9911796707
TMI Blog2021 (2) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... a uniform system. The accounts of the petitioner would reveal the receipt of processing fee in advance and recognition of the amount quantified in that year in relation to deliveries is that have taken place within the financial year in question as income. The remaining fee is carried over to the subsequent financial year. Assessments for previous and later years following this consistent method of accounting have been accepted. The details in relation to the entirety of the processing fee received and the component recognised as income in this year are also available. In this case, admittedly, there is no change in the method of accounting followed. The methodology followed for recognition of revenue is the same, both prior and subsequent to this assessment. Thus there appears no justification for the present proposal to re-assess the income, seen in the light of the fact that for previous years, the accounts of the petitioner have been accepted by the Department. Proceedings for re-assessment have been initiated beyond a period of four years from the end of the relevant financial year - petitioner has made a disclosure of i) revenue from all income streams including process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner challenges order dated 02.12.2019 rejecting the objections to the assumption of jurisdiction for re-assessing income in relation to assessment year (A.Y.) 2012-13, in terms of the provisions of the Income Tax Act, 1961 ( in short Act ). 2. Heard Mr.N.V.Balaji, learned counsel for the petitioner and Mrs.Hema Muralikrishnan, learned Senior Standing Counsel for the respondents. 3. Five issues have been identified for re-assessment. Upon instructions from the Assessing Authority, learned Senior Standing Counsel would fairly state that issues at 1 and 5 are not seriously pressed. 4. As far as Issue No.1 is concerned, income from storage of stem cells have been offered to tax in the Vivad se Vishwas Scheme and as such, the question of re-assessment in regard to such incomes does not arise. 5. As far as Issue No.5 in relation to the payment of tax on Provident Fund and ESI contributions is concerned, the issue stands covered by a decision of this Court in the case of Industrial Securities and Intelligence India V. CIT in T.C.(A)Nos.585 and 586 of 2015 dated 24.07.2015. Hence, the reassessment initiated on this score would not be pursued. 6. As far as Issue No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no change in the method of accounting followed. The methodology followed for recognition of revenue is the same, both prior and subsequent to this assessment. Thus there appears no justification for the present proposal to re-assess the income, seen in the light of the fact that for previous years, the accounts of the petitioner have been accepted by the Department. 11. In the context of deductibility of expenditure, the Bench states that a relevant parameter would be to ascertain whether, the same system of accounting were followed by an assessee from the very beginning and if there was any change in the interregnum, whether the change was bonafide. It was also material to ascertainwhether the method adopted by an assessee for making entries in the books of accounts is as per nationally accepted accounting standards. At paragraph 34, the Bench states as follows: 34. Section 145(1) enacts that for the purpose of Section 28 and Section 56 alone, income, profits and gains must be computed in accordance with the method of accounting regularly employed by the assessee. In this case, we are concerned with Section 28. Therefore, Section 145(1) is attracted to the facts of the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assesses, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the assesses, or discovered by him on the basis of the facts disclosed, or otherwise - the assessing authority has to draw inferences as regards certain other facts; and ultimately, from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain in come received by an assessor's capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and, taking all these together, to decide what the legal inference should be. 10. There can be no doubt that the duty of disclosing all the prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch inferences. The Bench in Calcutta Discount (supra) states that this exercise would be impossible since no assessee could delve into the mind of an Assessing Officer to assume what such inferences might be. To this end, at paragraph 11, the Bench states as follows: 11. Does the duty however extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else - far less the assessee - to tell the assessing authority what inferences, whether of facts or law, should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences - whether of facts or law - he would draw from the primary facts. 16. Applying this judgment to the facts of the present case, the petitioner has made a disclosure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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