TaxTMI 
TaxTMI 
2013 (7) TMI 618
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.... were filed by the petitioner. Ultimately, the assessment was framed on March 9, 1999, making certain additions and disallowances in the return filed by the petitioner. 3. After such scrutiny assessment was completed, the Assessing Officer issued a letter dated August 19, 1999, and called upon the petitioner to explain the following points : "1. Excise duty relatable to closing stock of finished goods. In para. D of schedule 16 it is written that excise duty on the closing stock of the finished goods has not been included in its value and the same has not been debited in the profit and loss account. Here it is to bring to your notice that excise is leviable on manufacturing of goods and since the finished goods have been manufactured, liability for excise has accrued. Moreover, in view of the hon'ble Supreme Court's decision in the case of Mc.Dowell, it is held that excise is part of the turnover, therefore, since the excise duty has not been provided during the year, the same cannot be allowed under section 43B, however, the value of the closing stock must include the component of excise duty. 2. Patterns and dies claimed as revenue expenses : ....
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....ans costs, not being direct costs allocated in the ratio of the export turnover in respect of trading goods to the total turnover.' There is no allocation out of the directors' remuneration, auditors' remuneration, legal and professional fees, bank charges, clearing expenses, etc. Entire head office expense has to be proportionately allocated before allowing deduction under section 80HHC on profit of export trading activity. You are requested to offer your explanation and clarification on the above issues and explain why remedial action should not be taken to revise the assessment order to bring to tax any income having escaped assessment in view of the above observation." 4. On March 30, 2001, the Assessing Officer issued a notice for reopening of the assessment. The reason recorded by the Assessing Officer contained only one ground, namely, "on verification of the assessment records it is noticed that the provision for retirement benefits of the employees included an amount of Rs. 41.83 lakhs pertaining to the earlier years. Since you are following the mercantile system of accounting the above amount is required to be disallowed for the year under consideration". ....
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....refore, for the Assessing Officer to assume jurisdiction for reopening the assessment, both the conditions of his belief that income chargeable to tax has escaped assessment and the same was for the reason of the assessee failing to disclose truly and fully all material facts, must be satisfied. 8. The petitioner has strongly urged that all the four questions were threadbare examined by the Assessing Officer during the course of the original assessment. There was no failure on the part of the assessee to disclose any of the material facts. It is also the case of the assessee that the Assessing Officer issued notice only at the behest of the audit party. 9. In the petition, the assessee has pointed out disclosures during the original assessment in the following manner : "4. Particularly with reference to four issues which are now sought to be raised by the respondent in the course of reassessment proceedings they were gone into in detail in the course of original assessment and considered by the respondent and a decision was taken thereon by him. Hereinbelow is set out with reference to the said four items, the correspondence and the decision taken by th....
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....im under section 80HHC of the Act : The working of the claim under section 80HHC for export benefits was given by the petitioner along with the return accompanied by the report of the chartered accountant. The issue was dealt with by the petitioner in its letter dated January 22, 1999, in para. 2(b). Thereafter, another letter was given on February 24, 1999, whereby in para.1 thereof, the petitioner supplied the revised working for deduction under section 80HHC by annexure BA of the said revised working while passing the assessment order. The petitioner says that the respondent in para. 5 deals with the relief under section 80HHC and in para. 15 has dealt with the relief under section 80-O. On other two points, as the explanation offered by the petitioner was accepted, no question of referring to the same in the assessment order arose. Hereto annexed as exhibit A is the copy of the assessment order dated March 9, 1999, received on March 22, 1999." 10. In addition to such averments, the petitioner has also produced several documents in the form of correspondences between the petitioner and the Assessing Officer during the course of the original assessment. For exa....