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MANAN EXPORTS PVT LTD Versus INCOME TAX OFFICER

2017 (2) TMI 396 - GUJARAT HIGH COURT

Validity of reopening of assessment - information received from the DDIT (Investigation) - over invoicing of the goods - Held that:- From the material on record, it appears that it is not in dispute that on the basis of the information supplied /given by DRI who issued the show cause notice with respect to six consignments of the imported rough diamonds, more particularly, with respect to over invoicing of the goods original assessment was taken under scrutiny assessment. The Assessing Officer a .....

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sue, more particularly, with respect to the consignment of the imported six rough diamonds can be said to be mere change of opinion. - Considering the decision in the case of Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) merely on the basis of the change of opinion by the subsequent Assessing Officer / Assessing Officer reopening of the assessment is not permissible. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 21452 of 2016 - Dated:- 31-1-2017 - MR .....

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ing today. [3.0] By way of this petition under Article 226 of the Constitution of India the petitioner - assessee has prayed for an appropriate writ, order or direction to quash and set aside the impugned notice dated 30/03/2016 issued by the respondent - Assessing Officer by which the Assessing Officer has sought to reopen the assessment for the Assessment Year 2009-10 in exercise of powers under Section 148 of the Income Tax Act (hereinafter referred to as the Act ) on the ground that the inco .....

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t to the transactions of rough diamonds alleged to have been purchased by the petitioner - assessee. After detailed scrutiny, Assessing Officer framed the scrutiny assessment under Section 143(3) of the Act on 23/12/2011 and considering the material on record there was no addition made by the Assessing Officer. Thereafter, the Assessing Officer has issued the impugned notice beyond the period of four years from the date of assessment and has sought to reopen the assessment for the Assessment Yea .....

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cessed under Section 143(1) of the Act on 30/10/2010. Thereafter, scrutiny assessment was completed on 23/12/2011 determining the assessed income at ₹ 23,26,430/-. 2. Subsequently, information has been received from the office of the Deputy Director of Income-tax (Investigation), Unit-I, Surat vide confidential letter No.SRT/DDIT (Inv.)/Inquiry/2015-16 dated 24/07/2015. As per the information, the Directorate of Revenue Intelligence (DRI) on 27/11/2008 had confiscated six consignment of im .....

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nsignment of diamonds in is US$ 21750437. However, subsequently, the assessee Company had amended the declared value of the six consignments of rough diamond at US$ 83512.60 only. Thus, it is clear evident on record of over invoicing the purchase value of the imported goods with a view to siphon off huge foreign exchange to park money abroad for unlawful activities. 3. The over invoicing of purchase value of the goods, in the instant case comes to in US$ 21666925 (21750437 - 83512.60) value in I .....

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, were not covered during the original assessment proceedings. By hiding the issue of seizure of the six consignment of imported rough diamonds by the DRI, the assessee has not furnished truly and fully all the material requirement before the AO during the original assessment proceedings. 5. In view of the above facts, I have reason to believe that the income to the extent of ₹ 107,35,96,133/- has escaped assessment within the meaning of Section 147 of the Act in the case of the assessee. .....

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facts and secondly the reopening is based on change of opinion by the subsequent Assessing Officer. The objections raised by the petitioner - assessee has been disposed of by the Assessing Officer vide communication dated 10/11/2016 by which the Assessing Officer has not agreed with the objections raised by the petitioner - assessee. Hence, the petitioner has preferred the present Special Civil Application under Article 226 of the Constitution of India challenging the impugned notice under Secti .....

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as such the conditions to reopen the assessment beyond four years as mentioned /provided in Section 147 of the Act has not been satisfied. It is submitted that as such there was no failure on the part of the petitioner - assessee in not disclosing true and correct facts. It is submitted that the assumption of jurisdiction by the Assessing Officer to reopen the assessment beyond four years is bad in law and contrary to the provisions of Section 147 of the Act. It is further submitted that even o .....

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er framed the scrutiny assessment under Section 143(3) of the Act. It is submitted that therefore the subsequent reassessment on the basis of the same material is nothing but change of opinion, and therefore, the reassessment proceedings is not permissible. In support of his above submissions, he has heavily relied upon the decision of the Hon ble Supreme Court in the case of Commissioner of Income-tax Vs. Kelvinator of India Ltd. reported in [2010] 320 ITR 561 SC. He has also relied upon the de .....

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ce of show cause notice by the DRI, which the Assessing Officer came to know on the basis of the information supplied by the DRI. It is submitted that therefore it can be said that there was failure on the part of the petitioner - assessee in not disclosing true and correct facts. It is submitted that therefore the conditions precedent for invoking the jurisdiction under Section 147 of the Act has been satisfied. It is submitted that therefore the impugned notice under Section 148 of the Act can .....

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ied in issuing the impugned notice and reopening the assessment for the Assessment Year 2009- 10. Making the above submissions, it is requested to dismiss the present petition. [7.0] Heard the learned advocates appearing on behalf of the respective parties at length. At the outset, it is required to be noted that by the impugned notice the Assessing Officer has sought to reopen the assessment for the Assessment Year 2009-10, and therefore, unless and until the condition precedent as mentioned in .....

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ion received from the DDIT (Investigation) Unit I, Surat, show cause notice has been issued by the DRI with respect to six consignments of imported rough diamonds, which was alleged to have been purchased by the petitioner - assessee and according to DRI there was over invoicing of the purchase goods. According to the Assessing Officer, so mentioned in the reasons recorded, the petitioner - assessee while filing the return of income did not disclose the show cause notice issued by the DRI with r .....

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