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JIVRAJ TEA COMPANY Versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-6

2017 (2) TMI 121 - GUJARAT HIGH COURT

Reopening of assessment - purchases made from the sister concerns - Held that:- In both the cases assessment for AY 2005-2006 is sought to be reopened on the grounds reproduced hereinabove. However, it is required to be noted that the issue/question with respect to the purchases made from the sister concerns and the price paid to these sister concerns were as such gone into in detail by the Assessing Officer during the course of scrutiny assessment proceedings. Specific queries were asked by the .....

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n by the subsequent Assessing Officer. As held by the Hon'ble Supreme Court in the case of Commissioner of Income-tax v. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA ] on the mere change of opinion by the subsequent Assessing Officer, reopening of assessment is not permissible. - As observed hereinabove, the issue with respect to the purchases made from the sister concerns and the price paid to the sister concern was in fact gone into in detail by the Assessing Offic .....

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J SHAH, ADVOCATE FOR THE RESPONDETN : Mr SUDHIR M MEHTA, ADVOCATE COMMON JUDGMENT (PER : HONOURABLE Mr. JUSTICE M.R. SHAH) 1. As common question of law and facts arise, both these petitions are decided and disposed of by this common judgment and order. 2. Special Civil Application No. 15991 of 2010 has been preferred by the petitioner/assessee-Messrs. Jivraj Tea Limited for issuance of writ or order quashing and setting aside the impugned Notice under Section 148 of the Income-tax Act, 1961 [ th .....

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Jivraj Tea Limited. 4. For the sake of convenience, the facts of Special Civil Application No. 15991 of 2010 are narrated. 4.1 The petitioner/assessee-Messrs. Jivraj Tea Limited filed return of income for A.Y 2005-2006 by declaring Nil the total income because of 80G deductions and 80IA deductions and Section 115JB book profit of ₹ 2,66,60,078/=. That, alongwith the return of income, the assessee produced audit report in Form No. 3CD. That thereafter, the petitioner-assessee was served wit .....

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under Section 143 [3] of the Act. That thereafter, the petitioner has been served with the impugned Notice under Section 148 of the Act within the period of four years alleging inter alia that the income chargeable to tax has escaped the assessment. That, on the request of the assessee, the petitioner has been supplied the reasons recorded to reopen the assessment which read as under :- On verification of the case records for the A.Y 2005-06, it revealed that the assessee had purchased tea from .....

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orpn.]. Hence, the assessee had paid excess payment to related parties amounting to ₹ 3,30,46,636/= under Section 40A[2a] of the I.T Act. In view of the above, I have reason to believe that in the case of assessee Company M/s. Jivraj Tea Limited, income has escaped assessment to the extent of ₹ 3,30,46,636/= for A.Y 2005-06 . 4.2 That, the concerned assessee raised objections against the reasons to reopen the assessment submitted that the question with respect to the transactions wit .....

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15991 of 2010. 4.3 A similar notice under Section 148 of the Act for reopening of the assessment has been issued in the case of another assessee viz., Messrs. Jivraj Tea Company, wherein, the assessment for AY 2005-2006 is sought to be reopened on the very ground, which is subject matter of Special Civil Application No. 14456 of 2010. 5. Shri Manish J Shah, learned advocate appearing on behalf of the petitioners has vehemently submitted that the impugned Notices are bad in law and contrary to t .....

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rnished all the necessary materials/information asked by the Assessing Officer and also justified the purchase price paid to the concerned sister concerns. It is submitted that only thereafter, the Assessing Officer framed scrutiny assessment. It is submitted that therefore, when the issue with respect to transactions with the sister concerns and also with respect to the purchase price paid to the sister concerns was also gone into in detail by the Assessing Officer, while framing the scrutiny a .....

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he Revenue. It is submitted that in the present cases, the assessment for AY 2005-2006 is sought to be reopened within the period of four years. It is submitted that as the Assessing Officer formed an opinion that the income chargeable to tax has escaped assessment, as the assessee paid higher sum of purchase price to the sister concerns, and thereafter when the Assessing Officer has reopened the assessment, the same are not required to be interfered by this Court under Article 226 of the Consti .....

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