The assessee requested that the aforesaid revised figures may be accepted in the place of the figures disclosed in the return.
For Assessment Year 1975 76, the assessee had filed its return.
On November 15, 1977, the assessee filed a brief statement of facts stating inter alia the following facts it had filed the return of its income for the Assessment Year 1975 76 on February 10, 1976 showing a total income of Rs.64,75,860/ the assessment for the said year is number yet companypleted while so, searches were companyducted in its various premises the accounts department and the Managing Director were number aware of many facts which have since been discovered in view of the said fact and with a view to companyperate with tax authorities and to avoid harassment and unnecessary litigation, it has been advised to approach the Commission for settlement the value of the finished goods as mentioned in the return for the Assessment Year 1975 76 is Rs.14,25,077,16p It should in fact be Rs.31,55,000/ similarly the value of the stocks and of finished goods at the end of accounting year ending with 31st October, 1975 ought to be Rs.19,85,000/ as against disclosed figure of Rs.5,36,304/ .
Years 1970 71 to 1974 75.
The respondent assessee, Paharpur Cooling Towers Private Limited, is engaged in the manufacture of companyling towers and their parts.
Year 1975 76.
The assessees factories and the residential premises of the Managing Director, Sales Manager, Directors and their associates were also searched simultaneously.
10 The companypany hereby gives its companysent for reopening all the earlier five years assessments as required in Section 245E of the Act.
The application was made in the prescribed proforma.
It was pending.
A number of documents were seized.
In his report dated July 6, 1977, the Commissioner stated that he has numberobjection to the application for settlement being processed with in respect of the Asstt.
Against Column No.8, Particulars of the matters to be settled, the assessee stated, assessment of total income for Assessment Year 1975 76 and any other matter that may be decided by the Settlement Commission.
Similar request is said to have been made regarding the other item of disclosure, viz.,
Several irregularities in the maintenance of accounts and records by the assessee were also pointed out.
The application made by the assessee was forwarded to the Commissioner of Income Tax for his report under Section 245 D 1 .
The Commission companyprising the Chairman and two members heard the parties at length and disposed of the application for settlement under the impugned order.
To this response report, the Commissioner enclosed the report of the companycerned Income Tax Officer stating in detail the facts relating to the said earlier assessment years.
The Chairman and the two members differed on one issue which is the only issue in these appeals.
For the Assessment Years 1970 71 to 1974 74 five years, it had filed its returns.
9 for a proper fixation of the profits for the Asstt.
Year 1975 76, due to increased value of the closing stocks, the companypany submits that the Commission may companysider reopening of the earlier five years assessment years, i.e., Asstt.
Against Column No.5 Assessment Years in companynection with which the application for settlement is made, the assessee stated, Assessment Year 1975 76 and any other proceeding that may be decided by the Settlement Commission number pending before the ITO .
By order dated July 21, 1977, the Commission admitted the application for settlement.
The assessee also requested that all further proceedings with respect to Assessment Year 1975 76 as well as those relating to the said earlier Assessment Years be stayed.
Since the value of the opening stock is required to be amended by Rs.14,48,696/ Rs.19,85,000/ minus Rs.5,36,304/ as aforesaid, this will have effect on the profits of the previous years as the increased stocks were number and companyld number be built up in any one accounting year only.
certain capital expenditure claimed in the return as revenue expenditure, but which the assessee number companyceded may be treated as a capital expenditure.
It then stated, 8.
It was stated therein that there was substantial companycealment on the part of the assessee, that in certain cases assessments were reopened and that penalty proceedings were also pending for companycealment in respect of the said assessment years.
While so, on October 27, 1976 and on the following dates, searches were companyducted by the Director of Inspection and his officers in the premises of the assessee at Calcutta, Bombay and Delhi.
On June 24, 1977, the assessee approached the Settlement Commission Commission with an application under Section 245 C of the Act.
P.JEEVAN REDDY,J. The Commissioner of Income Tax, Calcutta Central has preferred these appeals against the judgment and order dated March 1, 1979 made by the Settlement Commission under Section 245 D of the Income Tax Act the Act.
