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2016 (8) TMI 360 - AT - Income TaxReopening of assessment - reasons to believe - excessive claim of the assessee - depreciation set-off - Held that:- The reasons recorded by the Assessing Officer clearly speak for the under assessment of tax hence, the conditions laid above stand fulfilled in so far as re-assessment proceedings are concerned. In the present case, on framing the assessment order of Maheswari Sugars Ltd. for the assessment year 2006-07 vide order dated 25.03.2008, it came to the knowledge of the Assessing Officer that the depreciation pertaining to the assessment years 2002-03 to 2004-05 amounting to ₹.6,98,05,670/- was already set off out of total brought forward loss amounting to ₹.23,73,98,026/- and the balance amount of ₹.16,10,19,160/- could be carried forward for set off against the assessee’s current income. As per Explanation 2 of Section 147 it is very clear that due to excessive claim of the assessee, the income chargeable to tax had escaped assessment. The assessee has not produced anything before the Commissioner of Income Tax (Appeals) to show as to how this fact was fully and truly disclosed before the assessing authority and that there was not failure on the part of assessee. Hence, the Commissioner of Income Tax (Appeals) wrongly cancelled the assessment order. It is fully covered by the provisions of Explanation 1 to Section 147 of the Income Tax Act It is possible that with due diligence the Assessing Officer would have ascertained this fat at the time of original assessment also, but in view of the Explanation (1) it does not mean that there was no default on the part of the assessee. Hence, reopening u/s.147 is held to be valid. - Decided against assessee.
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