1998 (1) TMI 10

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....on May 12, 1977, for carrying on the said business and it took over the trademark of the beedies manufactured by the firm. The company set up a factory at Naidupet which is in a backward area. Some of the raw beedies were entrusted to the contractors for being manufactured and with this input along with raw beedies manufactured by the assessee itself in the industrial undertaking, the further processes of heating, ringing, bellying, wrapping and packing were carried on with the consequence that the finished product was made in the factory which is in the backward area. The assessee claimed deduction under section 80HH of the Income-tax Act. For the assessment year 1979-80 which is the first year in which the industrial undertaking was estab....

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....stioned the issue of these notices for these assessment years on the ground that they lack jurisdiction inasmuch as the facts have been disclosed before the assessment was made and the claim of the F assessee was considered and that proceedings are pending with respect to the same. In the counter-affidavit, it is not denied that a list of contractors to whom the work was entrusted, the number of beedies manufactured and the amount paid was actually given. But it is stated that this information was not sufficient and, therefore, it amounted to omission to give all the primary facts and, therefore, the Income-tax Officer had the jurisdiction to reopen the matter. Learned counsel for the petitioner submitted that the impugned notices wer....

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....or a deduction in respect of profits and gains from newly established industrial undertakings in a back-ward area. Where the gross total income includes profits and gains derived from an industrial undertaking in a backward area, a deduction of 20 per cent of such profits is allowed therefrom. Sub-section (2) of section 80HH lays down the conditions, one of which is that the industrial undertaking should manufacture or produce articles in any backward area and another condition is that it should employ ten or more workers in the manufacturing process carried on with the aid of power. It is not the case of the Revenue that any of these conditions are not fulfilled. Their only case is that the entire manufacturing activity from beginning to e....

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.... do at the time of the assessment and he seeks to do the same by reopening the assessment. The question is whether he can do it by stating that there was an omission on the part of the assessee to disclose fully and truly all material facts. In the case of Parashuram Pottery Works Co.Ltd.v.1TO [1977] 106 ITR 1, the Supreme Court stated that the duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that, his duty ends. It is for the Income-tax Officer to draw the correct inference from the primary facts. It is no responsibility of the assessee to advise the Income-tax Officer with regard to the inference which he should draw from the primary facts. If an Income-tax Office....