Brief of the case:
The ITAT Ahmedabad in the case of Waves Food Private Limited vs. DCIT held that reopening of assessment to disallow provision for damaged goods returned is not valid as the issue had been specifically dealt by AO during the course of regular assessment and such disallowance by reopening the assessment is nothing but mere change opinion which cannot be reason for reopening the assessment.
Facts of the case:
- The assessee company filed its return on 31.10.2005 declaring nil income and the regular assessment of the assessee was framed after making one disallowance regarding non-deduction of tax at source.
- Subsequently, the case of assessee was reopened by issuing notice dated 23.12.2008.The reasons recorded for reopening assessment was that assessee had made provision on claiming D.G.R. in profit and loss account of Rs.1,00,59,941/- as contingent liability which had been disallowed by ITAT Ahmedabad in the case of Rasna Ltd. which is sister concern of the assessee group.
- The assessee made an appeal challenging validity of re-opening as well as disallowance of provision in respect of damaged goods liability.
- The appeal of the assessee was dismissed by CIT(A) , aggrieved by the same assessee filed an appeal before ITAT.
Contention of the Assessee:
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