TMI Blog2013 (3) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003-04 only and not in financial year 2004-0. The profit on sale was shown under the head “other income and adjustment profit on unfixed deal”. The AO treated this as cash credit u/s 68 of the IT Act. Therefore the AO has valid reason to believe that income has escaped assessment because the assessee’s failure to disclose the material facts necessary for assessment for the relevant assessment year. - Decided in favor of revenue. - I.T.A No. 296/(Kol) of 2011 - - - Dated:- 20-1-2012 - Sri N.Vijayakumaran Sri C. D. Rao, JJ. For the Appellant: Shri A.K.Tibrewal For the Respondent: Shri Niraj Kumar ORDER. Per Shri N.Vijayakumaran, JM This appeal filed by the assessee company for Assessment year 2005-06 is directed against the order of ld. C.I.T.(A)-Central-I, Kolkata dated 27.01.2011. 2. The assessee has raised the following grounds of appeal :- 1) That on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals) erred in holding that the reassessment proceedings were validly initiated by the Assessing Officer in this case. 2) That the learned Commissioner of Income Tax (Appeals) erred in holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of six grounds 1 to 3 relate to validity of reopening. The attack by the assessee on the validity of reopening are all four sides. 3.3. Firstly there is no fresh material. We have considered the rival submissions and perused the material including the precedents relied. 3.4. Admittedly the assessment was reopened within 4 years. The first proviso to section 147 clearly prohibits the AO to act under this section after the expiry of four years from the end of the relevant assessment year. The decision of the Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) LTd. (2007) 291 ITR 500 (SC) supports the action of the AO on this re-assessment. Hence this objection of the assessee is contrary to the decision of the Hon ble Apex Court. Hence we reject the objection of the assessee. Further the decision of Hon ble Gujarat High Court in the case of Praful Chunilal Patel and another vs ACIT 236 ITR 832 (Guj) supports the revenue. 3.5. The second objection is that there is no addition ultimately sustained and once there is no addition on the very reasons for reopening the AO cannot assess or reassess the income in respect of any issue which has escaped assessment an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A). It is the suppression of sales of 25 kg of gold whereas the AO has treated the same gold as bogus purchase. 5. The second objection taken by the ld. Counsel for the assessee will not be sustainable in the eye of law as there is no occasion for the assessee to say that the reasons recorded and the purpose for which the assessment were reopened on that reason there is no addition. In other words the ld. DR submitted that it is the same 25 kg of gold that was taken to make the addition by the AO as well as by the ld. CIT(A). Therefore the ld. DR submitted that the reassessment is valid hence the appeal of the assessee is to be dismissed. 6. We have considered the rival submissions and perused the materials available on record including the precedents. Admittedly this reopening was done within 4 years. It is the only prohibition applicable if the action of reopening is admitted u/s 147 after expiry of four years from the end of the relevant assessment year. The AO has found on perusal of the assessment records that there was a case which makes the AO to have a reason to believe that the assessee has inflated the total purchase value of the gold. On this reason the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn. 6.2. Coming to the change of opinion again we reiterate that mere production of evidences before the AO is not sufficient. There may be omission or failure to make a true and full disclosure if some material for the assessment lay embedded in the evidences which the assessee could not have incorporated but it is the duty of the assessee to bring out to the notice of the AO. It is the assessee to know all the materials and relevant facts but the AO may not. In respect of the failure to disclose the omission may be deliberate or inadvertent. That is immaterial but if there is omission to disclose the material facts then subject to the other additions judiciously to reopen is attracted. When the transactions itself on the basis of subsequent information is found to be bogus transaction mere disclosure of the transaction at the time of original assessment cannot be said to be a disclosure of the true and full facts in this case and the AO would have judiciously to reopen the concluded assessment in such a case. This is fortified by the decision of the Hon ble Supreme Court in the case of Phoolchand Bajrang Lal vs ITO (1993) 203 ITR 456 (SC). Therefore in this case the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year 2003-04 as stated by the assessee. The assessee computed the income out of the sale of alleged gold bar in the financial year 2004-05 and credited under the head other income and adjustment profit on unfix deal is the observation of the ld. AO. To add more the assessee could not produce J.J.Gold House for verification and confirmation of the alleged purchase made during the financial year 2004-05 to establish the claim. Only in the reassessment the assessee company claimed the alleged purchases in the financial year 2004-05. However, the asessee could not discharge the burden particularly with the audit reports for the financial year 2003-04 and 2004-05 which do not support the assessee s contention. Even taking it that the purchases were taken to be genuine according to AO why these purchases cannot be shown in the financial year 2004-05 and the statement has to be relied. The gold was received in the financial year 2003-04 and the relevant purchase has to be entered in the financial year 2003-04 only and not in financial year 2004-0. The profit on sale was shown under the head other income and adjustment profit on unfixed deal . The AO treated this as cash credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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