TMI Blog2009 (11) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome chargeable to tax had escaped assessment. Such belief can be reached in any manner, and is not qualified by a precondition of faith and true disclosure of material facts by the assessee as contemplated in the pre amended Section 147 (a) of the Act - as far as merits of the case is concerned, with regard to the permissible deduction under Section 80-IB of the Act, it is clear position that the assessee was not entitled to claim deduction on account of Duty Draw Back and DEPB incentives, as these incentive profits do not fall within expression “profits derived from industrial undertaking” in Section 80-IB of the Act. Therefore, Duty Draw Back and DEPB do not form part of net profits of the industrial undertaking for the purposes of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x return. The assessment was completed under Section 143 (3) of the Act on 27.3.2003 at Rs. 5,86,096/-. Subsequently, a notice under Section 148 of the Act was issued for re-assessment on the ground that some income has escaped assessment. After considering the objections filed by the assessee to the issuance of notice under Section 148 of the Act, the Joint Commissioner of Income Tax (Appeals) Range VI, Ludhiana, proceeded with the re-assessment and vide order dated 28.12.2006 (Annexure A-3), while following the decision of the Supreme Court in CIT v. Sterling Foods (1999) 237 ITR 579 and a decision of this Court in Liberty India v. Commissioner of Income-Tax (2007) 293 ITR 520, disallowed the deduction claimed by the assessee on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as wrongly granted to the appellant-assessee, for which he was not entitled. However, learned counsel for the appellant-assessee argued that initiation of the reassessment proceedings was not in consonance with the requirement of Sections 147 and 148 of the Act. Learned counsel argued that the Assessing Officer was not justified in re-opening the assessment, merely on the basis of change of opinion, and while framing the opinion that some income chargeable to tax has escaped assessment on account of non-disclosure of fully and truly all material facts necessary for assessment for the relevant assessment year. Therefore, he submitted that as far as the assessee is concerned, he has fully disclosed all the material facts necessary for assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ualified by a precondition of faith and true disclosure of material facts by the assessee as contemplated in the pre amended Section 147 (a) of the Act. In the instant case, as far as merits of the case is concerned, with regard to the permissible deduction under Section 80-IB of the Act, it is clear position that the assessee was not entitled to claim deduction on account of Duty Draw Back and DEPB incentives, as these incentive profits do not fall within expression "profits derived from industrial undertaking" in Section 80-IB of the Act. Therefore, Duty Draw Back and DEPB do not form part of net profits of the industrial undertaking for the purposes of Section 80-IB of the Act. 5. In view of the above, we do not find any illegality in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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