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2016 (1) TMI 1464 - ITAT HYDERABADReopening of assessment u/s 147 - assessee had PE in India - HELD THAT:- AO had completed the original assessment u/s 143(3) of the Act after considering all the materials submitted by the assessee. Later, the AO reopened the assessment u/s 147 relying on the same materials submitted by the assessee. There was no fresh material or any information which gives the impression that the income of the assessee has escaped assessment. The initiation of reassessment proceedings u/s 147 on the basis of the same material on record and holding there was escapement of income as the income arose from transfer of the asset is to be assessed as ‘business income’ is on change of opinion. It was held in the case of Phool Chand Bajranglal [1993 (7) TMI 1 - SUPREME COURT] where the AO comes into possession of fresh information or new facts, which lead him to form a reasonable belief that income has escaped assessment, he can reopen the assessment. In the present case, AO had not found any fresh information nor new facts. Also held in the case of Tractbel Industry Engg. Vs. Asst. DIT [2011 (1) TMI 1470 - DELHI HIGH COURT], during the course of original assessment proceedings, the assessee was called upon to give information and details regarding the nature of business activities in India, it was stated in the letter that the assessee does not have any PE in India. AO in original assessment accepted the contention of assessee. Reassessment on the ground that the assessee had PE in India on the same facts was held to be not justified and liable to be quashed. In the present case also, the AO had accepted the contention of assessee i.e. treating the income as ‘capital gains’ and the source of income was reassessed and intended to treat the income as business income. It clearly establishes that the AO has changed his opinion, therefore, the reopening of assessment deserves to be quashed.
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