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TMI Blog2010 (10) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... n record and several proceedings were initiated in the past in respect of the same subject-matter - the action of the AO in issuing the notice of reopening, in the background of all previous proceedings initiated by the Revenue, is not justified. - Special Civil Appln. No. 7779 of 2000 - - - Dated:- 19-10-2010 - K.A. Puj, Harsha Devani, JJ. J.P. Shah with Manish J. Shah for the Petitioner B.B. Naik for the Respondent JUDGEMENT K.A. Puj, J:- 1. The petitioner-assessee has filed this petition under Art. 226 of the Constitution of India praying for quashing and setting aside the impugned notice dt. 7th April, 2000 issued under s. 148 of the IT Act, 1961 for the asst. yr. 1993-94. 2. This Court has admitted the petition and rule was issued on 16th Aug., 2000. At the time of issuance of notice this Court has observed that the question of taxability of the whole amount of Rs. 68,66,673 received as a result of cancellation of forward exchange contract, which is said to include the disputed amount of interest, is the subject-matter of a pending Tax Appeal No. 140 of 1999 between the same parties. The Court, therefore, directed that the hearing of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that sum of Rs. 68,66,673 is not liable to be taxed. 6. Subsequent to this, the AO issued notice under s. 148 of the Act on 3rd Feb., 1995 for this very assessment year, inter alia, in respect of amount of Rs. 68,66,673. The said notice was challenged by way of writ petition being Special Civil Appln. No. 1190 of 1995 before this Court and this Court vide its order dt. 26th June, 1996 quashed and set aside the said notice and it is specifically held that there is nothing to indicate that there was failure on the part of the assessee to make a return of its income and to disclose fully and truly all material facts necessary for his assessment. 7. The earlier notice of reopening was issued by the AO within a period of 4 years from the end of the assessment year and this Court has quashed the said notice on identical facts as they are in the present petition. Not only this, the Department's Special Leave Petition filed before the apex Court against the judgment of this Court was also dismissed by the apex Court. 8. After the above notice came to be quashed by this Court, the CIT exercised his power under s. 263 of the Act for revising the assessment and issued a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r counsel appearing for the Revenue, on the other hand, has submitted that the petitioner has failed to disclose in the return of income the primary facts in the sense that once the petitioner has claimed the receipt of Rs. 68,66,673 as a capital receipt as a natural corollary, the said amount has to be deducted from the block of assets while making computation of income with reference to the adjustment of claim for depreciation on such assets to which such capital receipts were linked. He has further submitted that the assessee has also not disclosed primary facts with reference to interest element at assessment stage, therefore, such income part in the forward contract which could not be less than 12 per cent of the entire receipt, although such details have been deliberately concealed, has escaped assessment due to failure of the assessee to disclose true nature of the receipts with reference to the interest elements embedded therein chargeable to tax was wrongly excluded. He has, therefore, submitted that the income of Rs. 8,24,000 by way of interest and Rs. 15,10,668 by way of depreciation chargeable to tax has escaped assessment for failure of the assessee to furnish true and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court. While dismissing this appeal the Court has considered the entire facts and circumstances of the case and also taken note of the previous proceeding initiated under s. 148 of the Act. The Court has observed in respect of the reassessment proceeding that while framing original assessment the AO has considered the entire material and was satisfied about factual and legal aspects and, thereafter, applied the judgments of the apex Court in favour of the assessee. Thus, it can be said that though the reassessment proceedings were quashed and set aside, the Court had taken note of the basic facts, which remain the same even today. The Court has also considered the interest component and observed that undue emphasis on behalf of the Revenue by picking up one sentence out of the entire order and trying to build a case thereon to submit that at least some portion of the surplus was relatable to interest and thus on revenue account does not merit acceptance. In the concluding para of the judgment the Court has categorically held that the Tribunal was justified in law in holding that the surplus received on cancellation of forward foreign exchange contract was a capital receipt not l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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