1983 (11) TMI 19

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.... set up in terms of the industrial licences granted to the petitioner by the Union of India under the provisions of the Industries (Development and Regulation) Act, 1951 (hereinafter referred to as " the IDR Act "). The petitioner had applied to the Central Government for grant of an industrial licence under the IDR Act for setting up a plant for the manufacture of 1.6 million lbs. of nylon/perlon per annum. The Central Government, in exercise of the powers conferred by rule 15(2) of the Registration and Licensing of Industrial Undertaking Rules, 1952, granted a conditional industrial licence dated February 12, 1960, to the petitioner to effect substantial expansion of its undertaking. The petitioner did not pay any consideration for acquis....

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....he relevant assessment year 1967-68 on December 15, 1967, showing a total income of Rs.7,07,79,465. At the stage of the regular assessment, the petitioner had disclosed all the primary and material facts relating to the assessment for the said assessment year. By an order of assessment dated November 30, 1971, under s. 143(3) of the I.T. Act, 1961, the regular assessment of the petitioner was completed and the total income was determined at Rs. 7,41,30,864. The total income was reduced in an appeal preferred by the petitioner, but it is not necessary to make any reference to those proceedings. Respondent No. 1-Income-tax Officer, Central Circle I, Range I, Bombay-issued notice dated February 26, 1975, under s. 148 of the I.T. Act, 1961, ....

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....assessment for the relevant assessment year for the transfer of the industrial licence dated February, 1960, to Century Enka Limited in August, 1966. The petitioner sent its reply, but respondent No. 1 by order dated March 12, 1979, made under s. 143(3) read with ss. 144B and 147(a) of the I.T. Act, 1961, negatived the petitioner's contention and proposed to make an addition of Rs. 1,55,90,000 to the petitioner's total income. The (draft) order was served on the petitioner on March 22, 1979, and the petitioner thereafter lodged its objections. Thereupon respondent No. 1 forwarded the order along with the objections to respondent No. 2 the Inspecting Assistant Commissioner of Income-tax, Central, Range I, Bombay as required by s. 144B(4) of ....

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.... licence in spite of the market value of the said licence being substantial on the date of transfer, the provisions of s. 52(2) of the I.T. Act, 1961, are clearly attracted. Respondent No. 1 assessed the value of the licence at Rs. 1,55,90,000 and applying the provisions of the said s. 52(2) recomputed the total income of the assessee after including the capital gains at Rs. 8,90,35,540. Shri Mehta is right in his submission that the petitioner had not transferred the licence in favour of Century Enka Limited but had surrendered the same to the Government and the endorsement of the licence clearly indicates that it was not a transaction of transfer from the petitioner to Century Enka Limited and, therefore, the provisions of the said s. 52(....

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.... of capital asset, and, secondly, the consideration for such transfer must be understated by the assessee. In my judgment, both these conditions are absent in the present case and, therefore, the action of the ITO in reopening the assessment was clearly erroneous. Respondent No. 1 had also no jurisdiction to reopen the assessment, as the petitioner was not guilty of any understatement or deliberate suppression of any relevant facts. In these circumstances, the order of respondent No. 1 cannot be sustained. Shri Joshi, learned counsel appearing on behalf of the Revenue, raised a preliminary objection to the maintainability of the petition on the ground that the notice under s. 142 of the I.T. Act, 1961, was issued by respondent No. 1 on F....