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TMI Blog1999 (12) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... the closing stock relating to the chips could give rise to a reasonable belief as envisaged under section 147(a) of the Income-tax Act, and in that view in concluding that the Assessing Officer had the jurisdiction to initiate proceedings under section 147(a) of the Act, in a valid manner?" The facts of the case are that the assessee filed a return of income on June 30, 1977, declaring the total income at Rs. 1,52,12,656. This was revised on January 18, 1978, and a total loss of Rs. 2,85,77,361 was declared in the revised return. The Assessing Officer completed the assessment on September 6, 1980, by determining the total income of Rs. 1,80,63,239. The assessee-company is engaged in the business of mining iron ore and exporting the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of stock as shown in the above mentioned seized paper, the Department initiated proceedings under section 147 to assess the escaped income. It is an undisputed fact that the proceeding was in fact started by the Department under section 147(a) and not under section 147(b). Assessment was completed on September 19, 1984, by making addition of Rs. 70,98,570 to the value of the closing stock of iron ore which was confirmed by the Commissioner (Appeals). It was the plea of the assessee that it had truly and fully disclosed all the particulars relating to its closing stock, at the stage of the original assessment. It was argued that so far as the chips were concerned, the value of the said chips was nil and that the lumpy ores at mechanical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer that on account of omission on the part of the assessee to disclose the existence of this item, income chargeable to tax had escaped assessment. The Tribunal also found that so far as chips were concerned, the main argument of the assessee was that the value of this particular item was nil and, hence, the item had not been shown in the inventory of closing stock. The Tribunal however remarked that since the assessee was in the habit of showing this particular item in its closing stock for earlier years at the rate of Rs. 6 per ton, if the rate had gone down to nil in this particular year, it was certainly the duty of the assessee to have disclosed the existence of the stock, but at nil value. Ultimately, the Tribunal came to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of failure of the assessee to indicate the presence of the stocks relating to chips at the original assessment statement. The Assessing Officer could reasonably believe as required under section 147(a). The documents which were found though stated to be unsigned at the time of search and seizure were sufficient for initiation of proceedings under section 147(a). It is not necessary that in the proceedings under section 147(a), if any item is proposed to be added then finally it should be added by the Assessing Officer or should be upheld by the appellate authority. Even after initiation of the proceedings the assessee may satisfy a particular document or transaction that there is no escapement of income and the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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