9911796707
TMI Blog1995 (1) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ers including the petitioner who constituted this syndicate. According to the petitioner, the total profit came to Rs. 93,695 and the share of the assessee came to Rs. 18,737. The petitioner included the said amount of Rs. 18,737 in the total income. The Income-tax Officer did not accept the submission for the reason that there was no written agreement amongst the five dealers and the bills of purchase and sales were in the name of the petitioner-firm and that no separate accounts had been maintained by the petitioner-firm and that the accounts of the other co-sellers had not been separately maintained and that there was no separate capital account of the co-sellers. He, accordingly, added the entire amount to the income of the petitioner instead of one-fifth of the amount. The petitioner, against the said order of assessment dated March 27, 1987, passed by the Income-tax Officer, Circle (V), Ward 'B', Ahmedabad, preferred an appeal to the Deputy Commissioner of Income-tax (Appeals), ARV, Ahmedabad. It was submitted by the petitioner that a sum of Rs. 40,000 was deposited as tender standard money to the mills by the petitioner on behalf of the five members of the syndicate and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Marsdan Mills Monogram Mills Total ----------------------------------------------------------------- Rs. Rs. Rs. Sales 56,94,822 84,42,741 1,41,37,563 Purchase 47,46,076 70,71,640 1,18,17,716 ----------------------------------------------------------------- Profit 9,48,746 13,71,101 23,19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the proposed action. 5. Your reply in the matter should reach this office latest by March 28, 1988. Yours faithfully, (Sd.) (K. C. Thaker), Income-tax Officer, Circle (V), Ward 'B', Ahmedabad. " The petitioner replied to the above letter, vide communication dated March 28, 1988, wherein it was pointed out that the goods from which the syndicate of five members earned the profit of Rs. 93,695 were purchased in the name of the petitioner. The petitioner gave the entire details of the purchase and sales account of the said goods in the books of the petitioner. It was further pointed out that since the petitioner had purchased the goods along with many others, the charts seized were found at the place of the petitioner. It was also pointed out that the syndicate led by the petitioner earned only Rs. 93,695 and the other parties earned the profit shown against their names and that aspect was discussed by the assessing authority before passing the order under section 143(3) of the assessment year 1984-85. The petitioner says that the said reply was personally handed over to the Income-tax Officer on March 29, 1988, and, on the same day, the Income-tax Officer served upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice for reassessment merely on the change of hands because of change of the Income-tax Officer is wholly without jurisdiction and it is a settled position of law that the High Court in exercise of the powers under article 226 of the Constitution will have jurisdiction to interfere with the issuance of notice of such reassessment on changes of opinion being without jurisdiction. It is in this context that the present case has to be determined, prima facie, as to whether the impugned notice issued by the Income-tax Officer is passed on a mere change of opinion and as such the order passed is without jurisdiction or not. Though in the notice no reasons had been stated, however, the reasons are given in the memo dated March 18, 1988. Firstly, it is stated that in the year 1984-85, the petitioner-firm had entered into the transaction of purchase and sale of cloth manufactured by the Marsdan and Monogram Mills and in the process earned huge profit of Rs. 23,19,847, which has not been disclosed and as such escaped assessment. During the original assessment proceedings, an explanation as regards the goods purchased from Marsdan and Monogram Mills was submitted along with the relevant mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns with the Monogram and Marsdan Mills for purchase of the lots of cloth. The Tribunal, after perusing the letters of the syndicate, held that each member had a 20 per cent. share in the profit out of the transaction in question. It was also noticed by the Tribunal that each member of the syndicate has shown his share of profit in the return filed by him and the profit is assessed in his hands. Thus, it is apparent that the profit shown as Rs. 23,19,847 belongs to others with whom this syndicate was not directly or indirectly concerned. The charts were produced in the original proceedings. The profit was earned by the other co-purchasers whose names appear in the chart which was produced along with the communication dated October 1, 1987, annexure " J ", before the order of assessment in the original proceedings. In paragraph 3 of the communication dated March 18, 1988, certain reasons have been given to substantiate the allegations of escapement of income. The first reason given is that the recovery of certain documentary evidence from the premises of the petitioner-firm during the course of search. This document was very much available during the original proceedings. The second ..... X X X X Extracts X X X X X X X X Extracts X X X X
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