TMI Blog2000 (2) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... Powai. He developed a new product of high value for production of organic manure, which was a research-based product. It was based on agro-waste material like gobar, etc. The BIU was started in 1993. It was a proprietary concern. For the relevant assessment year 1994-95, the petitioner filed his return of income on October 27, 1994, declaring a total income of Rs. 6.74 lakhs. Vide intimation under section 143(1)(a), the return came to be accepted after making a small adjustment. However, the case of the petitioner for the said assessment year was taken up for scrutiny. Finally, vide order dated May 20, 1996, after examining the claim for deduction under section 80-IA, an assessment order was passed. By the said order, the claim for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent matter, the claim for deduction under section 80-IA was rejected by the Assessing Officer for the assessment year 199596. Against the said order, the matter was carried in appeal in which the appellate authority has gone into the entire gamut of the survey and the appellate authority concluded that looking to the nature of the activity of the assessee, there was no necessity of having a factory, plant and machinery, workers, etc. Mr. Dastur further pointed out that the BIU had sold its products to Good Value Agro Products Limited for Rs. 24 crores under an agreement dated June 23, 1993, which fact was also considered by the appellate authority. Mr. Dastur, further contended that the petitioner was on the board of directors of Good Val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under section 80-IA came to be granted. On October 23, 1997, survey under section 131 of the Act was carried out. For the assessment year 1995-96, the claim for deduction under section 80-IA came to be rejected vide order dated March 9, 1998, passed by the Assessing Officer under section 143(3). Being aggrieved by the said order, the assessee preferred an appeal on April 13, 1998, to the Commissioner of Income-tax (Appeals). By judgment and order dated March 31, 1999, the appellate authority allowed the appeal. However, it is interesting to note that the reasons recorded for reopening the assessment for the assessment year 1994-95 are dated March 11, 1998. These reasons clearly indicate a large number of facts which have been brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Jamna Lal Kabra v. ITO [1968] 69 ITR 461, the Allahabad High Court has held that reasons for reopening the assessment are of significance because they indicate the grounds which the officer had in mind for believing that the income had escaped assessment and it is not open to the officer to refer to reasons other than those recorded by him pursuant to section 148(2). We do not see any dispute regarding the legal position. It is essentially a matter of application of law to the facts of a given case. In the present case, the reasons clearly indicate that there was material on basis of the survey and statements of persons to show that the assessee had wrongfully claimed deduction under section 80-IA. To the same effect is the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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