Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: due date for vat payment :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: form 3cd :: cpt :: list of goods taxed at 4% :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: ACCOUNTING STANDARDS :: VAT RATES
 
 
From the Courts »
  Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 CIT vs. Greenfield Hotels & Estates Pvt. Ltd (Bombay High Court)
 IndiaBulls Financial Services Ltd vs. DCIT (Delhi High Court)
 Maharao Bhim Singh of Kota vs. CIT (Supreme Court)
 Ravneet Takhar Vs. Commissioner Of Income Tax Ix And Ors.
 Jaiprakash Associates Ltd. Vs. Commissioner Of Income Tax
 Formula One World Championship Limited Vs. Commissioner Of Income Tax, International Taxation-3 And Anr.
 Commissioner Of Income Tax International Taxation-3 Delhi Vs. Formula One World Championship Ltd. And Anr.
 Reliance Communications Ltd vs. DDIT (ITAT Mumbai)
  Sushila Devi vs. CIT (Delhi High Court)

Validity of reassessment-Absence of material for reasonable belief
August, 16th 2007

CIT vs Mahesh Gum and Oil Industries
Citation 292 ITR 397 
 
Validity of reassessment - Absence of material for reasonable belief

Where satisfaction of the AO was not based on any specific information, the condition precedent was not satisfied. There was no material on record to infer that income had escaped assessment. The re-assessment proceedings were invalid.

High Court of Rajasthan

CIT vs Mahesh Gum and Oil Industries

D. B. Income-tax Appeal No. 113 of 2005

Rajesh Balia and R. P. Vyas, JJ

16 February 2006

Vivek Shrimali for the Appellant

JUDGMENT

This appeal is directed against the order of the Income-tax Appellate Tribunal, Jodhpur Bench, Jodhpur, dated September 15, 2004. The following two questions are suggested as substantial questions of law for consideration in this appeal :

"I. Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in law in holding that the reassessment proceedings were bad in law and based on the change of opinion, ignoring the fact that the proceedings under section 147 were validly initiated on the material evidence available on record ?

II. Whether the findings recorded by the learned Tribunal are contrary to record and perverse ?"

The respondent-firm was dissolved on November 4, 1983, and in response to a notice for the assessment year 1989-90 under section 148 a return was filed at nil income. The assessee has objected to assumption of jurisdiction by the Assessing Officer under section 147/148 and has also asked for reasons before issuing notice under section 148. The submission of the assessee was that assumption of jurisdiction itself was not sustainable. The assessment order was made against the respondent considering it to be an unregistered firm and a penalty proceeding under section 271(l)(c) was also initiated.

On appeal, the Commissioner (Appeals) vide his order dated September 21, 1988, upheld the objection of the assessee that the initiation of proceedings under section 148 was without jurisdiction and the proceedings were quashed. The said order was affirmed by the Tribunal by the order under appeal.

When the matter came up for hearing on December 2, 2005, this court directed learned counsel for the Revenue to place on record the reasons that were recorded by the Assessing Officer before assuming jurisdiction under section 147/148 of the Act of 1961. The same have been placed before us, which, inter alia, read as under :

"The overall transaction in a deposit of Rs. 21,24,248 has involved purchase of raw gwar plus processing expenses to manufacture gwar dal/split plus profit = Rs. 21,24,248 (sale).

If net profit on sale is estimated at 8 per cent., it comes to (Rs. 21,24,248 of 8 % Rs. 1,69,940).

Apart from the net profit, initial investment made in the purchase of gwar and further expenses incurred on processing stand as unexplained investment of the assessee-firm. However, money under rotation on account of sale consideration, will have to be taken into consideration and unexplained investment to be estimated accordingly. As per the information available on record, the unexplained investment may be estimated at Rs. 5 lakhs. Hence the total income escaped to investment is (5 + 1.69 lakhs) Rs. 6.69 lakhs.

Since an income chargeable to tax to Rs. 6.69 lakhs, for the assessment year 1989-90 has escaped assessment within the meaning of Explanation 2(a) of section 147 of the Income-tax Act, 1961, in the case of the firm, M/s. Mahesh Gum and Oil Industries, Osiyan, this is a fit case for issue of notice under section 148." A perusal of the aforesaid reasons clearly goes to show that even escapement of assessment has been held not on any existing material but by assuming certain state of things to exist for reasons best known to the Assessing Officer. While referring to the fact about the current account with the Allahabad Bank and as per the information available on record, no such information has been placed on record to satisfy that the subjective satisfaction required to exist was founded on any existing material. Moreover, it was not in dispute that the assessment of the subject-matter recorded and the reasons had already been made in the hands of Mohan Lal by regular assessment order.

In these circumstances, we find that no substantial question of law arises for consideration in this case and the same is, therefore, dismissed.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions