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2013 (3) TMI 536 - HC - Income TaxReopening of assessment - as per AO there was a short term capital gain of Rs. 2.80 crores which was not offered to tax as a result of which there was an under assessment of income by Rs. 2.80 crores - Held that:- The computation of income that was filed by the assessee together with the return of income stated that the assessee had purchased 10 lakh shares of DFPCL on 9 December 1994 at a cost of Rs. 2.86 crores. The assessee claimed that it sold the shares on 10 May 2004. It was on this basis that the assessee claimed the benefit of indexation. What the assessee failed to disclose in the computation was the fact that the payment of Rs. 2.57 crores for the shares was in fact made on 30 January 2004. This was a fact which ought to have been disclosed to the AO, but which was not disclosed even in the further letter of the assessee dated 24 September 2007. In that letter, the assessee disclosed the initial payment of Rs. 28.65 lakhs on 9 December 1994, but carefully avoided disclosure of the fact that the payment of Rs. 2.57 crores was made only on 30 January 2004. Finally, it was on 30 January 2004 that the assessee addressed a communication to the Assessing Officer containing as many as fourteen annexures. One of them was a share certificate of DFPCL. That share certificate contained an endorsement to the effect that the assessee has paid the final call on 30 January 2004. Explanation (1) to Section 147 provides that the production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer would not amount to a disclosure within the meaning of the proviso. The nature of the disclosure has to be assessed in the facts and circumstances of each individual case. In the present case, there was a failure on the part of the assessee to make a disclosure that was candid, frank and true of the fact that it was only on 30 January 2004 that the assessee had made a payment of Rs. 2.57 crores for the acquisition of the shares of DFPCL. In these circumstances it cannot be said that the invocation of the jurisdiction to reopen the assessment beyond the period of four years did not fulfill the jurisdictional requirement. AO acted within jurisdiction since the record would indicate that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year - against assessee.
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