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TMI Blog2023 (8) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... alone, the notice issued u/s 148 has to be quashed. Moreover, in the computation of income that Petitioner filed along with Profit Loss Account, Petitioner has disclosed the business income and has deducted from the business income gain on Foreign Exchange Fluctuation. As during the course of assessment proceedings, Petitioner was called upon by a notice issued u/s 142(1) to furnish various details, one of which was copy of computation of income and annual accounts with annexures, if any, and copy of the E-return (Acknowledgment) filed for the year under consideration. Petitioner replied vide its letter and provided the computation of income with annual accounts with annexures. Subsequently, Petitioner received another notice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue, the Assessment has to be reopened. From this communication also, it is quiet clear that there has not been non-disclosure of any material fact but only change of opinion. Thus reasons for re-opening Assessment was not that of the AO alone issuing notice but he has acted merely on the dictates of another person for issuing the notice, i.e., audit department. Decided in favour of assessee. - K.R. SHRIRAM FIRDOSH P. POONIWALLA, JJ. For the Petitioner : Mr. Devendra Jain with Mr. Ashwin i/b. Radha Halbe. For the Respondents : Mr. Suresh Kumar. P.C:- Petitioner is engaged in business of manufacturing of flavors and fragrances. Petitioner filed its return of income on 30th November 2013 for Assessment Year 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. Act was completed on 31.10.2017 assessing income at Rs. 7,87,14,030/-. 3 It is seen from the records that the assessee had reduced and amount of Rs. 1,22,28,600/- on account of gain on foreign exchange fluctuation while computing business income. As per assessee s submission, this gain had accrued due to forex rate fluctuation on loan repayment which was a capital receipt. However, this amount is required to be treated as revenue receipt and added back to the total income of the assessee. 4 Thus, I have reason to believe that income in excess of Rs. 1,00,000/- chargeable to tax has escaped assessment in this case, for the assessment year 2013-14. The word reason in the phrase reason to believe would mean cause or justifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain on Foreign Exchange Fluctuation of Rs. 1,22,28,600/-. During the course of assessment proceedings, Petitioner was called upon by a notice dated 22nd July 2015 issued under Section 142(1) of the Act to furnish various details, one of which was copy of computation of income and annual accounts with annexures, if any, and copy of the E-return (Acknowledgment) filed for the year under consideration. Petitioner replied vide its letter dated 5th August 2015 and provided the computation of income with annual accounts with annexures. Subsequently, Petitioner received another notice dated 14th October 2015 issued under Section 142(1) of the Act when the scrutiny proceedings commenced, calling upon Petitioner to furnish in writing the 21 separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, on this ground also, the notice impugned in the Petition is required to be quashed and set aside. 7. Moreover, in the affidavit-in-reply filed by one Harish Kelkar, affirmed on 16th June 2023, it is admitted that the notice to re-open came to be issued in view of the audit objection raised. A copy of the audit objection has also been annexed to the affidavit-in-reply from which it appears that because for the subsequent year, i.e., Assessment Year 2014- 15, the Department had not accepted assessee s contention and added back the foreign exchange gain after treating it as revenue receipt, to take a consistent stand on the same issue, the Assessment has to be reopened. From this communication also, it is quiet clear that there has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the reasons for reopening, except stating in paragraph 3 that a sum of Rs. 7,66,66,663/- which was chargeable to tax has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary, there is nothing else in the reasons. In an unreported judgment of this Court in First Source Solutions Ltd. v. Asst. CIT [WP No. 2762 of 2019, dated 31-8-2021], relied upon by Mr. Pardiwalla, the Court held that a general statement that the escapement of income is by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment is not enough. The Assessing Officer should indicate what was the material fact that was not truly and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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