TaxTMI 
TaxTMI 
2013 (3) TMI 149
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....hat the learned Commissioner of Income Tax (Appeals) erred in holding that the learned Assessing Officer was justified in reopening the assessment made by him under section 143(3) of the Income Tax Act, 1961 in absence of any new material or information relating to alleged escapement of income. 4) That the learned Commissioner of Income Tax (Appeals) erred in relying on the provisions of section 124(3) of Income Tax Act, 1961 to hold that time limit to raise objection against the issue of notice under section 148 had expired. 5) That the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 1,51 09,660 arbitrarily alleging suppression of sales of 25 Kg. of Gold, when no such suppression was found and when the assessment was reopened on the belief of escapement of income due to alleged inflation of purchases. 6)That the learned Commissioner of Income Tax (Appeals) erred in confirming interest of Rs14.34.628 charged under section 234B and of Rs.1,566 charged under section 234D of the Income Tax Act, 1961. 3. The assessee company is engaged in trading and refining of gold and silver items. The original assessment u/s 143(3) of th....
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....ce of reassessment has been assessed. The ld. Counsel explained further that the AO reopened the case for inflated purchase value of gold as per reasons recorded on 15.09.2008 (at page 3 of the paper book). However on appeal the ld. CIT(A) accepted that there is no inflation but the ld. CIT(A) sustained the addition under the head unaccounted sales and not on account of bogus purchase. Therefore the ld. Counsel submitted that there is no addition on the very reason for reopening. Hence the ld. Counsel contended that "reassess such income and also any other income chargeable to tax which has escaped assessment" by which the words "and also" cannot be read as being in the alternative and those words to be read as being conjunctive. Further the ld. Counsel submitted by pointing out that the Parliament has not used the word "or" . For that the ld. Counsel relied on the following decisions :- i) Ranbaxy Laboratories Limited vs CIT (2011) 336 ITR 136 (Jabalpur Bench, MP HC) ii) CIT vs Jet Airways Limited (2011) 331 ITR 236 (Bom) iii) Power Pack Condutors vs ITO- ITA NOs. 7900 to 7901/Mum/2010 iv) Saif Alikhan Mansurali vs ACIT- ITA No.1093/Mum/2009 ....
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....e followed by other notices and the re-assessment was framed by the AO and made the addition under the head "bogus purchases." On appeal to the ld. CIT(A) the ld. CIT(A) was of the view that this addition was not under the head "bogus purchase" but under the head "suppression of sales" which the department had also not challenged it before the Tribunal. Accordingly this addition was made under the head "suppression of sales" of 25 kg of gold. Therefore we are of the view that the reason for reopening the assessment is quite justified as we need not go into the sufficiency of the reasons for reopening. It is only the prima facie reason to believe that income has escaped assessment. If the AO was of the reason that there is a specific disclosure of each material fact and that such disclosure should not be garbled or hidden in the material which has been filed by the assessee to the AO. The assessee must act with candour. Further even when specific and pointed queries were made while framing 143(3) assessment the AO cannot be said to have formed an opinion if explicit opinion not recorded by the AO. Therefore the reason to believe is a different one as existing in the present statute....
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....12.2003 and 5 kgs of gold bars on 3.1.2004 from M/s. J.J.Gold House, Kolkata. It was also stated by the ld. Counsel that this gold bars were shown in the stock on the same date and in the closing balance 31.3.2004. Further this gold bars were also shown as opening stock since the rate was not fixed at the time of receipt of gold. The assessee had not shown it in purchase for the financial year 2003-04. After fixing the rate on 06.07.2004 the gold bars were shown as purchased in the next financial year 2004-05. The gold bars were sold in that financial year 2004-05 is the explanation of the assessee. The authorities disbelieved the explanation on the ground that the alleged gold bars of 25 kg were sold during the financial year 2003-04 because there was no closing stock at the end of the year. The AO categorically found that the claim of the stock of 25 kg gold bars lying with the assessee at the end of the year is not correct. The AO further found the claim of sale of 25 kg of gold bars in the financial year 2004-05 is also false. Hence the decision of the Hon'ble Supreme Court in the case of Kelvinator (India) Ltd 320 ITO 561 (SC) as relied by the ld. Counsel for the assessee is q....