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2014 (4) TMI 423 - AT - Income TaxValidity of reopening of assessment u/s 148 of the Act – assessment year 2002-03 and 2003-04 - Duty to make full disclosure - The decision in Bhor Industries Ltd. vs. ACIT [2003 (2) TMI 8 - BOMBAY High Court] and Cadila Healthcare Ltd. vs. DCIT [2010 (5) TMI 570 - Gujarat High Court] followed - The duty of the assessee is only to make full and true disclosure of all material facts necessary for the assessment - the act does not required that the assessee should inform the AO as to what legal inference should be drawn from the facts disclosed by him - The assessee cannot gave advise to the AO on question of law – the AO has completely failed to ascribe any failure on the part of the assessee to disclose fully and truly material facts - such “reason” recorded do not clothe him to acquire jurisdiction u/s 147 – thus, the order passed u/s 148 is set aside – Decided in favour of Assessee. Validity of reopening of assessment u/s 148 of the Act - assessment year 2004-05 - Held that:- The assessee company has been allowed deduction u/s10A in respect of three units of IT Division by the AO – Section 10A of the Income Tax Act, 1961 provides deduction of such profits & gains as are derived from the eligible activities performed by an undertaking - the deduction allowed u/s 10A, does not form part of the total income, the loss in respect of Section 10A undertaking should also be ignored while computing total income – section 10A income is exempt from tax, the loss should also have been ignored, which has not been done - this has resulted in underassessment of income – thus, there is reason to believe that income to the extent of Rs,5,62,75,564/- has escaped assessment and it is a fit case for reopening u/s 147 of the Act – the materials, prima-facie, are sufficient to acquire jurisdiction u/s 147, because they give rise to “reason to believe” that the prima-facie assessee’s claim for exemption has not been examined properly in the course of the assessment proceedings – Decided against Assessee. Disallowance of claim of deduction u/s 10A of the Act – Registration not taken for new industrial undertaking – Held that:- Both the parties had admitted that the matter has to be remitted back to the AO for fresh adjudication – decided in favour of Assessee.
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