TaxTMI 
TaxTMI 
2011 (9) TMI 592
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.... Officer?" 3. With the consent of the counsel for the parties, we have heard the appeal finally today itself on the aforesaid question. 4. The brief facts of the case are that the assessee is engaged in the activity of manufacturing and exports of garments. For the Assessment Year 2001-02, the assessee filed the return of income at Rs. 34,63,640/- on 30.10.2001. Thereafter, the case for the impugned year was selected for scrutiny and notice under Section 143(2)(ii) of the Income Tax Act (hereinafter referred to „the Act‟) was issued by the Assessing Officer (AO) and complied with by the assessee to the satisfaction of the AO and the returned income of the assessee was accepted and for the same, the assessment ord....
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....nal‟ for brevity). Though the appeal was partly allowed for statistical purpose, the same was restored the matter back to the file of the AO for fresh consideration, the Tribunal has also upheld the order of the CIT (A) affirming the validity of notice under Section 148 of the Act. 8. In the instant appeal, the assessee has questioned the orders of the Tribunal as according to the assessee, there was no reason to reopen the assessment because the entire issue was dealt out even at the time of original assessment and the issuance of notice under Section 148 read with Section 147 of the Act only amounts to change of opinion. 9. Admittedly, notice under Section 148 of the Act was issued after expiry of four years from the....
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....o disclose truly and fully all material facts necessary for assessment for above assessment year, the income chargeable to tax to the extent of Rs.11.66 lacs as mentioned above, has escaped assessment within the meaning of Section 147 of the Act." 11. Admitted facts are that the AO, during the course of original assessment proceedings, had made specific inquiry about the nature of interest income. The assessee had also given due reply thereto. Submitting that the interest income was assessable as business income because interest income was earned on fixed deposit with bank kept as margin money. This was so admitted even by the Tribunal. However, the Tribunal has still affirmed the validity of reassessment proceedings stating: ....
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....out that the reply to the queries given by the assessee are as follows: "Query No.1 1. Please explain why the foreign exchange of Rs.8,00,000/- which was not received in India within the six months from the end of F.Y. 2000-01 should not be excluded from the turnover for calculation of deduction u/s 80HHC. In fact that an amount under question seems to be Rs.7,99,726/- and not Rs.8,00,000/- as pointed out by you honour which is related to the receipt on 02/06/2000. We may made it clear that during the course of Asstt. Proceedings a tabular chart for an export sale and realization for the financial year 2000-01 was placed on the record where the realization relating to Bill NO. 9 4 6 and 9 6 9 dated 10th April, 2000 w....
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....when the assessment has been framed u/s 143(3) by considering the concerned matter and it was again made it clear during the course of proceedings initiated u/s 154, the initiation of proceedings u/s 148 on this issue is not only unjustified rather illegal and is against the natural law of justice. Interest Received - Rs.16.01 lacs The second query relating to interest income of Rs.16.01 lacs should not be deducted from the profit of business for calculation u/s 80 HHC of Income Tax Act, 1961 is also not justified. It was fully explained during the course of Asstt. Proceedings that interest received relates to interest on "Margin Money" which the assessee company deposited on account of business exigency and interest received thereon was in....