TMI Blog2001 (7) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Act, on February 28, 1972. The said assessment was set aside on appeal by the Appellate Assistant Commissioner by his order dated June 20, 1972, and the assessment was again made on March 28, 1973. The controversy arose in the matter in respect of allowance of grinding charges for a sum of Rs.5,34,349.55 paid by the petitioner to one Allied Industries and Commercial Corporation of Calcutta. According to the petitioner, the same were allowed in the assessment made on February 28, 1972, as well as in the subsequent assessment made on March 28, 1973. It is further pertinent to mention here that the appeals and other proceedings were not in respect of the said deduction allowed in the assessment by the said authorities. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information with regard to the facts previously disclosed come into his possession which tends to expose the untruthfulness of those facts. The Supreme Court has also held that it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. He also contended that whether the material had any rational connection or a live link for the formation of the requisite belief. It would be immaterial whether the Income tax Officer, at the time of making the original assessment, could or could not have found by further enquiry or investigation, whether the transaction was genuine or not if, on the basis of subsequent informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... save and except in the calendar year 1968, relevant to the assessment year 1969-70. (ii) At the time of tour at Renukoot during February/March, 1978, he wanted to see the original bills of Allied Industries and Commercial Corporation but was told that the original bills were not traceable. Transporter's bills, however, were produced but no evidence could be produced that the goods were unloaded at Calcutta or any grinding operation was done at Calcutta or that the goods were again loaded at Calcutta after grinding. The truck which loaded C.P. Coke from Gauhati reached Renukoot with the same C.P. Coke. No document or paper was produced in support of payment of grinding charges. (iii) Local enquiries were made but Allied Industries and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries and Commercial Corporation could not be traced after ten years that cannot give any right to reach that the transaction was a fictitious one in view of the fact that the Income-tax Officer did accept that the said concern had bank accounts and in fact payments were made by cheques and the cheques were encashed by them. Therefore, there is no material to form any belief that the expenditure claimed by the petitioner was fictitious. He further contended that the most significant fact is that the Income-tax Officer had not specified in the reasons recorded as to what material fact was not fully or truly disclosed by the petitioner in the original assessment proceedings. The Income-tax Officer. sought to act on mere suspicion but as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that Kantamani Venkata Narayana and Son's case [1967] 63 ITR 638 (SC), has no application in the present case. He also contended that A. Raman and Company's case [1968] 67 ITR 11 (SC), deals with section 147(a) and has also no application in the present case. Shyam Jewellers v. Chief Commissioner (Administration) [1992] 196 ITR 243 (All), also has no application as the decision deals with search, seizure and survey under sections 132 and 133A and has no application to the facts of the present case. In respect of CIT v. Agarwalla Brothers [1991] 189 ITR 786 (Patna), he also contended that the High Court was pleased to hold that the reassessment proceedings were not valid since there was no failure to disclose primary facts on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to turn around and say: "You accepted my lie, now your hands are tied and you can do nothing". It would be a travesty of justice to allow the assessee that latitude. It is a fact that the petitioner was given an allowance in respect of the grinding charges which has been claimed by the petitioner in the original return filed by them for the assessment year 1969-70. After taking into account the facts cited before me it appears that the Income-tax Officer subsequently found that the income chargeable to tax had escaped assessment and the assessee had not made full and true disclosure of the material facts. Accordingly, he issued the notice on such belief under section 148 in the instant case. It is also a fact that the Income-tax Officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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