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2014 (2) TMI 1077 - HC - Income TaxReopening of Assessment u/s 147 of the Act - Held that:- The reason why the assessee did not credit the entire sale consideration to the Profit and Loss account was explained - Explanation whether valid in law is not important at this stage - What is important is that the reason for such reduced amount being credited to Profit and Loss account was eloquently and elaborately stated in the notes - In the return filed by the assessee itself, thus there was clear explanation why and on what basis the assessee adjusted the loss of MEK and Foods Division against the sale proceeds of Carbon Black unit before crediting remainder to the Profit and Loss account thus, there was no failure on part of the assessee to disclose truly and fully all material facts - There was no suggestion that the income chargeable to tax had escaped assessment for the failure of the assessee to disclose truly and fully all material facts - There was no hint in the reasons recorded by the Assessing Officer that there was failure on part of the petitioner in disclosing true and full facts Notice is liable to be set aside. Disallowance u/s 32A of the Act - Investment allowance Agreement to sell Held that:- The grounds relied upon by the Assessing Officer simply would not permit him to reopen the assessment that too after four years of end of relevant assessment year - The second ground itself is based on inaction on part of the Assessing Officer in the original assessment in not disallowing the investment allowance under section 32A(4) of the Act which was earlier granted to the assessee pertaining to its unit which was now sold - In the agreement parties decided to transfer the finished goods at market value - deviation from the agreement may either be by mutual consent, explicit or implied, or may even be in breach of terms of the agreement - when the admitted fact is that the assessee charged and received only the book value of its finished product, there was no reason for the Assessing Officer to tax the amount which the petitioner never received Decided in favour of Assessee.
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