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TMI Blog2018 (6) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect in having interfered with the re-assessment proceedings initiated under Section 147 on the ground that there was absence of full and true disclosure of material facts, as is necessary when such re-assessment proceedings are taken up after four years; mandated by the statutory prescription as available in Section 147?" 2. The assessee is a company having plantations of its own and also carries on trade in tea and coffee. The assessee deals in tea grown in their plantations as also tea purchased from outside sources. For the assessment year 1994-95, assessment was completed by Annexure-A order on 31.03.1997. The loss from Packet Tea Division (PTD) as found in the original assessment order was at Rs. 1,86,29,034/-; which was allowed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income too is to be apportioned as provided under Rule 8 of the Income Tax Rules. The apportionment having not been made in the returns, this would lead to non-disclosure of full and true material facts which would enable re-assessment under Section 147, even after the 4 year period is the compelling argument of the revenue. 5. The learned Senior Counsel would challenge the finding of the Tribunal that there was a consideration by the Assessing Officer in Annexure A1 as to the loss from PTD, pointing out the mere computation carried out in Annexure A1. This does not lead to a presumption that the matter was considered elaborately by the Assessing Officer; is the argument. The learned Senior Counsel relies on [1967] 66 ITR 714 [Killick Nix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an inference which could have been drawn by the Assessing Officer from the materials available. This is so especially since the said rule was applied in apportioning the income and it was very evident that the loss occasioned in the PTD was with respect to sale of tea grown in the assessee's own plantations and that procured from third parties. There cannot be a re-assessment proceedings initiated after four years on the ground of non-disclosure of full and true material facts especially since the Assessing Officer does not refer to any new facts detected; leading to reassessment. The only ground is that the assessee did not apportion the loss; as was done in the case of income under Rule 8 in the returns, which is not possible of be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue of apportionment of loss in proportion to the apportionment made of income under the Agricultural Income Tax Act and Income Tax Act. 9. Killick Nixon and Co. was a case in which the Appellate Assistant Commissioner estimated the value of three assets, which was affirmed by the Tribunal. The specific contention of the assessee before the Tribunal was that there was evidence on record showing that the market value exceeded the estimated value. The mere affirmation made by the Tribunal and the conclusion recorded could not be deemed to have been on a proper consideration of the evidence, was the finding. 10. Malegaon Electricity Co. P. Ltd. was a case in which though sale of assets and consideration received were shown in the return, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport the Revenue's view. The judgment of this Court was one in which the judgment of the Hon'ble Supreme Court was relied on and there was found absence of full and true disclosure of material facts necessary for assessment. In Tata Ceramics Ltd., the assessee filed a return disclosing a total income just above Rs. 3lakhs, which included interest income, which according to the assessee, was not liable to tax. In the original assessment, the contention was rejected and the interest income was taxed. Later, it was found that the interest income itself came to more than Rs. 38lakhs, which was sought to be assessed to tax, as escapement of income, under Section 147. The four year period had elapsed and hence there was a contention rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Agricultural Income-tax Act. The sale carried out by the assessee from the PTD would obviously include the tea grown in its own plantations, the income from which was apportioned under Rule 8. The loss from the PTD as returned by the assessee without any further disclosure in the returns would take in the component of tea grown in its own plantations as also that purchased from outside sources. It is relevant that the Assessing Officer while allowing the loss from PTD failed to differentiate the loss with respect to that occasioned by the sale of tea grown in the assessee's own plantations and apportion it in the same manner, the income was apportioned under Rule 8. What is discernible is that the re-assessment was initiated n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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