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2016 (6) TMI 984 - GUJARAT HIGH COURT

2016 (6) TMI 984 - GUJARAT HIGH COURT - TMI - Reopening of assessment - disallowance of provision for damaged goods - Held that:- The quoted portion of the Tribunal's impugned order would, however, establish that the entire issue was considered by the Assessing Officer in the original scrutiny assessment. The Tribunal records that the Assessing Officer had raised several queries in the notice issued to the assessee, in which, in query No. 16 he had sought details of liability for damaged goods o .....

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the year corresponding to the sales on estimation basis. - Thus, full accounts, details and justifications for the claim was placed before the Assessing Officer during the original assessment proceedings. This was in response to the written query raised by the Assessing Officer. If, thereafter, in the final order of assessment, the Assessing Officer made no disallowance, it can hardly be stated that he did not form any opinion with respect to this claim of the assessee. - Decided against re .....

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the appeal of the assessee by quashing reassessment u/s 147 of the Income Tax Act, 1961 after holding the re-opening as unsustainable? (b) Whether on the facts and circumstances of the case, the Hon'ble Tribunal has erred in law and on facts in not confirming disallowance of provision for damaged goods of ₹ 77,03,560/-? 2. Question No. 1 concerns the validity of the proceedings for re- opening of the assessment, notice for which was issued within a period of four years from the end of .....

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bunal, it reversed the decisions of the Revenue Authorities both on the ground of validity of the re-assessment as well as on merits of the disallowance. With respect to re-assessment, the Tribunal held and observed as under: 5.We have heard both the parties and perused the case file. It transpires from the paper book that the Assessing Officer in the course of regular assessment framed hereinabove had issued statutory notice u/s. 142(1) dated 02.074.2007 forming page 19 of the paper book. He ra .....

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in damaged condition in subsequent years out of those sold during the year is made in accounts of the year corresponding to its sales on estimation basis as determined by the management. It highlighted that any shortfall/excess liability is charged of/credited to accounts in the year of occurrence. There is not dispute about this factual position. 4. Learned counsel for the Revenue vehemently contended that the notice for re-opening having been issued within a period of four years from the end o .....

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in 243 ITR 482; (iii) In case of Gala Gymkhana (P.) Ltd. vs. Assistant Commissioner of Income Tax, Circle-4 reported in [2012] 27 taxmann. Com 294(Guj.). 5. The quoted portion of the Tribunal's impugned order would, however, establish that the entire issue was considered by the Assessing Officer in the original scrutiny assessment. The Tribunal records that the Assessing Officer had raised several queries in the notice issued to the assessee, in which, in query No. 16 he had sought details .....

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the year is made in the accounts of the year corresponding to the sales on estimation basis. 6. Thus, full accounts, details and justifications for the claim was placed before the Assessing Officer during the original assessment proceedings. This was in response to the written query raised by the Assessing Officer. If, thereafter, in the final order of assessment, the Assessing Officer made no disallowance, it can hardly be stated that he did not form any opinion with respect to this claim of t .....

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appeal, revision or even review if statute so permits but not liable to be re-opened by the same authority. Such powers are vested by the Legislature presumably in view of the highly complex nature of assessment proceedings involving large number of assessees concerning multiple questions of claims, deductions and exemptions, which assessments have to be completed in a time frame. To protect the interest of the revenue, therefore, such special provisions are made under section 147 of the Act. Ho .....

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the statute, certain safeguards are provided by the statute which are zealously guarded by the courts. Interpreting such statutory provisions courts upon courts have held that an assessment previously framed cannot be reopened on a mere change of opinion. It is stated that power to reopening cannot be equated with review. 42. Bearing in mind these conflicting interests, if we revert back to central issue in debate, it can hardly be disputed that once the Assessing Officer notices a certain claim .....

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which the assessee beyond trying to persuade the Assessing Officer, would have no control whatsoever. Therefore, while framing the assessment, allowing the claim fully or partially, in what manner the assessment order should be framed, is totally beyond the control of the assessee. If the Assessing Officer, therefore, after scrutinizing the claim minutely during the assessment proceedings, does not reject such a claim, but chooses not to give any reasons for such a course of action that he adop .....

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too much to expect him to carry. Irrespective of this, in a given case, if the Assessing Officer on his own for reasons best known to him, chooses not to assign reasons for not rejecting the claim of an assessee after thorough scrutiny, it can hardly be stated by the revenue that the Assessing Officer can not be seen to have formed any opinion on such a claim. Such a contention, in our opinion, would be devoid of merits. If a claim made by the assessee in the return is not rejected, it stands a .....

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