TaxTMI 
TaxTMI 
1991 (2) TMI 163
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....btained payments in respect of spare parts shown to have been sold to State Transport Corporation (STC) during the period between 25-10-1962 and 24-4-1965 in respect of which actual delivery had never been given by the assessee and that no contract for supply of such goods had been entered into by the STC with the assessee and that the total payments made in the above transactions came to Rs. 1,23,069 covered by 118 bills. The amount for the accounting year relevant to assessment year 1964-65 came to Rs. 39,358 comprising of 46 bills issued between 29-10-1962 and 17-10-1963. As the assessee had failed to incorporate the undelivered goods to the STC in its closing stock it was inferred that such goods had been sold outside the books of accou....
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....ctually delivered. The Income-tax Officer noticed that those goods had not been shown in closing stock and as such there was a presumption that they had been sold outside the books of accounts. The assessee was not prepared to say anything in the matter. The ITO made addition of Rs. 39,358 which pertained to relevant accounting year. 5. The assessee filed appeal before the AAC and the first submission made by the assessee was that reopening under section 147(a) was not justified. The AAC rejected the said submission. He observed that although the fraud had taken place earlier and that the criminal and civil proceedings against the assessee had commenced earlier, the Income-tax Officer was not aware of the correct facts at the time when the....
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....assessment year 1964-65. Thus, it was beyond the power of the Department to produce at the time of hearing of the appeal before the Tribunal. The reasons recorded for reopening the assessment. 7. The learned counsel for the assessee submitted that since the Department is not able to produce the reasons on account of the fact that the reasons had been destroyed as a result of fire, it should be held that reopening was bad in law. This submission cannot be accepted. During the proceedings before the Income-tax Officer or before the AAC the assessee had never called upon the Department to produce the original file recording the reasons for reopening. The reasons for reopening had been incorporated in the reassessment order itself. At page 9 o....
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....of accounts were in the court and those books of accounts were called from the court. The ITO examined the books of accounts and found that G.P. shown by the assessee was less and as such he made addition on that account. The assessment order does not indicate that the fact that the assessee had received payment of price in respect of goods which were never supplied to STC had come to the notice of the ITO. Since those facts had never come to the notice of the ITO before he completed the assessment for assessment year 1964-65, the reopening of assessment would be fully justified. No inference that ITO had come to know about those facts could be drawn from the mere fact that the account books had been called from the court. No material has b....
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....uld have in the original assessment proceedings, found out the correct position by further probing did not exonerate the assessee from the duty to make a full and true disclosure of material facts. It was also observed that the obligation of the assessee was to disclose primary facts and that if some material for the assessment lay embedded in the evidence which the Revenue could have incorporated but did not, then it is the duty of the assessee to bring it to the notice of the assessing authority. This is because the assessee knows all the material and relevant facts while the assessing authority might not know all material and relevant facts. It was further observed that in respect of the failure to disclose, the omission to disclose migh....