Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2007 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (2) TMI 173 - HC - Income TaxChallenge the notice issued u/s 148 - reopening of the assessment - claiming depreciation on the goodwill - full and true disclosure of material facts - HELD THAT:- It is seen that the petitioner had agreed to purchase Baramati unit as a going concern on as is where is basis for Rs. 23 crores plus goodwill amounting to Rs. 4.30 crores with effect from the specified transfer date, that is from March 31, 1998. It is recorded in the agreement that if any of the conditions precedent are not fulfilled, the transfer date shall be shifted to April 30, 1998. It is not known as to whether the transfer date was shifted to April 30, 1998, on account of non-fulfilment of the conditions precedent set out in the agreement. In any event, in the tax audit report relating to the financial year April 1, 1998, to March 31, 1999 (assessment year 1999-2000), the goodwill at Rs. 4.30 crores is shown in the opening block of fixed assets, which obviously means that the goodwill was acquired prior to April 1, 1998, and accordingly in the tax audit report for the assessment year 1999-2000, no depreciation is claimed on the goodwill. Thus, there were mutual contradictions in the tax audit report and the return of income filed by the petitioner regarding the date of acquisition of the goodwill. In these circumstances, we find it difficult to accept the contention that the petitioner had made full and true disclosure of material facts. In view of this apparent contradiction in the material facts, it is difficult to hold that in the assessment order passed u/s 143(3) of the Act, a conscious decision was taken to the effect that the goodwill was acquired after April 1, 1998. As stated earlier in the absence of any finding recorded by the Assessing Officer to the effect that in spite of the fact that the tax audit report shows that the goodwill was acquired prior to April 1, 1998, in the facts of the present case the goodwill must be held to be acquired after April 1, 1998, it is difficult to hold that a conscious decision was taken in the matter by the Assessing Officer. In our opinion mutual inconsistencies in the tax audit report and the return of income which were not noticed by the Assessing Officer at the time of assessment u/s 143(3) of the Act is sufficient reason to reopen the assessment. Thus, reopening of the assessment proceedings for the assessment year 1999-2000 initiated by the Assessing Officer cannot be faulted. Accordingly, the petition fails.
|