TaxTMI 
TaxTMI 
2006 (5) TMI 151
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....m record are that return of income was filed on 26-12-1989 admitting total income of Rs. 65,61,625. The return was processed under section 143(1)(a) on 31-3-1992 after making prima facie adjustments. Later on during the course of assessment proceedings for assessment year 1990-91 it was noticed that in the preceding assessment year the assessee-company had created a provision towards unexpired warranty to the tune of Rs. 21,08,550 out of sale proceeds of computers; thereby the assessee-company had suppressed sales to the extent of Rs. 21,08,550. Therefore, the Assessing Officer had reason to believe that income had escaped assessment for assessment year 1989-90. He reopened assessment by issue of notice under section 148 on 24-2-1993. No ac....
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....ssment on the basis of second notice. It merely bars any assessment on the basis of first notice beyond 31-3-1995. The second initiation is an independent action. Therefore, Assessing Officer was justified in reopening of assessment by issue of notice dated 13-10-1995. 4. Before us, Ms. Anita Sumanth, the ld. AR of the assessee submitted that Assessing Officer has not taken any action on notice issued on 24-2-1993. Therefore, he was satisfied that there was no escapement of income. The Assessing Officer has issued notice under section 148 on 13-10-1995 for the same reasons. Therefore, it is a case of change of opinion. She placed reliance on the decision of Hon'ble Delhi High Court in the case of Jindal Photo Films Ltd. v. Dy. CIT [1998] 2....
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....s to whether any return of income was filed in response notice under section 148, Mrs. Anita Sumanth, the ld. AR of the assessee failed to answer the query. No evidence was filed to prove that return of income was filed in response to notice issued under section 148 on 24-2-1993. Further it is seen from order sheet that Assessing Officer did not take any action in the matter probably due to oversight. After issue of notice under section 148, when no return is filed by the assessee, the Assessing Officer could have issued notice under section 142(1) requiring the assessee to file return of income. No such action was taken. Ultimately the reassessment proceedings initiated got barred by limitation on 31-3-1995. 7. The assessee has not produc....
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....sh facts which were not present at the time of original assessment would constitute a reasonable belief that income had escaped assessment within the meaning of section 147. Here also such facts which could have been discovered by assessing authority but were not discovered at the time of original assessment may not constitute new information. The facts of the case before us are entirely different. No assessment under section 143(3) consequent to reopening of assessment was framed and, therefore, decision of Hon'ble Delhi Court in the case of Jindal Photo Films Ltd will not be applicable. The assessee had not filed even return of income or any explanation based thereon it could be said that Assessing Officer applied his mind and came to con....
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....ssment, he can issue notice under section 148 within the time allowed under the Act. On the date of issue of second notice no reassessment proceedings were pending. The reassessment proceeding based on notice dated 24-2-1993 got barred by limitation on 31-3-1995. For assessment year under consideration assessment could have been reopened up to a period of ten years from the end of the assessment year 1989-90 as specified in section 149(1)(a)(iii) of the Act where income escaped was more than Rs. 1,00,000 or more. In this case condition precedent is satisfied and, therefore, in our considered view, the Assessing Officer was justified in reopening of the assessment. 9. The second issue for consideration in assessee's appeal relates to disall....
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....no concept of deferred revenue expenditure under Income-tax Act. Expenditure which is deducted for income-tax purposes is one which is towards a liability actually existing at the time but the putting aside of money which may become expenditure on the happening of an event is not expenditure. This principle was laid down by Hon'ble Supreme Court in the case of Indian Molasses Co. Ltd v. CIT [1959] 37 ITR 66. 12. There is a distinction between an actual liability in praesenti and liability de futuro which, for time being, is contingent. The former is deductible but not the later. However, Hon'ble Supreme Court in the case of Bharat Earth Movers Ltd held that if a business liability has definitely arisen in the accounting year, the deduction....