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TMI Blog2023 (4) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2013-14. 2. The assessee has raised cross objections by stating that the reopening of assessment under section 147 of the Income Tax Act, 1961 ["Act" in short] is invalid and the ld. CIT(A) failed to adjudicate the issue properly. Since this issue goes to the root of the matter, we proceed to decide the issue of reopening of assessment first. 3. Facts are, in brief, that the assessee is engaged in the business of providing services related to back office and furnished its return of income for the assessment year 2013-14 on 25.09.2014 declaring total income of Rs..55,08,43,260/-. The assessee also declared book profit at Rs..77,28,18,938/-. The case of the assessee was selected for scrutiny and after following due procedure, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also claimed as a deduction in the current year income computation on the grounds that the same was offered as income in the earlier year. The above treatment was not in consonance with the decision of the Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India P. Ltd. (312 ITR 254) and in view of the above, the MTM gain of Rs..3,91,85,765/- as on 31.03.2013 was added to the total income of the assessee. 4. On appeal, the ld. CIT(A) has upheld the reopening of assessment and so far as merits of the case is concerned, the Assessing Officer was directed to delete the addition. 5. Against the confirmation of reopening of assessment, the assessee filed Cross Objections and so far as merits are concerned, the Department is in ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer there is an escapement of income. The case of the assessee is that whenever there is MTM loss, debited to P & L account and no claim was made. So far as MTM gain is concerned, the same was not brought into P & L account and submitted that neither the assessee claimed the loss in the return of income nor gain was shown in the income computation. Thus, the Assessing Officer has reopened the assessment under section 147 of the Act within four years. The reasons recorded for reopening are extracted as under: "The reasons for reopening the assessment under section 147 of the IT Act in your case for the assessment year 2013-14 are communicated as under: "Scrutiny assessment for A.Y. 2013-14 was completed u/s 1443(3) of the IT Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 143(3) of the Act dated 25.03.2016 and subsequently, the assessment was reopened on the ground that MTM gains have neither been credited in the profit and loss account nor offered as income in the statement of computation is the main reasons for reopening. 9. Under these facts and circumstances, when the assessee was treating the loss in different method and gains in another method, the assessee should have been explained it before the Assessing Officer during the course of scrutiny assessment proceedings under section 143(3) of the Act. However, there is nothing on record that the assessee has put up a note to the Assessing Officer with regard to treatment of losses as well as gains. Under these facts and circumstances of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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