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2014 (12) TMI 1113 - BOMBAY HIGH COURTValidity of notice for reopening of assessment u/s 148 – Failure on its part to disclose truly and fully all material facts necessary for assessment or not - Held that:- The condition precedent to clothe the AO with jurisdiction to reopen an assessment are reason to believe that income chargeable to tax has escaped assessment (a mere change of opinion would not be reason to believe) - An additional jurisdictional condition for reopening of an assessment beyond a period of four years from the end of the relevant assessment year is the failure to truly and fully disclose all material facts necessary for assessment – the notice has been issued beyond a period of four years from the end of the relevant AY - the reasons itself indicate that it is on perusal of record and details filed by the Petitioner that claim of the Petitioner in respect of export of trading goods is concerned, is disproportionately higher - there has been no failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment. No invoice wise details of purchase of trading goods exported and failure to corelate the trading export with the purchases has resulted in failure to make a true and full disclosure - the reasons for re-opening cannot be supplemented by affidavits - The reasons have to be read as they are and cannot be improved upon by filing affidavits in Ajanta Pharma Ltd. Versus Assistant Commissioner of Income-Tax And Others [2003 (11) TMI 32 - BOMBAY High Court] wherein it has been held that the petitioners have categorically stated about the disclosure of details of trading goods exported along with direct cost of purchases for the assessment year along with their return and the fact also finds corroboration from the affidavit of the Assistant Commissioner of Income Tax wherein he has made a grievance only of non-furnishing of documents in support of those details - the reasons for issuance of notice did not disclose to be borne out from the records - the so called reasons are totally flimsy, as has been contended on behalf of the petitioners, and, by no stretch of imagination, can be said to be sufficient to draw the conclusion about escapement of income which could empower the authorities to invoke powers under Section 148 - there was no material on the basis of which the Department could have reopened the case in exercise of powers u/s 148. Set off of trading profits against the loss of manufactured exports for purposes of claiming deduction u/s 80 HHC – Held that:- The Petitioner had pointed out in its return of income that the loss on account of export of manufactured goods is ignored for the purpose of calculation of deduction u/s 80HHC of the Act as it is an incentive provisions - there was a complete disclosure – the notice is hit by the first proviso to Section 147 – in IPCA Laboratories v/s. Deputy Commissioner of Income Tax [2001 (7) TMI 99 - BOMBAY High Court] - the loss in any of the two segments has to be set off against the other for the purpose of determining the deduction available u/s 80HHC – thus, the notice u/s 148 is unsustainable in view of no failure on the part of the Petitioner to fully and truly disclose all facts necessary for assessment, the notice is set aside on the above ground alone – Decided in favour of assessee.
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