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2011 (7) TMI 728 - AT - Income TaxMAT - non inclusion of profit on sale of investments - profit directed credited to the general reserve account - Reopening - notice u/s 148 - Validity of notice - Profit and gains of any business of insurance - Time limitation - Rule 5 of Schedule-I - held that:- there is no provision in it for excluding from the book profits any profit accruing on account of sale of investments. Therefore, it can be said on a prima facie basis that income chargeable to tax has escaped assessment as understood under sub clause (i) of Clause-(c) of Explanation to Section 147. - minor errors in recording facts do not really alter the situation for the simple reason that the net effect is the same, namely, that profit on sale of investment had not been assessed to tax although it was liable to be taxed on a prima facie basis as per statutory provisions. Change of opinion - held that:- what is the baffling in this case is that the adverse decision of the Tribunal was available with the assessee, but the same was not pointed out to the Assessing Officer in any manner whatsoever, i.e., either by way of a note in the return or by way of a letter in the course of original assessment proceedings. - Since the income escaped assessment on account of withholding of relevant information, it is held that the Assessing Officer was within his right to reopen the assessment. Regarding addition - The language of the statute is clear that no adjustment is required to be made to the accounts furnished to the Controller of Insurance in respect of profit on sale of investments - Tribunal in the case of the assessee itself is a binding precedent, which has to be followed - These investments are in the nature of stock in trade as the value thereof is adjusted in the books at the end of each year with a view to find out appreciation or depreciation therein - Appeal is dismissed
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