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TMI Blog2015 (1) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment can be validly ordered should necessarily be based on “tangible material” which an A.O. comes by after the assessment. Necessarily, such material is outside the record. Straying from this clear path would be sliding down the slippery slope into a quagmire of re-appreciation of existing material and -even the process of reasoning which is impermissible as it is a forbidden “merits review”. Reassessment, if permitted in such instances would be a route which (to borrow the phrase from another context) “unlocks the gate which shuts” the A.O’s review on merits. Appeal dismissed. - Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... eassessment notice, this time alleging that exemption claimed under Section 10(29) was inadmissible. He sought to add back a sum of ₹ 15,90,10,698/-. This was premised also, inter alia, on the footing that Section 37 could not have been sought recourse to, by the assessee in the circumstances. This reassessment notice (hereinafter called the "first reassessment notice") was set aside by the Appellate Commissioner on 25.10.2007. The matter attained finality. 2. Yet again, on 20.12.2007, the A.O. issued a second reassessment notice under Section 147 - this time not only including the amounts sought to be added earlier, but also other amounts such as prior period expenses, deferred expenditure claimed for purchase of dunnage, its treatm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as evident from the above discussion that the second reassessment notice was based upon re-appreciation of the original record. This Court notices that the CIT as well as ITAT have concurrently ruled that whatever material or explanation in respect of the issues sought to be raised in the second reassessment notice to the assessee were part of the record and could have been noticed in the first reassessment proceedings. 5. Furthermore the CIT(Appeals) and the ITAT considered elaborately on the merits of the addition and held that the effort of the assessing officer to bring such amounts to tax was not justified. The ITAT pertinently noticed as under : "The formation of such belief exhibiting the escapement of income or the reasons should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness or not. Assessing officer thereafter referred to certain expenditure. In the questionnaire issued on 14.01.2005 at Sr. No.5, Assessing Officer called for the explanation of assessee on one item is :- "Expense incurred on engineering division has been charged to revenue instead of capitalizing it with the project/capital assets." Apart from this one query, the assessee has placed on record details of all other expenses referred by the Assessing Officer in the reasons. The learned counsel for the assessee at the time of hearing, referred Schedule No.5 at page Nos.125 & 126 of the paper book which contains details of miscellaneous expenses on page 125 at Sr.No.5, assessee has made a reference to deferred revenue expenses written off. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst instance, he did not make reference to these aspects though he made a reference to the allowability of expenses under Sec. 37 of the Income Tax Act, 1961. In view of the above discussion, we are of the view that assessee has demonstrated on the record, that all facts relevant for the assessment of its income have been declared by it fully and truly." 6. This Court had in the judgment reported as Honda Siel Power Products Ltd. V. DCIT 340 ITR 53 held that page 81 para 13 held that a question as to whether there is failure or omission to disclose fully and truly material facts as essentially one of fact. This was affirmed by the Supreme Court in Honda Siel Power Product V. DCIT 340 ITR 64 (SC). The Supreme Court ruling in Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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