TaxTMI 
TaxTMI 
2010 (10) TMI 851
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.... the time of issuance of notice this Court has observed that the question of taxability of the whole amount of Rs. 68,66,673 received as a result of cancellation of forward exchange contract, which is said to include the disputed amount of interest, is the subject-matter of a pending Tax Appeal No. 140 of 1999 between the same parties. The Court, therefore, directed that the hearing of the petition would be linked with the hearing of Tax Appeal No. 140 of 1999. The Court has granted interim stay whereby the petitioner was directed to participate in reassessment proceedings initiated by the impugned notice, but in the event of final order of reassessment any demand towards tax is raised, it would not be enforced against the petitioner until ....
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.... been credited to PandL a/c. It is further pointed out that the proceeds on cancellation of the foreign exchange contract credited to PandL a/c would not be liable to tax in the case of the petitioner. The said amount being a capital receipt on capital account is not amounting to transfer within the meaning of s. 2(47) and would not be liable to tax either as business profit or as capital gain! The AO upheld the contention of the petitioner in his assessment order passed under s. 143(3) of the Act on 15th April, 1994 wherein, after detailed discussion, he held that sum of Rs. 68,66,673 is not liable to be taxed. 6. Subsequent to this, the AO issued notice under s. 148 of the Act on 3rd Feb., 1995 for this very assessment year, int....
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....pt nor capital gain liable to tax, as it is a capital receipt. Thereafter, on 7th April, 2000 i.e. after about 6 years from the end of the assessment year the respondent has issued notice under s. 148 of the Act. Though the petitioner has asked for copy of reasons recorded, as per prevailing practice, copy was not supplied to the petitioner and hence the petitioner approached this Court by way of present petition. 10. Mr. Shah has submitted that the impugned notice is issued by the respondent beyond the period of 4 years from the end of assessment year and, therefore, the Revenue is required to discharge the onus that the petitioner is guilty of not disclosing fully and truly all material facts necessary for its assessment. He has....
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....o be deducted from the block of assets while making computation of income with reference to the adjustment of claim for depreciation on such assets to which such capital receipts were linked. He has further submitted that the assessee has also not disclosed primary facts with reference to interest element at assessment stage, therefore, such income part in the forward contract which could not be less than 12 per cent of the entire receipt, although such details have been deliberately concealed, has escaped assessment due to failure of the assessee to disclose true nature of the receipts with reference to the interest elements embedded therein chargeable to tax was wrongly excluded. He has, therefore, submitted that the income of Rs. 8,24,00....
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....ainable and hence the petition deserves to be dismissed. 13. We have heard the learned counsel appearing for the parties at great length and considered their rival submissions in light of the facts found on record and the relevant statutory provisions. The facts on record clearly reveal that this is the third round of litigation in respect of the same subject-matter. Initially the petitioner's claim regarding the nature of this receipt being capital receipt was accepted by the AO while framing original assessment under s. 143(3) of the IT Act. Thereafter, within the period of 4 years, a notice of reopening was issued, which having been challenged before this Court, was quashed and set aside and SLP preferred against that was also ....
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....eceipt not liable to tax. 14. After the second round of litigation in the form of s. 263 proceeding was over and after the Tribunal has quashed and set aside the order passed by the CIT under s. 263 of the Act the AO has issued notice on 7th April, 2000. Before issuing the notice for reopening, reasons were recorded wherein it is clearly stated that the AO without applying his mind, in this aspect of the issue, accepted the claim of the assessee. If the material facts are disclosed by the petitioner truly and fully and if the AO did not apply his mind it is not fault of the petitioner which can lead the AO to issue notice of reopening within the period of 4 years. The reasons recorded further reveal that the AO had not deducted th....