1.  M/s BHARAT HEAVY ELECTRICALS LTD vs. DEPUTY COMMISSIONER OF INCOME TAX, ITA Nos. 1833 & 1834/ Del./ 2006 Assessment Years: 1997-98 & 98-99, DATE OF ORDER : 11TH MARCH 2011, ITAT – Delhi

Non-compliance with the first proviso to section 147, therefore, renders the reopening of a completed assessment in the absence of any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year, void ab initio. Moreover, in the present case, as discussed hereinabove, not even an allegation of such failure has been made against the assessee company by the AO for either of the assessment years involved. Reliance by the assessee on Indian Farmers Fertilizers Coop. Ltd. (supra) is apt. Therein, it has been held that where in the reasons recorded in reopening, there was no allegation that the assessee had failed to disclose fully or truly all material facts necessary for its assessment, the AO was unjustified in taking action u/s 147/148 after the expiry of four years from the end of the respective relevant assessment year.

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2.  VARDHAMAN AND HIRANANDANI DEVELOPERS Vs INCOME TAX OFFICER, Assessment Year 2007-08, ITA No. 6455/ Mum/ 2010, DATE OF ORDER : 28TH FEB. 2011, ITAT – Mumbai

Whether cessation of the liability in the trading account is to be considered to be income of the assesse?

Yes.

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