TaxTMI 
TaxTMI 
2011 (11) TMI 137
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer. 3. The Petitioner filed its return of income for Assessment Year 2004-05 on 31 October 2004. As the book profits under Section 115 JB were higher than the tax on the total income, the total income was computed under Section 115JB and a tax of Rs.10.12 lakhs was paid. On 7 January 2005, a revised return of income was filed by which an amount of Rs.1.10 crores representing a loan which was remitted by an Overseas Lender was reduced from the total income declared by the Petitioner. 4. The Petitioner had in 2001 obtained a loan of Swiss Franc one million from a Company based in Switzerland, George Fischer A.G. The loan was availed of for the purpose of financing the acquisition of plant and machinery. The Petitioner ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The copy of the said decision is enclosed herewith." 6. Apart from this disclosure, in the revised computation of income, the Petitioner had shown an amount of Rs.1.10 crores as Sundry Credit Balances written back to the Profit and Loss Account and not considered as income. A note appended to the computation of income was as follows:- "Sundry Credit Balance being Loan - the remission of Liability Written Back Not Considered as income - Relied on the decision of Gujarat High Court in the case of CIT v/s. Chetan Chemicals Pvt. Ltd. 267 ITR Page No.770." 7. The Assessing Officer passed an order of assessment on 29 September 2006, accepting the computation of income. A notice under Section 148 was issued to the Petitio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessing Officer has held that the claim of the Petitioner that there was no failure to disclose fully and truly all the facts material to the assessment is not correct. 9. Counsel appearing on behalf of the Petitioner submitted that (i) The reopening of the assessment in the present case is beyond a period of four years of the end of the relevant Assessment Year; (ii) The jurisdictional condition for reopening an assessment in such a case is that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that Assessment Year; (iii) Both in the computation of income as well as during the course of the assessment proceedings by a letter dated 14 September 2006, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... facts, there was a disclosure by the assessee during the course of the assessment proceedings of the fact that (i) During the previous year ending 31 March 2004, a Memorandum of Understanding (MOU) was entered into with a Swiss Company; (ii) Under the MOU, the outstanding balance of the loan was settled at Swiss Francs 480,000 as against the outstanding balance of 800,000 Swiss francs; (iii) The assessee has written back an amount equivalent to Swiss Francs 320,000 equivalent to Rs.1.10 crores as a loan not payable. The assessee relied upon a decision of the Gujarat High Court in CIT v/s. Chetan Chemicals Pvt. Ltd. 267 ITR 770 in support of the submission that the writing back of a loan did not constitute income. Whether the assessee is ri....