TaxTMI 
TaxTMI 
1999 (12) TMI 8
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....e the presence of the closing stock relating to the chips could give rise to a reasonable belief as envisaged under section 147(a) of the Income-tax Act, and in that view in concluding that the Assessing Officer had the jurisdiction to initiate proceedings under section 147(a) of the Act, in a valid manner?" The facts of the case are that the assessee filed a return of income on June 30, 1977, declaring the total income at Rs. 1,52,12,656. This was revised on January 18, 1978, and a total loss of Rs. 2,85,77,361 was declared in the revised return. The Assessing Officer completed the assessment on September 6, 1980, by determining the total income of Rs. 1,80,63,239. The assessee-company is engaged in the business of mining iron ore an....
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....sp; 1,19,60,670 ----------- A search and seizure operation ....
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.... 26,00,244 VMS Blue dust 11,03,606 13 1,43,46,878 ---------- ----------- ....
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....inasmuch as the ores must have been sold away before the last date of the relevant previous year, but missed to be taken into consideration by the person preparing the stock statement on account of non-reaching of the relevant information relating to sales. The Tribunal ultimately came to the view that the Department had found a paper not only from the business premises of the assessee but also from the file in which the papers relating to preparation of stock statement were maintained. The Tribunal thus held that at least a primary significance of this particular paper found during the search could not be brushed aside, although whether whatever is written therein could be accepted in toto or not was a different question. The Tribunal obse....
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....he value of the closing stock of the chips even at nil value at the original assessment stage coupled with the later discovery of a paper showing such fact, would clearly lead any person of ordinary prudence to the reasonable belief that the assessee had failed to disclose truly and fully all facts necessary for the assessment which had led to underassessment of income. Finally, the Tribunal came to the conclusion that on account of failure of the assessee to at least to indicate the presence of stock relating to chips during the original assessment stage, the Assessing Officer could be said to have a reasonable belief as spoken of in section 147(a) and had, therefore, the jurisdiction to initiate proceedings under that section. The proc....