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TMI Blog2006 (10) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... about the contract receipts on which TDS of Rs. 1,38,400 was claimed. The assessee vide his reply dt. 20th May, 2003 explained the entire position that the gross contract receipts amounted to Rs. 65,94,595 and after considering certain expenses and making some further adjustments, the net freight receipts amounted to Rs. 8,59,685.42, which was to be reflected in the P L a/c furnished along with the return for the year in question. In this reply, the assessee also furnished details of gross receipts, other adjustments and expenses resulting into net freight of Rs. 8,59,685. Thereafter, the AO issued intimation under s. 143(1) after processing the return accepting the return declared as such. Thereafter, a notice under s. 148 was issued pursu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read as under: "Reason for initiating proceedings under s. 148(2): The assessee filed a return declaring total income of Rs. 1,00,542 and claimed refund of Rs. 1,02,507. The refund claimed as above was allowed after processing the return. Scrutiny of the assessee's record indicated that contract receipts on which TDS of Rs. 1,38,400 was claimed were not shown in the P L a/c. The auditor in his audit report has not made comments on the issue. However, before issue of refund, a clarification was sought from the assessee and it was stated by the assessee that the assessee has received from transportation amounting to Rs. 65,94,595. On the contract receipt TDS was made and in the P L a/c tanker freight (net) at Rs. 8,59,685 was declared. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. In the depreciation chart the assessee has shown cost of tanker upto 30th Sept., 2001 at Rs. 1,33,365 and after 30th Sept., 2001 at Rs. 71,500. It is not understood how cost of tanker was bifurcated in two periods. The assessee has claimed depreciation of 40 per cent on part of tanker's cost. The above facts clearly indicated that prima facie it is a case where the income was heavily understated by the assessee and for failure on part of the assessee to disclose correct in the return of income of the assessee as aforesaid has escaped assessment. Accordingly notice under s. 148 of the IT Act is hereby issued." 6. From the above, it is noticed that the first reason is against contract receipts of TDS of Rs. 1,38,400 which was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geable to tax has escaped assessment. The verification of the return by way of making assessment under s. 143(3) or s. 144 does not lay down any precondition about the escapement of income. The AO is empowered to scrutinise the return in order to verify that the assessee has furnished correct particulars of income. In contrast, s. 147 presupposes the belief of the AO about the escapement of income. If there are no reasons to believe that the income chargeable to tax has escaped assessment, the AO cannot invoke his jurisdiction by issuing notice under s. 148. He is, however, competent to make assessment under s. 143(3) or 144 notwithstanding any reasons to believe about the escapement of income. From the above, it is palpable that both the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll within the purview of s. 147 as it does not contemplate any specific income which, in the opinion of the AO has escaped assessment. Such type of facts can be verified only when the regular assessment is made. The last reason taken note of by the AO is about the depreciation chart in which the assessee has shown cost of tanker at Rs. 1,33,365 upto 30th Sept., 2001 and Rs. 71,500 after this date. It is obvious that according to the prevalent scheme for depreciation at the material time, the rate of depreciation was to be scaled down by 50 per cent, if the asset was not put to use for a period of 180 days. Here, the assessee has shown a particular cost of tanker upto 30th Sept., 2001 and other amount after the said date. It is not a case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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