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TMI Blog2017 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and law. Accordingly, the assumption of jurisdiction u/s 147 is unsustainable in the instant case in view of the decision of Hon’ble Delhi High Court in the case of Purolator India Ltd.(2011 (11) TMI 365 - DELHI HIGH COURT ) - Decided in favour of assessee. - ITA No. 1190/Del./2013 And ITA No. 1198/Del./2013 - - - Dated:- 12-4-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Sh. Rupesh Jain, Advocate Ms. Bhavita Kumar, Advocate For The Revenue : Sh. S.S. Rana, CIT/DR ORDER Per L.P. Sahu, Accountant Member: These are two cross appeals filed by the assessee and the Revenue against the order of ld. CIT(A)-X, New Delhi dated 27.12.2012 for the assessment year 2002-03. Both the parties have raised following grounds in their respective appeals : Grounds raised by assessee : Ground No.1: 1. That the Ld. CIT (Appeals) erred on facts and in law in not holding that the reassessment order dated 1 6.12.2009, passed under section 147/143(3) of the Act was beyond jurisdiction, bad in law and void abinitio. 1.1 That the Ld. CIT(Appeals) erred on facts and in law in not appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short levy of tax by ₹ 48,98,576/-. 2. An amount of ₹ 13,42,55,743/- (7,45,86,060 +5,96,69,683), which was material in transit not take in closing stock of the P L A/c, resulted in under assessment of income and involving short levy of tax by ₹ 6,72,20,843/-. 3. Prior period expenses of ₹ 77,57,175/- were debited to P L account on account of adjustments pertaining to earlier year. This mistake resulted in under assessment of tax by ₹ 38,83,954/-. In view of above, I have therefore, reason to believe that an amount of ₹ 15,17,96,576/- has escaped assessment within the meaning of section 147(b) of the IT Act, 1961. 3. The assessee objected to the reopening of assessment which was rejected by the Assessing Officer and the assessment was completed by making following additions : (i). Capital Expenditure(Advertisement Sales Promotion expenses) 97,83,658/- (ii). Undervaluation of closing stock For material in transit 13,42,55,743/- (iii). Prior period expenditure debited to PL A/c. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O could not examine the same. Therefore, it is not justified to say that there was no failure on the part of assessee to furnish all material facts necessary for assessment. Reliance is placed on the following decisions : (i). Reymond Woollen Mills Ltd. vs. ITO, 236 ITR 34 (SC) (ii). Yuvraj vs. Union of India(Bom), 315 ITR 84. (iii). R.K. Malhotra vs. ITO, 109 ITR 537 (SC). 7. We have carefully considered the rival submissions, relevant material on record and the decisions cited by both the parties. In the instant case, proceedings u/s 147 of the Act were admittedly initiated by the ld. AO after expiry of four years from the end of relevant assessment year. As such the reassessment in the instant case has to be tested on the anvil of proviso to section 147 of the Act which stipulates as under: Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond the disclosure of all material facts necessary for his assessment. It is thereafter the duty of AO to properly apply its mind on the facts and law. Accordingly, the assumption of jurisdiction u/s 147 is unsustainable in the instant case in view of the decision of Hon ble Delhi High Court in the case of Purolator India Ltd. reported in 343 ITR 155 (Del) wherein it has been held as under:- 10. In the present case, there is no indication that the assessee had failed or omitted to disclose the material or primary facts. These were available on record. The assessing officer, it is stated, had failed to draw correct legal inferences at the time of original assessment from the said primary facts. This is not an error or omission on the part of the respondent-assessee. It is not alleged that the assessee had suppressed, misrepresented or falsified the record/facts. It is not alleged that there was any subsequent factual information on the basis of which it was found that the assessee had not fully disclosed the primary facts or had falsified or disclosed incorrect primary facts. . .. 11. Recently in Atma Ram Properties (P.) Ltd. v. Dy. CIT [2011] 203 Taxman 408 (Del ..... X X X X Extracts X X X X X X X X Extracts X X X X
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