2002 (7) TMI 7

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....ent year 1984-85. The appellant claimed investment allowance on the said plant and machineries. Since the income of the appellant was not sufficient for availing of the entire investment allowance, the appellant also claimed carry forward of the investment allowance for the assessment year 1985-86. The return for the assessment year 1984-85 was filed on June 29, 1984, and the assessment order was passed on March 31, 1987. Similarly, the return for the assessment year 1985-86 was filed some time in the year 1985 and the assessment order appears to have been passed in 1987. The Income tax Officer thereafter issued notice under section 147 read with section 148 of the Income tax Act, 1961 (hereinafter referred to as "the Act"), on the groun....

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....er the date of filing of the return, since the transfer took place before the Assessing Officer passed the assessment orders for the relevant years, it was the primary duty of the assessee to disclose the primary fact regarding disposal of the machineries and since this was not done during the course of the original assessment proceedings, the Assessing Officer was justified in reopening the assessment under section 147 of the Act. learned counsel has heavily relied on the decision of the Bombay High Court in CIT v. I.B.M. World Trade Corporation [1982] 136 ITR 193 in support of his contention that since the assets were transferred after the date of filing of the return, the powers under section 147 of the Act cannot be exercised, as no fau....

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....ssessment proceedings. Learned counsel for the appellant has heavily relied on the aforesaid decision of the Bombay High Court and submitted that the facts in the said case were identical to the facts of the present case and that there also the machineries were transferred after filing of the return and before the assessment order was passed and the Bombay High Court took the view that if the machineries were sold in subsequent years, then at the time of filing the return, the assessee could not be credited with the knowledge of sales which were to take place in the future so that it could be said to have omitted or failed to disclose fully and truly the facts about such future sales and that, therefore, the provisions of section 147(a) ....

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....t clearly casts a duty on the assessee to inform the Assessing Officer about the transfer of the machinery or plant, on which investment allowance has been claimed or its carry forward has been claimed in the return, if such transfer takes place at any time before the expiry of eight years from the end of the previous year in which the asset was acquired or installed. In the case of I.B.M. World Trade Corporation [1982] 136 ITR 193, the Bombay High Court was concerned with a situation where the prohibition against the transfer of the assets in respect of which investment allowance was claimed, was introduced by the Finance Act, 1958, which came into force on January 1, 1958. In facts of that case, the machineries were installed before Ja....