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TMI Blog2009 (2) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. Mr. K.M. Parikh for the Respondent. JUDGMENT The judgment of the court was delivered by JUSTICE D. A. MEHTA - Considering the scope of controversy the petition is taken up for final hearing and disposal today. Rule. Learned counsel for the respondent authority is directed to waive service. 2. The petitioner is a Public Limited Company with which, another Public Limited Company named Narmada Chematur Petrochemicals Limited amalgamated with effect from 01.04.2005. Narmada Chematur Petrochemicals Limited shall hereinafter be referred to as 'the assessee'. The respondent Assessing Officer issued notice under Section 148 of the Income Tax Act, 1961 ('the Act') for Assessment Year 2002-2003. It is the said notice which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Jee Enterprises which are net of discount. As the assessee has not passed respective entries of discount through P L account it is not verifiable how much discount was given to Jay Jee Enterprise and which requires verification. Considering this, I have reason to believe that the assessment is escaped assessment to the extent of amount of discount given. 4. Issue notice u/s. 148 of the Act. Sd/- (G.R.KOKANI) Deputy Commissioner of Income Tax, Bharuch Circle , Bharuch." 4. On behalf of the petitioner, two fold contentions have been raised challenging the issuance of the impugned notice. The first being: the assessee is no longer in existence as on the date of the impugned notice, the assessee having merged with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons recorded the assessee having not made relevant entries in relation to the discount given to Jay Jee Enterprise it was not verifiable how much discount was given and said aspect was required to be verified. Hence the Assessing Officer had reason to believe that income had escaped assessment to the extent of amount of discount given. Responding to the first objection regarding amalgamation of the assessee with petitioner Company, it was submitted that at the relevant point of time, namely during the relevant accounting period, relatable to assessment year under consideration, the assessee Company was in existence and therefore this objection could not be treated as a valid objection. 6. It may be noted that after the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed and adopted for the purpose of the Act, which obliges the assessee (i) to treat the discount given on sales in a particular manner and (ii) to treat such discount as income and claim corresponding deduction. Whether any discount should be offered or not, and if offered, at what rate, is not an issue in the present context, because admittedly discount was offered by the assessee. Therefore, even reasonableness of the discount offered is not an issue. The stand of the respondent as stated in the reasons recorded is clear that income to the extent of amount of discount given has escaped assessment. In other words, the discount given is equated with income of the assessee. It is not possible to accept this equating of discount with in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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