9911796707
TMI Blog2014 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee made full disclosure of the labour charges paid at the time of original assessment made by AO - assessee also deducted TDS on the job-work charges carried out by Shri Dhirubhai Sambhubhai Diyora and assessee filed TDS return with the department thereby disclosing relevant information - The decision in Gujarat Power Corpn. Ltd. V/s ACIT [2012 (9) TMI 69 - Gujarat High Court] followed - where the Assessing Officer during scrutiny assessment, notices a claim of exemption, deduction or such like made by the assessee, having some prima facie doubt raises queries, asking the assessee to satisfy him with respect to such a claim and thereafter, does not make any addition in the final order of assessment, he can be stated to have formed an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, it is impossible that the assessee would give these diamonds for processing to a person (Shri Dhirubhai Sambhubhai Diyora) with no experience and infrastructure and that persons would further give this work to some persons whose whereabouts were not knows to him" 2. Assessee has also filed Cross-objections disputing the validity of initiating re- assessment proceeding. 3. The relevant facts giving rise to this appeal are that the assessee filed its return of income on 1.11.2004 declaring total income of Rs.15,64,94,120/-. AO made assessment order u/s 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs.15,83,70,100/- vide assessment order dated 28.12.2006. Thereafter, AO initiated re-assessment proceedings and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by AO to initiate re-assessment proceeding. Ld. AR submitted that at the time of making the original assessment u/s 143(3) dated 28.12.2006, the AO examined claim of labour charges. He submitted that assessee is maintaining books of accounts regularly which are audited and the audit report was filed along with return of income. Assessee also deducted TDS on the job work charges carried out by Shri Dhirubhai Sambhubhai Diyora and the assessee also filed TDS returns etc. disclosing the relevant information at the time of original assessment proceedings. He referred the contents of letter dated 18.11.2008 placed at pages 34 to 42 of paper book. He submitted that re- assessment proceedings has been initiated merely for making roving inquiry an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. DR has also not disputed the fact that the assessee filed tax audit report along with the return of income. Further, assessee also deducted TDS on the job-work charges carried out by Shri Dhirubhai Sambhubhai Diyora and assessee filed TDS return with the department thereby disclosing relevant information. Thereafter AO completed assessment. At the time of hearing, ld. DR conceded that reasons recorded by AO to initiate re-assessment proceedings are not self-contained as no satisfaction of escaping of income has been recorded by AO in the reasons recorded to initiate the re-assessment proceedings. The Hon'ble Apex Court has held in the case of CIT vs. Kelvinator of India Ltd., 320 ITR 561(SC) that we must also keep in mind the conceptua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minous material, numerous exemptions and deductions. That if the Assessing Officer is burdened with the responsibility of giving reasons for several claims so made and accepted by him, it would even otherwise cast an unreasonable expectation which within the short frame of time available under law would be too much to expect him to carry. Therefore, the Hon'ble Gujarat High Court observed interalia at page 295 of the report as under : "We are, therefore, of the opinion that in a situation where the Assessing Officer during scrutiny assessment, notices a claim of exemption, deduction or such like made by the assessee, having some prima facie doubt raises queries, asking the assessee to satisfy him with respect to such a claim and thereafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2004) 266 ITR 462) (Cal) held that not only exist reasons for formation of the belief that income has escaped the assessment but there must also be a rational connection or relevant bearing with the materials for formation of the belief. The Amritsar Bench of the Tribunal in the case of Pyramid Software & Technologies V/s DCIT, Circle, Jammu [2007] 105 ITD 305 (ASR.) has held that the material, which comes to the notice of AO must be specifically evident, direct and not unspecific or vague. It is held that basis for initiating re-assessment proceedings is to be judged solely on the basis of reasons recorded by AO. AO cannot support re-opening of assessment by collecting the material or by making the inquiry subsequently after the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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