50% of the same was assessed to tax as income from the sale of culled birds. The above admission by the Managing Partner was not disputed during the course of reassessment proceedings. The second addition was with regard to profit on sale of lorries which was omitted to be assessed in the regular assessment. Third additions is income from sale of birds dropping as manure which was estimated to the extent of .50, 000/- and assessed to tax. The fourth head of addition was totaling mistake in the capital account of the partners tand the same was assessed to tax. The assessee has not filed any details to controvert the above additions made by the Assessing Officer either before the ld. CIT(A) or even before the Tribunal. Thus we find no reason to interfere with the orders of the ld. CIT(A) on this issue.

Summary

Issues:
Reopening of assessment under section 147 of the Income Tax Act, 1961 for assessment years 2003-04 and 2004-05, validity of additions made in reassessment proceedings, confirmation of interest charged under section 234B of the Act.

Reopening of Assessment:
The appeals challenged the orders confirming the reassessment under section 143(3) r.w.s. 147 of the Act for the assessment years 2003-04 and 2004-05. The reassessment was initiated based on a survey under section 133A of the Act, where income from the sale of culled birds and other profits were not disclosed. The reassessment was challenged on the grounds of being time-barred and without fresh material. However, the Tribunal upheld the reassessment, citing the provision of section 149(1)(b) allowing a 6-year time limit for issuing a notice under section 148 for cases where the income escaping assessment exceeds a specified amount.

Validity of Additions in Reassessment:
In the reassessment proceedings, various additions were made by the Assessing Officer, including income from the sale of culled birds, profit on sale of lorries, income from sale of birds' dropping as manure, and a mistake in capital accounts of partners. The Managing Partner admitted to the income from the sale of culled birds during a survey, which was not disputed later. The Tribunal found no reason to interfere with the additions made by the Assessing Officer, as the assessee failed to provide any details to counter them.

Confirmation of Interest Charged:
The confirmation of interest charged under section 234B of the Act was upheld by the ld. CIT(A), as it was computed correctly by the Assessing Officer in accordance with the law.

Judgment and Conclusion:
The Tribunal sustained the reassessment orders for both assessment years, confirming the additions made and interest charged. The Tribunal dismissed the appeals filed by the assessee, upholding the orders of the ld. CIT(A) for both assessment years. The confirmation of the reassessment, addition of income from the sale of culled birds, and levy of interest under section 234B of the Act were maintained for both years. The appeals were ultimately dismissed by the Tribunal on 27th September 2017 at Chennai.