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2016 (6) TMI 491 - GUJARAT HIGH COURT

2016 (6) TMI 491 - GUJARAT HIGH COURT - TMI - Reopening of assessment - over invoicing of the purchase - Held that:- Order of assessment dated 30.12.2010 did not make any disallowance or addition on over invoicing of the purchase. Thus, the Assessing Officer, ofcourse without citing reasons, accepted the explanation of the assessee regarding the sale and purchase of goods in question.

With this background, if we revert back to reasons recorded. It is this very issue which the Assessin .....

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, thus, clearly based on change of opinion, which would simply not be permissible. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 1194 of 2016 - Dated:- 8-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR TUSHAR P HEMANI, ADVOCATE, MS VAIBHAVI K PARIKH, ADVOCATE FOR THE RESPONDENT : MRS MAUNA M BHATT, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner has challenged notice dated 11.03.2015 by which, the respondent-Assessing .....

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2008 purchase/sales bills were found. The hard disc of back up was found and impounded. The statement of Shri Sitaram Sharma Vice President of the company was recorded. 3. The assessment was completed u/s 143(3) r.w.s. 147 on 30/12/2010 assessing the total income at ₹ 13,28,190/-. 4. It is seen from the record that the assessee has purchased goods worth ₹ 80,51,932/- from M/s. Cedar Décor P. Ltd., a sister concern of the assessee. At the same time it is seen that M/s. Cedar D& .....

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circumstances, the over invoicing made by the assessee ₹ 31,49,963/- meet the criteria for disallowance u/s. 40A(2)(b) of the Act. 6. In view of above facts, I have reason to believe that income chargeable to tax to the extent of ₹ 31,49,963/- has escaped assessment for A Y 2008-09 by reason of the failure on the part of the assessee to furnish the correct particulars of facts necessary for assessment. Since more than 4 years have elapsed from the end of the relevant assessment year .....

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sued beyond the period of four years or the end of the relevant assessment year. In this context, the requirement that the income chargeable to tax has escaped assessment due to the reason of failure on part of the assessee to disclose truly and fully all materials facts would become relevant. The reasons recorded nowhere suggest that there was any failure on part of the assessee to disclose material facts. In fact, in the reasons, the Assessing Officer has mentioned that It is seen from the rec .....

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claims of the petitioner, one of them being the purchase of goods at ₹ 80.51 lacs (rounded off) from a sister concern which were purchased by the said concern at a cost of ₹ 49.01 lacs. In this context, the Assessing Officer called for an explanation why the over invoicing of the purchase to the extent of ₹ 31.49 lacs should not be taxed in the hands of the assessee. The Assessing Officer under letter dated 15.12.2010, therefore, raised following query in this respect: For fin .....

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il 2007 to 31 March 2008 showed that Cedar Décor has purchased goods worth ₹ 49,01,969/- from Durian Industries Ltd. and the same has been sold to Home Depot for ₹ 80,51,932/- immediately. This has resulted in over-invoicing of purchases in Home Depot by the similar amount and thereby understatement profit. Please Explain why this over invoicing of Purchase of ₹ 31,49,963/- should not be taxed in assessment of Home Depot India Pvt. Ltd. for 2008-09. Please also provide t .....

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M/s. Cedar Decor Pvt. Ltd. is an Indian company, duly registered in India and assessed to Indian Income Tax Act. The allegation of the department is that M/s. Cedar Decor Pvt Ltd. has sold the goods worth ₹ 49,01,969/- purchased from M/s. Durian Industries Ltd. to M/s. Home Deport Pvt. Ltd. for ₹ 80,51,932/-. Your showcause suggest that the profit of ₹ 31,49,963/- earned by M/s. Cedar Decor Pvt. Ltd. should be taxed in the hands of purchases. I tis quite evident that both the c .....

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