TaxTMI 
TaxTMI 
2017 (11) TMI 1130
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....,14,89,928 made by the Assessing Officer under section 10B of the Income-tax Act, 1961. (ii) Whether on the facts and in the circumstances of the case the learned Commissioner of Income-tax (Appeals) was justified in holding that the issue of deduction under section 10B has attained finality as the Department has not contested this issue before the hon'ble Punjab and Haryana High Court in the assessment year 2011-12 whereas the fact is that this issue was not contested only due to the tax effect being below the monetary limits prescribed in Circular No. 21 of 2015 dated December 10, 2015*. (iii) Whether on the facts and in the circumstances of the case the judgment of the hon'ble Supreme Court in the case of J. B. Bodo and Co. Pvt. Ltd. v. CBDT [1997] 223 ITR 271 (SC) is applicable to the case of the assessee as in the case of J. B. Bodo Co. Pvt. Ltd. the transactions were done by the assessee with the permission of the Reserve Bank of India and also in the case of J. B. Bodo Pvt. Ltd., the hon'ble Supreme Court granted relief to the assessee on the basis of CBDT Circular No. 731 dated December 20, 1995* with regard to deduction under section 80-0 whereas in the cas....
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.... The Mall, Ludhiana. Dear Sir, Sub : Assessment proceedings for the assessment year 2007-08-Reg. Please refer to the above. 2. A notice under section 148 of the Income-tax Act has also been issued on March 25, 2014 and served on you on the same day. You have submitted vide letter filed on April 9, 2014 that return filed under section 139(1) of the Income-tax Act may be treated as return filed in response to notice under section 148 of the Income-tax Act. Vide aforesaid letter you have also requested for the copy of the reasons recorded for issue of notice under section 148 of the Income- tax Act for reopening of assessment proceedings. Copy of the reasons recorded by the Assistant Commissioner of Income-tax, Circle-VII, Ludhiana is enclosed herewith as annexure A. Notice has been issued after approval by the Commissioner of Income-tax-III, Ludhiana conveyed vide letter F. No. CIT-111/JB/109/2013-14/4131 dated March 25, 2014. 3. You are requested to furnish following details and explanations for completion of the reassessment in your case : (I) Copy of all the purchase and sale bills pertaining to the Noida unit. (II) Evidence of receipt of foreign exchange in respect ....
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....chase of gold and the assessee has done only job work. Foreign exchange realisation is only in respect of value of job work. There is a failure on the part of the assessee to disclose this material fact fully and truly which was necessary for assessment. Even the tax auditor in the report required to be submitted under sub- section 5 of section 10B of the Income-tax Act has submitted an incorrect report in Form 56G under rule 16E of the Income-tax Rules. In the report so submitted the auditor has certified incorrect figure of foreign exchange realised in India in respect of export turnover. The aforesaid facts pertaining to the assessment year 2007-08 have come on record during assessment proceedings for the assessment year 2011-12. These facts were not available with the Assessing Officer during the course of proceedings for the assessment year 2007-08. It has not exported any item manufactured by it in 100 per cent. export oriented unit established in Noida. Such facts were not avail able with the Assessing Officer during assessment proceedings for the assessment year 2007-08. New facts have come to light only in the proceedings for the assessment year 2011-12 that the assessee....
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....tions. The definition has been given as under : 'unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of goods.' From the definitions reproduced above it is apparent that the title of goods never passed to the assessee. The assessee never had the dominion over the gold bars claimed to have been purchased by it. The ownership always remained with the sender. The assessee is involved in export of jewellery then it has to be the owner of gold from which the jewellery is manufactured. In the instant case the gold or old jewellery was received by the assessee for making or remaking. It is clearly mentioned in the so-called purchase or sale bills that the gold or old gold jewellery has been received free of cost by the asses see. The gold or old gold jewellery has to be returned by the assessee specifically mentioning as to (i) what was the quantity received in advance free of cost, (ii) what the wastage/manufacturing l....
