TaxTMI 
TaxTMI 
2011 (4) TMI 1166
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....ng Ltd. and Parle International Ltd. The manufacturing company launched a new product by the name of "Fanta". The petitioner, therefore, and for other reasons incurred expenditure by way of discount of Rs. 28.98 lakhs to the customers as against Rs. 6.15 lakhs incurred in the preceding year in respect of the well established products, which it was selling for some years in the past. 3. The Assessing Officer issued notice dated June 24, 1998, requiring the petitioner to explain, inter alia, as to why there was disproportionate increase of discount to the extent of Rs. 28,98,127 in comparison to the previous year. The petitioner tendered its explanation, vide letter dated July 21, 1998. Subsequently, another letter dated November 27....
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....nt year. It was submitted that earlier the assessment had been framed under section 143(3) of the Act and as such, since the notice has been issued beyond a period of four years from the end of the relevant assessment year, the ingredients of the proviso to section 147 of the Act would be required to be fulfilled by the respondent for the purpose of assuming valid jurisdiction under section 147 of the Act. Referring to the reasons recorded, it was submitted that there is not even whisper therein to indicate even failure or omission on the part of the petitioner to disclose fully and truly all material facts. It was, accordingly, submitted that the condition precedent for invoking section 147 of the Act beyond a period of four years from the....
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.... or section 148 of the Act ; or (ii) to disclose fully and truly all material facts necessary for its assessment. In the present case, admittedly, the first situation does not exist. In the circumstances, the Assessing Officer is required to establish that income chargeable to tax has escaped assessment by reason of failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration. 7. For this reason it may be germane to refer to the reasons recorded by the Assessing Officer for reopening the assessment which read as under : "It was noticed that the expenditure for discount of Rs. 26,24,057 paid to various customers has been paid ....
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....ision of the Supreme Court in the case of CIT v. Coal Shipments P. Ltd. [1971] 82 ITR 902 (SC) and the decision of this High Court in the case of Gujarat Mineral Development Corporation Ltd. v. CIT [1983] 143 ITR 822 (Guj). In fact, in the reasons recorded, it is stated that due to mistake income had been underassessed. This mistake apparently is the mistake on the part of the Assessing Officer who framed the original assessment in allowing the expenditure which, according to the successor-Assessing Officer, could have been held to be capital expenditure. In the entire reasons recorded there is nothing whatsoever to indicate that there is any failure to disclose fully and truly all material facts on the part of the petitioner. In the circum....