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2017 (8) TMI 243 - DELHI HIGH COURTReopening of assessment - Allowability of addition made on account of closing stock - change in accounting policy of the company - Held that:- The reopening of the assessment in the present case is sought to be made after four years after the original assessment order was passed under Section 143(3) of the Act. The first proviso to Section 147 is straightaway attracted. It mandates that there must be failure on part of the Assessee to make a full and true disclosure of all material facts necessary for the assessment. With regard to the addition sought to be made by the impugned order, the Petitioner did make a full and true disclosure of all material facts. Note-2 to the accounts which explained the change in the method of valuation of the closing stock. In fact, the AO himself acknowledged the mistake of overlooking that note. He, therefore, accepted the application filed by the Petitioner under Section 154 of the Act and rectified the assessment order by the subsequent order dated 4th March, 2013. These facts have been completely overlooked by the AO while seeking to reopen the assessment. The observation that the Assessee did not make a disclosure of the changed method of valuation is plainly contrary to the records. On the face of it, the reopening is unsustainable in law. There is another question urged by the Petitioner regarding the failure of the AO to comply with the procedure explained by the Supreme Court in GKN Driveshafts (India) Ltd v. Income Tax Officer [2002 (11) TMI 7 - SUPREME Court] is left open for decision in an appropriate case. Reopening set aside. - Decided in favour of assessee.
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