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2011 (10) TMI 485 - AT - Income TaxValidity of reopening of assessment previously framed u/s 143(3) after a period of four years from the end of the relevant A.Y. - proceedings initiated on ground that assessee had claimed double deduction in respect of excise duty relatable to closing stock - AY 2001-02 - Held that:- There is no dispute that detailed notes were submitted before the AO. In the reasons recorded, AO has not pointed out as to which particular fact was not disclosed by assessee, which was necessary for arriving at the alleged conclusion of double deduction being claimed by the assessee. The mandate of proviso is very clear that unless there is a failure on the part of assessee to disclose fully and truly all necessary facts for assessments, re-opening cannot be upheld - Decided in favor of assessee. Validity of reopening of assessment of AY 02-03 and 03-04 on aforesaid ground - assessment proceedings initiated within four years from the end of relevant AY - assessee contended change of opinion - Held that:- AO after examining the details furnished before it arrived at a conclusion that Assessee had rightly claimed the deduction but he did not take into consideration as to what was the effect of claiming deduction once on mercantile basis of accounting and again u/s 43B in the computation. The true effect of double deduction, in the same year, of excise duty paid by assessee, was an important issue, on which AO should have applied his mind and then come to a conclusion. Non-application of mind on such a vital aspect cannot be considered as formation of opinion on the basis of details available before him. Therefore, re-assessment proceedings for AY s 2002-03 and 2003-04, were not initiated on account of change of opinion - Decided against the assessee. Since the assessee was following mercantile system of accounting. It had debited the excise duty on manufacture of goods and correspondingly included excise duty element in the closing stock to neutralize the effect of debit in the P/L A/c. The deduction had been claimed on the basis of actual payment u/s 43B. However, the assessee had made necessary adjustments in the respective years. It is clear that in ultimate analysis of various assessment years taken together, no double deduction had been claimed by the assessee. CIT (Appeals) rightly assailed levy of interest u/s 234D observing that since provisions of section 234D have come into force from 1.6.2003, therefore, this will be applicable from AY 2004-05 onward
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