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2013 (12) TMI 61 - AT - Income TaxValidity of Reassessment u/s 147 Held that - There are no reasons on the basis of which prima facie it can be said that income has escaped assessment. The Ld. CIT(A) was also convinced that reopening is based on the facts which were already on record - It cannot be said that the assessee has failed to disclose fully and truly all material facts - The reopening of the assessment is beyond a period 4 years therefore, the pre-condition for the applicability of Sec. 147 is that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment - Following the decision in case of Titanor Components Ltd., Vs ACIT 2011 (6) TMI 138 - Bombay High Court - There is a well known difference between a wrong claim made by an assessee after disclosing all the true and material facts and a wrong claim made by the assessee by withholding the material facts fully and truly - Decided against Revenue.
Issues:
1. Validity of quashing the 147 proceedings for computation of export turnover under Section 10A. 2. Excessive deduction claimed under Section 10A and exclusion of prescribed expenses from export turnover. 3. Requirement to exclude expenses from export turnover and total turnover based on court decisions. Issue 1: The Revenue appealed against the order of the Ld. CIT(A) quashing the 147 proceedings for the assessment year 2004-05. The Revenue contended that the assessee computed export turnover for Deduction u/s. 10A in contravention of the provisions, leading to income escapement. The AO initiated proceedings u/s. 147 based on the claim of deduction u/s. 10A made by the assessee. The Ld. CIT(A) held that the reassessment was invalid as there was no failure to disclose material facts, and the reopening was beyond the 4-year period. The Tribunal upheld the Ld. CIT(A)'s decision, citing the necessity for the assessee to fully and truly disclose all material facts for a valid reassessment. Issue 2: The second ground of appeal involved the excessive deduction claimed under Section 10A and failure to exclude prescribed expenses from the export turnover. The AO disallowed the excess claim of deduction made by the assessee for both units, recalculating the deduction amounts. The Ld. CIT(A) considered the submissions of the assessee and concluded that there was no prima facie evidence of income escapement. The Tribunal upheld the Ld. CIT(A)'s decision, emphasizing the need for a valid reason for reassessment beyond the 4-year period. Issue 3: The third issue revolved around the requirement to exclude expenses from export turnover and total turnover based on court decisions. The Ld. CIT(A) referred to the decision of the Hon'ble Bombay High Court in CIT vs. Gem Plus Jewellery India Ltd., emphasizing the need to exclude expenses from both turnovers. The Tribunal confirmed the Ld. CIT(A)'s decision to quash the reassessment order, stating that the reassessment was beyond the permissible period and lacked a valid reason for income escapement. The Tribunal dismissed the Revenue's appeal, upholding the Ld. CIT(A)'s order. In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the Ld. CIT(A)'s decision to quash the reassessment order u/s. 147 for the assessment year 2004-05. The Tribunal emphasized the importance of fully disclosing all material facts for a valid reassessment and upheld the Ld. CIT(A)'s findings regarding the computation of export turnover, excessive deduction claims, and the exclusion of expenses from turnovers based on relevant legal precedents.
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