TaxTMI 
TaxTMI 
2014 (8) TMI 1140
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....65/- for A.Y. 1998-99 will not be eligible for set-off as per section 79 of the Act and by including the said claim in the return after reconstitution of share holding pattern has provided inaccurate particulars and hence the assessee has not made the disclosure of material fact. Therefore, the reopening u/s, 147 is valid. 3. Whether the on the facts and circumstances of the case and in law, the information which was submitted before the assessment in a general manner can be termed as 'full' and 'true' disclosure. 4. The appellant craves leave to add, amend or alter any of the above grounds of appeal. 3. The assessee company is a manufacturer of Wheel rims of various light, medium and heavy commercial vehicles. It was incorporated on 18.01.1996 with Kalyani Group holding of 75% and Lemmerz Werke GMBH Germany holding remaining 25%. Lemmerz Werke GMBH is a Public Limited Company listed in Frankfurt Stock Exchange. In June 1998, Hayes Corporation, USA an entity listed on New York Stock Exchange acquired Lemmerz Werke GMBH, Germany. Thereafter, Lemmerz Werke GMBH (now a part of Hayes Group USA) increased its shares holding in the appellant company to 85% by acquiri....
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....second round of assessment proceedings for the A.Y. 2003-04. Now, in the first round of assessment proceedings, the issue of change in share capital was conspicuously deliberated by the AO while framing the 1st round assessment dated 24-3-2006. In fact, at Para no.2 (on page 1 & 2), there is elaborate discussion on this aspect, i.e. transfer of 60% shares from Kalyani Croup of Hayes Croup. Thus, the factual matrix related to the present issue was elaborately discussed and appreciated by the learned AO in the process of 1st round scrutiny. It will transpire, all related facts were duly placed before the AO and his mind application on this factual matrix was complete, Now, vide reassessment proceedings (challenged presently), the learned AO feels that due to this transfer of 60% shares, section 79 gets triggered. On merits, the analogy of the learned AO is clearly wrong. Yet, the fact remains, basic factual matrix was clearly communicated by the appellant and the same was deliberated upon. As such, the process of mind application was complete and it can't be said later on that mind application to consequential aspect of such issue is not present. The barrier to reopening of compl....
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.... for the appellant to lead the Assessing Officer as to what inferences can be drawn by him as this work falls in the domain of the Assessing Officer. Therefore, from the above facts, it is clear that the appellant had disclosed all the material facts relevant for the assessment and as per proviso to Sec. 147, the Assessing Officer cannot exercise jurisdiction to reopen the assessment after lapse of four years. Therefore, it is held that the Assessing Officer lacked jurisdiction to reopen the assessment proceedings by virtue of operation of 1st proviso to Sec. 147 of Income-tax Act and accordingly reopening was not valid. The ground taken by the appellant is thus allowed." 5.3 Since the reopening was held invalid, the CIT(A) was refrained from commenting on the merit of the issue at hand. The same has been opposed before us on behalf of the Revenue, inter alia, submitted that the CIT(A) was not justified in holding that the reopening of assessment in this case was not valid when the assessee has not made full and true disclosure of all material facts necessary for its assessment. The CIT(A) was not justified in holding that the assessee company has made full and true disclosure of ....
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....mbh with 75% & 25% equity respectively. The assessee company acquired the "Wheel Rim" division of Bharat Forge Ltd and commenced manufacture of Wheel Rims from 4-6-1996. On 30-6-1997, Hayes Corporation, USA, acquired Lemmerz Werke Gmbh and in August, 1998, the Hayes Group increased its holding in the company to 85% by acquiring an additional 50% of equity held by the Kalyani Group. The assessee company relies on Hayes Lemmerz Holding Gmbh, the parent company." 6.1 Since notice u/s. 148 of Income-tax Act has been issued on 29.03.2010 in respect of assessment completed u/s.143(3) of Income-tax Act on 24.03.2006 i.e. after lapse of four years 1st proviso of sec.147 comes into operation. For the sake of clarity, the proviso alongwith explanation thereto is reproduced as under: "Provided that where an assessment under sub-section(3) of section 143 or this section has been made, for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to make a return u/s. 1....
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....the Legislature has put in the Explanation, which has been set out above. In view of the Explanation, it will not be open to the assessee to say, for example - I have produced the account books and the documents : You, the Assessing Officer, examine them, and find out the facts necessary for your purpose : My duty is done with disclosing these account books and the documents. His omission to bring to the assessing authority's attention those particular items in the account books, or the particular portions of the documents, which are relevant, will amount to 'omission to disclose fully and truly all material facts necessary for his assessment'. Nor will he be able to contend successfully that by disclosing certain evidence, he should be deemed to have disclosed other evidence, which might have been discovered by the assessing authority if he had pursued investigation on the basis of what has been disclosed. The Explanation to the section gives a quietus to all such contentions; and the position, remains that so far as primary facts are concerned, it is the assessee's duty to disclose all of them including particular entries in account books, particular portions, doc....
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....or law to be drawn by the latter. The duty under the said Explanation placed on the assessee, is only to disclose primary fact and not inferences. The caveat, however, remains that the material facts which could have been or even should have been discovered and unearthed by the Assessing Officer with due diligence form the books of accounts or other evidence, does not amount to disclosure. In this case, the Hon'ble Supreme Court has pointed out that Explanation has nothing to do with the "inferences" which the Assessing Officer is required to draw from the primary facts disclosed by the assessee. 6.4 In the present case, as the facts narrated in the original assessment order regarding change of share holding pattern which has been acknowledged by the Assessing Officer in Para 2 of its Order dated 24.03.2006 it is obvious that all the necessary facts were disclosed by the assessee. In the reasons recorded for reopening, the Assessing Officer acknowledges this position but proceeds with his satisfaction on the ground that applicability of Sec.79 of Income-tax Act was not examined by the Assessing Officer. As stated above after disclosing all the material evidences, it was not for th....