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2016 (9) TMI 338 - HC - Income TaxReopening of assessment - discrepancy in the turnover - Held that:- AO was not agreeable to the objection of the audit party from the beginning and even during the process between issuance of notice for reopening and rejecting the objections of the petitioner, he had satisfied himself about the correctness of the petitioner's contention in this regard. We have reproduced the relevant portion of the petitioner's objections. The explanation of the petitioner in such objections to the discrepancy in the turnovers convinced the Assessing Officer that there had been no escapement of income chargeable to tax. He accepted the petitioner's ground that the excise turnover would show MRP price less 35% discount. If the turnover figures are adjusted accordingly, there would be hardly a discrepancy of 8% which in case of such a large turnover could easily occur. He in fact argued that if such discrepancy of 8.42% is extrapolated over the total turnover; the assessee's turnover from the eligible unit would match the correct figures. We have therefore no hesitation in coming to the conclusion that neither the reasons recorded by the Assessing Officer, nor the decision to issue notice for reopening were those of the Assessing Officer himself. He had acted under the compulsion of the audit party which held a belief that on account of discrepancy in the turnover figures, income chargeable to tax had escaped assessment. The Assessing Officer was inclined to believe the petitioner's explanation that such discrepancy could be reconciled. If the department was not convinced about the opinion of the Assessing Officer, it was always open for the Commissioner to take the order of assessment in revision. The action of reopening of assessment however, stands on entirely different footing and as per settled law, can be resorted to by the Assessing Officer only if he has tangible material at his command to form a reasonable belief that income chargeable to tax had escaped assessment. Such belief of the Assessing Officer cannot be substituted by that of the opinion of the audit party. - Decided in favour of assessee.
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