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TMI Blog2015 (10) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under Section 148 dated 28.03.2013 and the impugned order dated 18.02.2014 are set aside and the re-assessment proceedings in respect of the assessment year 2006-07 stand quashed. - Decided in favour of assessee. - W. P. (C) 1772/2014 & CM 3695/2014 - - - Dated:- 29-9-2015 - Badar Durrez Ahmed And Sanjeev Sachdeva, JJ. For the Petitioner : Mr M. S. Syali, Sr Advocate with Ms Husnal Syali, Mr Mayank Nagi and Mr Harkunal Singh For the Respondent : Mr Rohit Madan with Mr Zoyeb Shaikh and Mr Ajay Kshatriya JUDGMENT Badar Durrez Ahmed, J (Oral) 1. This petition is directed against the notice dated 28.03.2013 issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the said Act ), whereby re-assessment of the income for the assessment year 2006-07 was initiated. The petition is also directed against the order dated 18.02.2014, whereby the Assessing Officer rejected the objections taken by the petitioner. 2. The original assessment was completed under Section 143(3) of the said Act on 04.12.2009. Since the brought forward losses of the Delhi Unit had not been accounted for in the assessment order, the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission to do so resulted in incorrect allowance of deduction of ₹ 108380645/- u/s 10B. There is a failure on the part of the assessee to furnish complete details of brought forward losses, unitwise and its allowabiltiy against the current income before claiming the deduction. 4. On perusal of records revealed that goods in transit of ₹ 1,77,53,040/-and stores spares of ₹ 1443503/- was not taken into account while crediting the closing stock in P L account which resulted in under valuation of closing stock and consequently resulted in under assessment of income by like amount i.e. by ₹ 1,91,96,543/-. There is a failure on the part of the assessee to disclose the method of accounting followed by it in respect of the goods in transit and stores spares. There is further failure on the part of the assessee in showing the same as closing stock and thereby suppressing the assessable profits. I have therefore, reason to believe that an amount of ₹ 17,39,27,754/- has escaped assessment within the meaning of section 147(c) of the IT Act, 1961. The escapement of the income has been by the reason of failure on the part of the assessee to disclose fully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails of valuation of stock as on 31.03.2006. It disclosed that the assessee had deducted provision for obsolete goods in respect of both traded goods and manufactured goods to the extent of ₹ 2,73,11,377/- and ₹ 3,26,396/-, respectively. The sum of these two figures adds up to ₹ 2,76,37,773/-, which is the amount referred to in the first reason given in the purported reasons for re-opening the assessment. This point was also taken in the objections preferred by the assessee before the Assessing Officer. But, we find that no heed has been taken thereof. All that this discloses is that the very point which is now sought to be raised in the re-assessment proceedings had been examined and considered by the Assessing Officer in the original assessment proceedings. Therefore, this issue cannot now be raised as it would be a mere change of the opinion. Apart from this, there was full disclosure on the part of the assessee to the specific queries raised by the Assessing Officer and, therefore, the re-assessment proceedings, being beyond four years, even the conditions stipulated in the proviso have not been satisfied. 8. The second reason for initiating re-assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and, therefore, the only conclusion that can be arrived at is that the second reason was also a mere change of opinion which cannot be permitted. This is apart from the fact that nothing new has been brought to the fore by the Assessing Officer and all the details were available with the Assessing Officer at the time of the original assessment. Therefore, there can be no failure on the part of the assessee to disclose full and true particulars of its income for the purposes of assessment. 12. The third reason given in the purported reasons to believe that income had escaped assessment pertains to an allegation that an incorrect allowance of deduction of ₹ 10,83,80,645/- had been given to the assessee when it was not eligible for the same. The learned counsel for the petitioner pointed out that the sum of approximately ₹ 10.83 crores was exempted income of the assessee in respect of the 100% EOU Unit at Pune under Section 10B of the said Act. Therefore, it is incorrect to suggest that it was a deduction. It was an exemption. Furthermore, even if, for the sake of arguments, it is taken that the brought forward losses and unabsorbed depreciation were to be adjusted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases had not been claimed as a deduction. 15. We may also point out that in CIT v. Usha International: 348 ITR 585 (Delhi) (Full Bench), it was clearly held as under:- 13. It is, therefore, clear from the aforesaid position that: (1) xxxx xxxx xxxx xxxx (2) xxxx xxxx xxxx xxxx (3) Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons. 16. In the present case, this is exactly what has happened as queries and issues have been specifically raised and answered by the assessee in the original assessment proceedings. Thus, even though the Assessing Officer did not make any addition in the assessment order, it would have to be accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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