TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 587
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.... tax Rs. 70,47,44,252/- by assessment order dated 24.12.2010. It is alleged that the petitioner received notice on 11 April, 2014, under Section 142 (1) of the Act, to which it responded, pointing out that it was never served with any reassessment notice. It was thereafter served a notice, dated 28 March, 2014, proposing to reassess income for AY 2007-08. The petitioner filed its returns and, at its request, it was furnished with reasons for reopening the completed assessment, on 10.02.2015. It objected to reopening of its assessment, through representation dated 25 February 2015. On 27 February 2015, those objections were rejected. 3. In WP 10904/2016, the facts are that for AY 2008-09, the petitioner had filed its returns declaring an income of Rs. 23,80,55,757/-. Like for the other year, the case was selected for scrutiny and the assessments were framed, under Section 143 (3) after thorough scrutiny, on 31.12.2010. The sum brought to tax was Rs. 86,80,81,180/-. On 30.03.2015 the revenue issued notice for reassessment for AY 2008-09 under Sections 147/148; the petitioner resisted, pointing out that the original assessment was completed under Section 14 (3) of the Act. These were....
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....fference should be treated as Capital Reserve. 38. The goodwill arising on amalgamation should be amortised to income on a systematic basis over its useful life. The amortization period should not exceed five years unless a somewhat longer period can be justified." 6. Learned senior counsel submitted that the assessee company accounted for the amalgamation transaction in its books of accounts. This accounting is also in accordance with Generally Accepted Accounting Principles ("GAAP") and was certified / accepted by the statutory auditors. Accordingly, the assessee amortized the goodwill in the books of accounts and claimed them under the head "Depreciation/ Amortization" in the Profit and Loss account. However, as evident from the copy of reasons provided to the assessee the revenue alleged that the accounting of merger should have been under "pooling of interest method" wherein the difference between the value of investments in the subsidiary company and net assets so acquired should have been adjusted in the reserves and hence, there should not have been any question of creation of goodwill, had the assessee-company followed the "pooling of interest" method instead of the "Pur....
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....e Company Court when it has recognized and approved the scheme of amalgamation under sections 391 and 394 of the Companies Act. However, a perusal of paras 1 and 2 of the scheme approved on 09.10.2006, shows that all assets and liabilities of the transferor companies have passed on, in totality, to the transferee company thus indicating that it is a 'pooling of interest' method of amalgamation. It is thus, argued that clearly, an examination of the scheme of merger, especially the clauses which deals with amalgamation, 3.1 to 3.2.11 (which deal with the transfer of assets), Clause 7 which deals with the shareholding after amalgamation and clause 9 (which deals with the share capital reorganization) all show that the merger was following 'pooling of interest' method. 11. It is stated that in view of this position, clearly the assessee did not disclose the full and true facts and that the de facto position is different from the de jure position. Therefore the deduction taken by the petitioner for goodwill being the difference between the assets and liabilities was incorrect and a stratagem by the assessee to reduce its profit u/s 115JB of the Act by an amount of Rs. ....
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....nd true. A false disclosure is not a true disclosure. The disclosure must not only be true but must be full -' fully and truly'. A fake assertion, or statement, of material fact, therefore, attracts the jurisdiction of the ITO under section147." Analysis and Conclusions 14. It is apparent from the facts that the completed assessments for the two years, had taken into account the documents and materials. Those assessments were undeniably after scrutiny, finalized under Section 143 (3). Both assessments were completed in December 2010. While framing a similar assessment, for AY 2009-10, the AO noticed that the assessee had adopted a wrong method, of "purchase", while calculating depreciation, instead of the "pooling of assets" method, in terms of a different accounting standard. The assessee argues that there is absolutely no material on the record to justify re-opening of an otherwise valid assessment and the citing of a more appropriate method cannot mean that there was concealment of material facts. 15. Long ago, in Calcutta Discount, (supra) the Supreme Court had ruled as follows: "There can be no doubt that the duty of disclosing all the primary facts relevant to the....
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....t inferences - whether of facts or law - he would draw from the primary facts. If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. How could an assessee be charged with failure to communicate an inference, which he might or might not have drawn ? It may be pointed out that the Explanation to the sub-section has nothing to do with "inferences" and deals only with the question whether primary material facts not disclosed could still be said to be constructively disclosed on the ground that with due diligence the Income-tax Officer could have discovered them from the facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose "inferences" - to draw the proper inferences being the duty imposed on the Incometax Officer. We have therefore come to the conclusion that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this." 16. In Phool Chand Bajrang Lal vs. ITO (1993) 203 ITR 456 it was held that:- ....