TMI Blog2012 (4) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression of material facts by the assessee. Therefore, in absence of failure on the part of the assessee to disclose fully and truly all material facts, notice issued u/s 148 is quashed – Decided in favor of assessee. - WRIT PETITION NO.2467 OF 2011 - - - Dated:- 27-3-2012 - DR.D.Y.CHANDRACHUD M.S. SANKLECHA, JJ. Mr. Soli E. Dastur, Senior Advocate with Mr. B.V. Jhaveri for the Petitioner. Mr. Vimal Gupta for the Respondents. ORAL JUDGMENT : 1. Rule, made returnable forthwith. Counsel appearing on behalf of the Respondents waive service. With the consent of counsel and at their request, the Petition is taken up for hearing and final disposal. 2. The challenge in these proceedings is to a notice issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 21.72 Crores in addition to an allowance of capital expenditure to the tune of ₹ 19.91 Crores. According to the Assessing Officer the assessee was not entitled to claim both capital expenditure as application of income and also a depreciation on capital assets which would tantamount to a double deduction. 4. As regards the second ground for reopening, the attention of the Court has been drawn to the fact that the assessment of the assessee for Assessment Year 200304 was sought to be reopened under Section 148 by a notice dated 24 March 2010. The same ground for reopening the assessment for Assessment Year 2003-04 was set out. A Division Bench of this Court, by its judgment dated 19 April 2011 allowed the writ petition filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt was ₹ 100.27 Crores. The income and expenditure account clearly reflects a provision for doubtful accounts in the sum of ₹ 1.60 Crores. Therefore, ex facie, it is evident that there was no suppression of material facts by the assessee. The reasons for reopening in fact indicate that according to the Assessing Officer, the details of the amount applied for carrying out objects under Section 11(1)(a) shows that this amount includes a provision for doubtful accounts amounting to ₹ 1.60 Crores. That being the position, it is impossible to even postulate that there was a failure on the part of the assessee to fully and truly disclose material facts necessary for the assessment for that Assessment Year. In the reply which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason to believe that there was an escapement of income. However, since the reopening has taken place beyond a period of four years of the end of the relevant Assessment Year, it is necessary for the Assessing Officer to establish that there was a failure on the part of the assessee to disclose fully and truly all material facts. This ought to have been established as part of the reasons which are disclosed to the assessee. In Hindustan Lever Limited v. R.B. Wadkar, Assistant Commissioner of Income Tax (2004) 268 ITR 332., a Division Bench of this Court has held as follows : Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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