2017 (8) TMI 534

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....essee was known as M/s.Rajshri Packagers Limited. M/s.Rajshri Packagers had filed return of income for the assessment year 2010-11 declaring loss of Rs. 93.67 lakhs (rounded off). The return was taken in scrutiny. Assessing Officer passed the order of assessment under section 143(3) of the Act on 21.03.2014. To reopen such assessment, he issued impugned notice. In order to do so, he had recorded following reasons: "Reasons for the belief that income has escaped assessment: As per section 73 of the Act, any loss, computed in respect of a speculation business carried on by the assessee, shall not be set off except against profits and gains, if any, of another speculation business. Scrutiny of 3CD, B/s, P/L, Notes on accounts and computat....

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.... Government. The assessee credited the amount as sales tax/VAT incentives and reversed Rs. 13,99,95,001 which was accrued on provisional basis in earlier year. The net amount of Rs. 15,70,04,999 was disclosed as operating income. The company has already paid sales tax/VAT in excess of above eligibility of Rs. 29,70,00,000 from 200607 till date and would be eligible for refund of the same. It is quite clear from this note of account that assessee has already taken deduction on account of payment of sales tax/VAT in earlier years and has not shown as income of incentive of Rs. 13,99,95,001 which accrued on provisional basis in earlier years. Further, as the refund of sales tax/VAT has been crystallized during this year, entire amount of eligi....

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....3 of the Act. The reason itself records that scrutiny of the declarations made by the assessee revealed that the said sum of Rs. 12.02 crores was debited as a net loss relating to the transactions concluded on settlement basis. The Assessing Officer has not referred to any material which did not form part of the assessee's return to form this belief that the assessee's claim of loss was not allowable claim. In other words, from the face of the reasons recorded by the Assessing Officer, it can be gathered that the material which he seeks to rely upon, formed part of the return and accompanying documents filed by the assessee. There was thus no failure on the part of the assessee to disclose material facts. Counsel for the Revenue how....

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....y the Assessing Officer are based on documents on record produced by the petitioner along with the return of income. In fact, this issue was examined by the Assessing Officer during the original assessment. As can be seen from a detailed reply submitted by the petitioner to the Assessing Officer under a letter dated 19.03.2014, relevant portion of which reads as under: "3. Your goodself has asked details regarding reversal of incentive accrued in the earlier year of Rs. 139,995,001/shown in Schedule13 of the Audited Financial Statements. In this regard we submit that the assessee company is eligible to avail sales tax exemption benefits on sales tax/VAT collected on sales of finished goods and byproducts to the extent of its accepted fixe....