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2007 (2) TMI 192 - HC - Income TaxReopening of the assessment beyond four years - Validity of notice issued u/s 148 - Modvat credit - Valuation of the closing stock - HELD THAT:- The valuation of opening stock read with section 145A, the Assessing Officer in his order had denied the benefit of increase in value of opening stock which was further carried in appeal up to the Tribunal stage where the stand of the Department had been accepted. The additions made during the assessment proceedings had been upheld by the Tribunal. Thus, there could not be any failure on part of the petitioner resulting in escapement of income. As per the new provisions of section 145A of the Income-tax Act, 1961, the unutilised Modvat credit had to be included in the closing stock of raw material and work in progress, whereas the excise duty paid on unsold finished goods had to be included in the inventory of finished goods. Therefore, the decision of the CIT (A) and the subsequent decision of the Tribunal reversing the decision of the CIT (A) were only related to unutilised Modvat credit. Thus, we fail to see any ground for reopening of the assessment for the assessment year 1999-2000 since the petitioner had very meticulously specified all the disclosures that were made in that assessment year. The reasons given by the Department for reopening the assessment u/s 148 of the Act do not disclose any failure on the part of the assessee to disclose fully and truly all material facts. Hence we hold in favour of the petitioner on this ground. Moreover the respondents had once held the notes in the balance-sheet of the petitioner to be a full and true disclosure but subsequently chose to alter their view. Hence we hold in favour of the petitioner on this ground.
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