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2014 (12) TMI 725 - HC - Income TaxValidity of notice for reopening of assessment u/s 148 - Failure on the part of the assessee to disclose fully and truly all material facts or not – Held that:- Assessee did not have any opening stock on 01.04.2005 - By virtue of a Business Transfer Agreement, the assessee received a stock valued at ₹ 19,90,92,944/- from Hindustan Motors Ltd. which became its initial stock - there were additions to the stock and the difference between the initial stock and the closing stock at the end of the year, that is, on 31.03.2006, came to ₹ 5,76,42,819 - there has been no failure on the part of the assessee to make a full and true disclosure of the material facts pertaining to the closing stock and that the allegation raised by the respondents is not borne out by the records. The initial view of the AO also coincided with the view taken by the assessee but because there was some circular which had been issued by the CIT, even though the AO disagreed with the audit objection, he had to take “remedial” steps u/s 148 - this also discloses the fact that the AO had not applied his own mind but was dictated to by the circular which he felt he was bound to follow - The provision for reopening of assessment u/s 147 specifically requires that it is the AO who must have reason to believe that income chargeable to tax has escaped assessment - The belief must be of the AO himself and not of anybody else – in the present case, although the AO believed that no income had escaped assessment and he had disagreed with the audit objection yet he went on to issue the notice u/s 148 which cannot be sustained in law – thus, the notice for reopening if set aside – Decided in favour of assessee.
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