9911796707
TMI Blog2005 (6) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has disputed the validity of reopening of assessment. Since in the cross objection the validity of assessment is challenged, we shall first deal with the cross objection furnished by the assessee. The ground raised in the cross objection reads as under : "That the learned CIT(A)-III, Ahmedabad has erred in facts and in law in not allowing the Ground No. 1 of the appeal filed by the assessee that the reassessment proceeding is without jurisdiction and bad in law being barred by time and being in contravention of settled legal principles for making reassessment." 3. At the time of hearing before us, it is submitted by the learned counsel that the assessment was reopened under section 148 after more than four years from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for interest when there was advance to the sister concern without charging interest. 5. We have carefully considered the arguments of both the sides and perused the material placed before us. Proviso to section 147 reads as under : "147. Income escaping assessment. If the Assessing Officer [has reason to believe] that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not in dispute that the assessee had furnished the return as required by section 139. Thus there is no failure on the part of the assessee to furnish the return of income. Therefore, the reopening of assessment can be upheld only if there was any failure of the assessee to disclose fully and truly all material facts necessary for his assessment. The reasons for reopening of the assessment have been recorded by the Assessing Officer which read as under : "In this case, assessee borrowed fund of Rs. 6,75,07,603 from Mardia Chemicals Ltd. and paid interest of Rs. 9,32,603. The assessee advanced fund of Rs. 7,62,02,127 to Nimit Mercantile Ltd. and did not charge any interest on fund advanced. Since the borrowed funds, were not utilized for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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