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....not required to bring the entire sale proceeds of export turnover in India. It has been submitted that credit for payments in foreign currency is to be allowed. The reliance on circular is of no help as the assessee is not at all involved in export of any article manufactured by it as it was never be owner of the jewellery manufactured. Moreover, no payment in foreign currency has been made. (vi) The assessee has also submitted that the term 'manufactured' has to be understood in wider perspective. It has been submitted that if an operation or process that renders a commodity or article fit for use which is not otherwise fit should be considered as manufacturing. Section 10B provides benefits only with regard to profits derived from export of article or thing manufactured. The assessee may have manufactured the jewellery items but the same was only for job work and not for purpose of export. Still the fact remains that the assessee has to manufacture any article of which it was the owner. When the assessee manufactures anything of which somebody else is the owner it is called job work. It is pertinent to mention that exemption under section 10B of the Income-tax Act is av....
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....arlier year was arrived at." The Punjab and Haryana High Court in the case of Dashmesh Transport Company (P.). Ltd. v. CIT [1980] 125 ITR 681 (P&H) said (page 683) : 'A perusal of the judgment annexure "F", would show that in the earlier case. the Tribunal did not express any opinion on the question as to whether the expenditure incurred by the assessee-company was the capital expenditure or business expenditure and instead disallowed the deduction on the ground that the same was barred by the provisions of section 40(a)(ii) of the Act. On a reference under section 256(1) of the Act, the Division Bench of this court (Dashmesh Trans port Co. Ltd. v. CIT [1974] 93 ITR 275 (P&H)) reversed that finding of the Tribunal and there are occasion to express any view on the question of the nature expenditure. As no opinion has been expressed in the judgment as to whether the alleged expenditure was the capital expenditure or a business expense, the judgment cannot, by any stretch of reasoning, operate as res judicata. Otherwise also it is well settled that a finding on any matter in relation to a particular year of assessment does not operate as res judicata on a similar question in t....
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....overed by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Even the tax auditor has given certificate which is not correct because export turnover has wrongly been reported. Thus there is a failure on the part of the assessee to disclose the material facts fully and truly which were necessary for assessment. The assessee actually claimed exemption under section 10B of the Income-tax Act to the extent of Rs. 2,19,70,207 in the assessment year 2007-08. The claim made by the assessee is not allowable in view of the facts emerging during assessment proceedings for the assessment year 2011-12 which were not made available to the Assessing Officer during proceedings for the assessment year 2007-08. In the case I. P. Patel and Co. v. Deputy CIT [2012] 346 ITR 207 (Guj) the hon'ble Gujarat High Court has upheld the issue of notice under section 148 of the Income-tax Act beyond four years when there was prima facie some material on the basis of which the assessment could be reopened. Hence I have reasons to believe that income of the assessee has escaped assessment by way of excessive relief allowed to it because of the failu....
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.... have in his possession certain material or information on the basis of which he could prima facie have reason to believe that income escaped assessment. The Assessing Officer has relied upon the judgment of the hon'ble apex court in the case of Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC) observed as under : 'At the initiation stage, what is required is 'reason to believe', but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials could conclusively prove the escapement is not the concern at that stage.' 3.10 After initiation of proceedings, the Assessing Officer could conclude on the basis of other information and explanation of the appellant that no income had escaped assessment, yet for acquiring the jurisdiction, the Assessing Officer could still have valid basis on the basis of information available at the time of initiating action under section 147/148 of the Act to have prima facie reason to believe that such income escaped assessment. The informatio....
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....change of fact is merely change of opinion. It is seen that the submissions made by the assessee are not factually correct because new facts had come to light during assessment proceedings for the assessment year 2011-12 which were never before the Assessing Officers in earlier years. Such facts were never before any of the Assessing Officers in earlier years. Accordingly, it is held that the objections raised by the assessee for reopening under section 148 are not correct. Further, it is seen from the reason recorded by the Assessing Officer that the Assessing Officer applied his mind to this information by verifying the assessment record. 3.12 Keeping in view the aforesaid facts, the Assessing Officer was fully justified in initiating the proceedings under section 147 read with section 148 of the Income-tax Act. This ground of appeal is accordingly dismissed." 14. The learned authorised representative has submitted that the case has been continuously examined under section 143(3) for the year in question and no new facts have been came in to force. The fundamental issues are being looked into examining the validity of the reopening. 1. Full and true disclosure. 2. Notice a....