Itxa/6995/2010 Of The Commissioner Of Income Tax -1 Mumbai v. Securities Trading Corporation

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.6995 OF 2010 The Commissioner of Income Tax-1, Mumbai ..Appellant. V/s. Securities Trading Corporation of India Ltd...Respondent. Mr. Vimal Gupta, senior Advocate with Ms. Padma Divakar for the appellant. Mr. Nishant Thakkar i/b. Mint & Conferes for the respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ.DATED : 14TH JANUARY, 2013 P.C. :- 1.In this appeal filed by the revenue relating to assessment yesr 2002-03, the following questions of law is proposed for our consideration:- “ Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in quashing the reassessment proceedings initiated within four years from the end of the relevant previous assessment year, on the ground that there was no fresh tangible material before the assessing officer to re-open the assessment ? ” 2.The respondent-assessee is a primary dealer in Government securities registered with Reserve Bank of India. For the asssessment year 2002-03, the respondent-assessee was assessed to an income of Rs.316 crores under Section 143(3) of the Income Tax Act, 1961 ('the Act'). 3.On 8[th] March, 2007, a notice under Section 148 of the Act has been issued to the respondent-assessee for reopening the assessment for the assessment year 2002-03 on the ground that income had escaped assessment as the method of valuation of the closing stock was varied from the earlier years. This change in method of valuation of closing stock resulted in lower valuation of the closing stock by an amount of Rs.1.05 crores resulting in escapement of income from assessment. The assessing officer by his order dated 30[th] November, 2007 enhanced the income by Rs.1.05 crores and assessed the respondent-assessee to an income of Rs.317 crores. 3.In the first appeal, the Commissioner of Income Tax (A) upheld the addition. In the second appeal, the Tribunal by order dated 30[th] April, 2010 while allowing the appeal of the respondent -assessee, observed that though the reopening of assessment was within four years, yet the same did not warrant reassessment as the same was being done only on account of mere change of opinion. This is because the respondent-assessee in its accounts filed for the assessment year 2002-03 had disclosed the mode of valuation of stock and further the reopening proceedings had been initiated on an audit objection. In view of the above, no fault can be found with the order of the Tribunal dated 30[th] April, 2010. Besides, it is pertinent to note that the entire amount of Rs.1.05 crores, on account of undervaluation of the closing stock has been offered to tax in the subsequent year as the unit undervalued had been redeemed in the subsequent year. This was accepted by the department. 4.In view of the above, we see no reason to entertain the proposed question of law. Accordingly, the appeal is dismissed with no order as to costs. (M.S. SANKLECHA, J.) (J.P. DEVADHAR, J.)