TaxTMI 
TaxTMI 
2013 (12) TMI 711
X X X X Extracts X X X X
X X X X Extracts X X X X
....43(1) on 15.3.2004. Thereafter, scrutiny assessment was made u/s 143(3) on 28.3.2006. Action u/s 147 was taken by the AO by issuing notice u/s 148 dated 26.8.2010. The assessment was completed u/s 143(3) r.w.s. 147 on 7.12.2010 by making addition of Rs.55660971/- towards `Disallowance on account of recovery made out of amount shown written off in earlier year but not credited to P&L Account". The assessee challenged the initiation of reassessment proceeding before the ld. CIT (A) but without success. Now the assessee is before us challenging the initiation reassessment proceeding as well as the making of addition on merits. 3. Firstly, we are espousing the challenge to the initiation of reassessment proceedings. From the facts recorded abo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be profits and gains of business or profession and chargeable income tax as the income of that year." In view of above facts of the case, I have reasons to believe that the income to the tune of Rs.55660971/- has escaped assessment owing to the failure on part of assessee to disclose fully and truly material facts necessary for asstt. and hence notice u/s 148 is hereby issued for reopening asstt. u/s 147 of the IT Act for the AY 2003-04." 4. From the reproduction of the above reasons it is clear that the reassessment was initiated for the reason that clause 20 of Form 3CD report submitted by the auditor indicated that a sum of Rs.5.56 crore was chargeable to tax u/s 41(1) of the Act in respect of amount recovered against rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... current year. The second note elaborates further that the said amount represents amounts received against recoverables written off, both during the year and in earlier years, the breakup of which is not ascertainable. 6. It is no doubt true that the said sum of Rs.5.56 crore has not been separately credited to the P&L a/c, a copy of which is available on page 9 of the paper book. However, it is pertinent to note that Schedule no. 12 to the P&L A/c is that of `Administrative and other expenses'. A copy of the Schedule is available on page 14 of the paper book, from which it can be seen that the assessee has debited a sum of Rs.58358418/- under the head `Non performing assets written off (Net)'. The detail of Rs.5.83 crore, being 'Net' of n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial facts necessary for assessment. The Hon'ble Delhi High Court in NTPC Ltd. Vs. DCIT 2013 84 CCH 133 Del- HC has held that issue of notice u/s 148 for reopening of assessment beyond four years from the end of the relevant assessment year is not justified in cases where the assessee has made true and full disclosure of all particulars necessary for its assessment. Similar view has been taken by the Hon'ble Bombay High Court in Voltas Ltd. Vs. ACIT 2012 349 ITR 656 (Bom). There are enumerable cases laying down similar proposition. 8. Adverting to the facts of the instant case it is observed that original assessment in this case was completed u/s 143(3) on 28.3.2006. A period of four years from the end of the relevant assessment year comple....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... debit and the net excess was debited. There was appropriate, full and true disclosure of all the relevant aspects on this point. The very fact that the assessment has been reopened on the basis of audit report already available on record making such observations, aptly demonstrates that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. This material condition is lacking in the extant case. In view of the foregoing, we are of the considered opinion that since there was no failure on the part of the assessee to disclose 'fully and truly' all material facts in relation to the amount recovered against recoverable written off to the tune of Rs.5.56 crore, which formed t....