9911796707
TMI Blog2016 (2) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... ne appeared on behalf of the Respondent and arguments were made by Shri Nitin Waghmode, Departmental Representative (DR) on behalf of the Revenue. 3. In this appeal, the Revenue is aggrieved with action of Ld. CIT(A) in quashing reopening of the assessment of the assessee u/s 147 of the Act. During the course of hearing, none appeared on behalf of the assessee. An adournment application was received dated 13th January 2016, but the same was rejected as it was noted from the perusal of the order sheet entries that none has appeared earlier also on various occassions. Ld. DR has relied upon the order of the AO. 3.1. We have gone through the orders of the lower authorities. The brief background is that in this case original assessment was do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt. Losses due to such exchange variation are being claimed as revenue expenditure invariably by al l the assessee and therefore, such exchange gains are also required to be of fered for taxation. Omission to offer the exchange gain had result ed in excess quantification of loss to the extent of Rs. 1,35,44,600/. 4. Thus, I have a reason to believe that the assessee had not made a full and true disclosure in the return of income. As such I have reason to believe that the income of Rs. 1 35.44,600/ - chargeable to tax under the pro visions of the I.T. Act, 1961 had e s caped assessment for AY 2004-05." 3.2. During the course of assessment proceedings, the assessee submitted that the reopening was invalid, as the complete facts were s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s. 148 of the Act was taken from the record, as the A.O. himself took note from Form 3CD report, which was based on audit objection and hence the appellant agitated to this effect. Based on this submission itself, the appellant's AR requested to annul the Assessment Order. To ascertain the appellant contention, a letter dated 22/06/2012 was given to subsequent to that the A.O. through letter dated 26/06/2012 of Addl.CIT- 3(1) submitted its report. The relevant portion of the same is extracted as under. "2. On verification of the records, it is seen that the assessment in this case was reopened u/s 147 r. w. s.148 subsequent to the Audit objection raised by the revenue audit. 3. It is pertinent to mention that the reopening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly depicts in the return of income. Hence in this case recognizing notional income was not correct and justified, as to this effect the appellant has taken note of AS-11. Further to that, I also find that the said fact was also recorded in the audit report in para-4(iv) of the report, which is as under:- account dealt with by this report comply with the accounting Standards referred to in sub section (3C) of section 211 of the companies Act, 1956. Excepting that the payable includes a sum of Rs. 1,35,44,600/- arising on account of exchange fluctuations translated in terms of Indian Rupees as on 31/03/04, as there will only notional gain. This is not in accordance with AS-11(7). In view of all these facts, I am not in agreement with the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was done u/s 143(3), unless, any income chargeable to tax escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The perusal of the 'Reasons' recorded by the AO reveals that there is no allegation of any failure on the part of the assessee in disclosure of material facts. Rather the case is reverse. Apparently, there was full discloser on the part of the assessee in accounts filed with the return of income. The AO recorded the 'Reasons' on the basis of information disclosed by the assessee in his return, accounts and audit report. Thus, the reopening is clearly barred by limitation and beyond the provisions of law in view of aforesaid proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
