The cases of certain assessees owning power looms not to be selected for scrutiny assessment—regarding - Income Tax - 04/2003

The cases of certain assessees owning power looms not to be selected for scrutiny assessment—regarding. Circular No. 4 Dated 14/5/2003 To All the Chief Commissioners/Directors General of Income-tax. Subject : The cases of certain assessees owning power looms not to be selected for scrutiny assessment—regarding. The Central Board of Excise and Customs, Department of Revenue, has amended the CENVAT Credit Rules, 2002, vide Notifications No. 25 of 2003-Central Excise (N. T.), dated 25th March, 2003 and No. 35 of 2003-Central Excise (N. T.) dated 10th April, 2003. The new rule 9A of CENVAT Credit Rules, inter alia, provides that a manufacturer, producer, first stage dealer or second stage dealer of yarn and unprocessed fabrics or a manufacturer of processed fabrics, who is unable to produce the document evidencing actual payment of duty, shall be granted to avail credit, calculated on the basis of rates notified by the Central Government, on inputs lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of each of such goods. 2. In this connection, the Finance Minister in his speech in Lok Sabha on 30th April, 2003, has also made the following announcement : "I had also taken a number of measures to simplify the procedures for registration and filing of returns. A mechanism for getting one time credit on inputs in stock as on April 1, 2003, without the requirement of producing any duty paying documents, has already been prescribed. Let me further announce that it is possible that a number of power-loom owners have until now not been filing any income-tax returns. They may not even have proper books of account. However, they may now wish to declare their stocks for the purposes of CENVAT. Therefore, to encourage new assessees from the power-loom sector to come into the mainstream, the Income-tax Department will encourage power-loom owners to declare their stocks. Wherever the value of stocks declared, do not exceed Rs. 10,000 per powerloom, such declaration will not be subject to any scrutiny for tax purposes. Also, this will not have any retrospective application or consequences." 3. It is hereby clarified that where an assessee, being an owner of powerlooms, files an income-tax return for the first time for the assessment year 2004-05, the same shall not be selected for scrutiny, provided the assessee makes a true disclosure of his stock of yarn and finished goods not exceeding Rs. 20,000 per power-loom, and furnishes along with the return of income evidence in support of ownership of power-looms in his name. And as announced by the Finance Minister, this will not have retrospective application or consequences. 4. The contents of this circular may be brought to the notice of all the officers working in your region. Yours faithfully, (Sd.) Suraj Bhan Nain, Director (TPL-IV). [F. No. 153/48/2003-TPL]