9911796707
TMI Blog2019 (1) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... n clear terms therefore, there was no failure on the part of the assessee to disclose truly and fully all material facts. Revenue however submitted that one of the issues raised by the Assessing Officer is that the activity carried on by the assessee does not amount to manufacturing activity. In the present petition, it is not necessary for us to comment on this aspect of the matter. What is important however is such belief also the Assessing Officer has formed on the basis of material already on record. Looked from any angle, the AO cannot justify issuing the notice of re opening of assessment beyond the period of four years from the end of relevant assessment year. - AKIL KURESHI AND M.S. SANKLECHA, JJ. Mr. Nitesh Joshi with Mr. Atul Jasani with Mr. Ashok Boghani i/by M/s. Ashok Boghani Co. for the Petitioner. Mr. Akhileshwar Sharma for the Respondents. P.C.: 1. Heard learned counsel for the parties for final disposal of the petition. Petitioner is a limited company. The petitioner has challenged a notice of re opening of assessment dated 24th September, 2018 issued by the respondent No.1 Assessing Officer to re open the petitioner's assessment for the assessment year 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of manufacture given in Section 2(29BA) of the IT Act, 1961 the deduction would not be available on sale of the edible coconut oil effected by these tow units, as only refining and packing are the only activity undertaken by them and no edible oil is manufactured as raw coconut is also edible oil and this activity do not amount to manufacturing or production. Similarly, in the case of the product called Hair Oil also, the activity does not amount to manufacture as per the definition of manufacture/produce given in the Act. Further, as per Clause 28 of Form 3CD, some part of the finished goods were produced from others and thus entire quantity of goods cannot be treated as eligible for deduction. It is also to be noted that as per Schedule Q appended to the P L account, volume of sale of edible oil is many times more than the sale of hair oil and other items. Considering the volume of sales of the assessee of different items, not even 25% of the volume of the sale effected in the above mentioned three units qualify for deduction u/s 80IB (4) or 80IC as claimed and allowed. However, adopting a very moderate calculation, at least 50% of the deduction allowed needs t be wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing other income from the ambit of the claim in respect of the respective units. However, while reallocating rent storage charges, instead of reducing the these charges, the same was added to the income resulting in the assessee getting more eligible income and thereby was allowed more deduction in respect of Pondicherry, Dehradun 1 and Dehradun 2 undertakings as shown below. Name of undertaking Pondicherry Dehradun- 1 Dehradun -2 Income of the unit shown 2458652428 19204857 183131882 Rent Storage charges added by AO 39923130 2382310 2138101 Total income with rent storage charges 2498575558 21587166 185269983 Income on reducing the rent storage charges 2418729298 16822547 180993781 Other income reduced by AO 198799113 6460461 4169950 Net income eligible for deduction 2219930185 10362086 176823831 Income shown as eligible by AO 2299776445 15126705 181100033 Difference 798446260 4764619 4276202 Excess deduction allowed (30% of above) 23953878 1429386 1282861 26666125 From the above table it is clear that Assessee Company has been allowed excess claim to the tune of ₹ 2,66,66,125/ while reallocating the expenses. Therefore I have a reason to believe that excess deduction of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore I have a reason to believe that provision of ₹ 13,88,00,000/ has been escaped from the assessment of income. 4) Since 4 years from the end of the relevant year has expired in this case, the requirement to initiate proceedings u/s 147 of the Act are reason to believe that income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year under consideration. 5) It is true that the assessee has filed a copy of annual report and audited P L A/c and balance sheet alngwith return of income where various information/material were disclosed. However, the requisite full and true disclosure of all material facts necessary for assessment has not been made. It is pertinent to mention her that even though the assessee has produced books of accounts, annual report, the requisite material facts as noted above in the reasons for reopening were embedded in such a manner that material with due diligence, accordingly attracting provisions of Explanation 1 of section 147 of the Act. 6) It is pertinent to mention here that reason to believe that incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing an order dated 24th September, 2018 upon which this petition has been filed. 5. Upon hearing learned counsel for the parties and upon perusal of the documents and record, what we gather is that the notice of re opening of assessment has been issued beyond the period of four years from the assessment year. The reasons recorded by the Assessing Officer are elaborate and refer to various issues on which he wishes to carry out the reassessment. However, the central theme which passes though all these issues is that the Assessing Officer had gathered the information and material from the record of the assessment. For example in Paragraph No.3 of the reasons which contains several sub paragraphs which are different elements of the grounds for re assessment begins with the expression On perusal of the record for the assessment year 2011 12, the following issues were found . Thus, with reference to various issues arise on the basis of the perusal of the record of the assessment year in question. Clearly, therefore, there is no material alien to the record which the Assessing Officer has referred to for issuing the impugned notice. Further, almost for every ground which is part of vari ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
