the Appellate Tribunal was right in holding that the second reassessment proceedings were not validly initiated and thereby quashing the reassessment proceedings-the proceedings initiated by the AO for the second time under Section 147 is barred by limitation-even the proviso to Section 147 does not come into play on the facts of the case-AIT-2010-373-HC Even if the goods belong to same entry, manufacture does take place if new identifiable/marketable goods known in market emerge due to operation conducted-the process of ironing applied to the stiched brassieres prior to their packing was a process incidental to the completion of the brassieres as a manufactured product-process of purification and filtration being incidental or ancillary to the manufacture of a marketable product, the Respondent was entitled to Modvat credit on the inputs involved-AIT-2010-370-HC Larger Bench of CESTAT rules the Tribunal has ample power to condone the delay in filing the appeal including the one filed under section 35 E (4)-AIT-2010-372-CESTAT Corruption in IRS takes its toll-Deputy Commissioner of Income Tax Dhananjay Kumar arrested by CBI in Mumbai-Joint Commissioner of Customs & Excise Hemant Kothikar also arrested by CBI FM directs expediting of Cadre Restructuring in CBDT & CBEC Tariff Value for import of Brass Scrap is 3924-Customs Non-Tariff Notification No. 78 Chief Justice of Gauhati High Court Justice Ranjan Gogoi to be Chief Justice of Punjab & Haryana High Court Anti-dumping duty on imports of Acrylic Fibre originating in, or exported from Japan and Belarus-Customs Tariff Notification No.85 Prescribing SION for new product “Propylene” under Chemical & Allied Products Group-DGFT PN 7 Inclusion of Finished Leather in the Focus Product Scheme of FTP-DGFT PN 6 Exchange Rate for imported goods is Rs 47.25 per US Dollar and Rs 60.35 per EURO-Exchange Rate for export goods is Rs 46.30 per US Dollar and Rs 58.70 per EURO-Customs Non-Tariff Notification No. 77-Click on Exchange Rate for details Anti Dumping Duty under the Notification No.15/2007 is not applicable to Spandex Yarn (Elastomeric yarn)-Customs Circular No.30 Import of goods under Notification No.13/2010 for Commonwealth Games, 2010-Customs Circular No.31 Larger Bench of CESTAT rules charges towards pre-delivery inspection and after-sale-service by dealers from buyers of the cars to be included in the assessable value of cars for payment of excise duty-AIT-2010-366-CESTAT merely because there was non accounting of goods, penalty was technical and inference of clandestine removal was not called for-AIT-2010-365-HC ITAT rules provision for doubtful debts and provision for standard debts are to be taken into consideration for computation of book profit u/s. 115JB of the IT Act-AIT-2010-361-ITAT HC rules slitting of aluminum foils into customized width, mounting the same on the printing machine and thereafter printing the necessary text thereon is covered for 80IB benefit as it falls within the ambit of the term “produce”-AIT-2010-363-HC Definitive Anti-dumping duty imposed on imports of Coumarin, originating in, or exported from China-Customs Tariff Notification No. 82 Special Bench of ITAT Ruling-where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract-AIT-2010-355-ITAT-SB

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Special Bench rules on scope of 158BB(1)

AIT News Network
NEW DELHI. Vide a recent ruling AIT-2006-238-ITAT-SB; Special Bench of ITAT has laid down the law on the following contentious issue referred to it :

“What is the meaning and scope of phraseology, “Such other materials or information as are available with the Assessing Officer and relatable to such evidence” appearing in section 158BB(1) of the Act as substituted by the Finance Act, 2002 with retrospective effect from 1.7.1995.”

T H E R U L I N G:

In our humble opinion there should be, in the first instance, an “evidence” found as a result of search or requisition of books of accounts or other documents that may constitute the basis of computation of undisclosed income. That “evidence” may not be conclusive to arrive at the finding of undisclosed income and the Assessing Officer may supplement it with “materials” or “information” that he may gather or are otherwise available with him at the time of computation of undisclosed income of the block period. The expression “relatable” appearing in section 158BB(1) permits the Assessing Officer to bring material on record as may be required for computation of undisclosed income in relation to “evidence” found as a result of search. All materials or information gathered by the Assessing Officer or received by the Assessing Officer in the process of computation of undisclosed income on the basis of “evidence” would constitute materials or information “relatable to such evidence”. For example, if during the course of the search an evidence is found to the effect that the assessee had income from a source not disclosed by the assessee, all further materials or information gathered by the Assessing Officer in regard to that source of income and for quantification of the assessee’s income from that source would constitute materials or information relatable to such evidence. Similarly, if for example, during the course of search an evidence is found as to inflation of a particular item of expenditure, the materials or information subsequently gathered by the Assessing Officer in order to find out the other instances of inflation of expenditure would be materials or information relatable to such evidence. In other words, if during the course of search only a part or portion of picture is seen, the material or information gathered by the Assessing Officer to reasonably reconstruct the whole picture would be materials or information relatable to such evidence. It, therefore, follows that while it is not open to the Assessing Officer to investigate new items of undisclosed income, he is entitled to collect further materials or information so as to bring to the logical conclusion evidence found as a result of search. The expression “materials” or “information” are of wider import than “evidence” and as far as the admissibility of such materials and information is concerned, there is no distinction to be drawn between the assessment under the regular provisions of the Act and block assessment. The burden of proof, however, on the Assessing Officer may be greater in block assessment proceedings than in regular assessment proceedings, in view of the fact that while regular assessment is made of income, block assessment is made of undisclosed income. While completing the block assessment the Assessing Officer can include in his computation of undisclosed income only that undisclosed income that the assessee did not disclose in any income-tax proceedings the assessee was bound to do so or the income that the assessee would not have disclosed in the normal course if there was no search. While relying upon any materials or information as a supplement to the evidence found as a result of the search the Assessing Officer is not bound by technical rules of evidence and, therefore, he may take into account facts and circumstances that may not be admissible under Indian Evidence Act and he may arrive at his finding not on the basis of any direct evidence of undisclosed income but on the basis of cumulative effect of all the facts and circumstances relating to the proceedings before him.

( Click here for full Text of ruling AIT-2006-238-ITAT )