TMI Blog2019 (1) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... ting escapement of income, which came into the notice of AO subsequent to completion of assessment proceedings. Specific question as to allocation of expenses were raised against the assessee during original assessment proceedings which were duly addressed by the assessee with supporting details / workings. This is further fortified by the fact that the adjustment of speculation loss was incorporate during rectification proceedings upon being pointed out by the assessee himself. These facts have already been noted by first appellate authority which could not be controverted by revenue in any manner. No hesitation in upholding that the reassessment proceedings were bad in law and the lower authorities could not be permitted to review the already concluded matter. So far as the merits of the case are concerned, we find that the assessee had already allocated the expenditure between share trading activity and brokerage business on a reasonable basis. It emanates from the records that the assessee had allocated administrative expenditure aggregating to ₹ 24.67 Crores i.e. ₹ 2.63 Crores against trading in shares and ₹ 22.03 Crores against derivative trading as again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31/10/2007 at ₹ 120.41 Crores which was later revised on 31/03/2009 at ₹ 137.48 Crores to disallow speculation loss of ₹ 17.06 Crores. The same was finally assessed at ₹ 148.27 Crores pursuant to rectification u/s 154 and after giving effect to the order of first appellate authority. In the original assessment proceedings, the assessee was granted a rebate of tax u/s 88E amounting to ₹ 30.21 Crores, being Securities Transaction Tax [STT] paid by the assessee while dealing in shares. The amount of ₹ 30.21 Crores paid by the assessee is not under dispute since the same is duly supported by prescribed two form 10DB both dated 29/10/2007, the copies of which have been placed on record. 2.3 Subsequently, the assessee was subjected to reassessment proceedings vide issuance of notice u/s 148 dated 21/03/2014, the relevant part of which read as follows: - The assessee company has filed its original return of income on 31.10.2007 declaring total income at ₹ 120,41,92,590/-. The return was revised on 31.03.2009 revising total income at ₹ 137,48,89;098/-. The assessment was completed u/s. 143(3) on 14.12.2009. The income was assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 10/10/2016 and submitted that the facts recorded by Ld. AO were factually incorrect since the expenses were properly allocated by the assessee between the two activities and the same were duly examined during original assessment proceedings. The working of the speculation loss as arrived at by the assessee was provided which has already been extracted on page-5 of the impugned order. It was further submitted that the speculation loss as reversed by the assessee in revised return was omitted to be disallowed in the original assessment order passed by Ld.AO and the same was incorporated upon being brought to the attention by the assessee itself and therefore, the facts relating to speculation loss were already considered by Ld. AO not only during original proceedings but also during rectification proceedings u/s 154. The attention was also drawn to the fact that the details of speculation loss and expenses allocated toward the same was specifically called from the assessee during original assessment proceedings which were duly replied to by the assessee along with complete supporting documents and workings and therefore, there was no failure on the part of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd including documents placed in the paper-book and judicial pronouncements cited before us. Since the assessee s cross objection raises a pertinent issue of validity of reassessment proceedings, which goes to the root of the matter, we take up the same first. It is undisputed fact that the assessee was assessed u/s 143(3) and the reassessment proceedings were initiated beyond 4 years from the end of relevant AY. In such a scenario, the pre-conditions to invoke the reassessment proceedings u/s 147 was that the Ld. AO had reasons to believe that certain income escaped assessment and such escapement has occurred due to failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. So far as the formation of reasons is concerned, it is undisputed fact that no tangible material came into the possession of Ld. AO which suggested any escapement of income against the assessee the belief was based on same set of material which was available before Ld. AO during original assessment proceedings. It is trite law that Ld. AO has the power to re-assess but no power to review. Review in the garb of re-assessment was not permissible. This lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advertently excluded from consideration. This will, in our opinion, amount to opening of the assessment merely because there is change of opinion. The Full Bench of the Delhi High Court in its judgment in the case of Kelvinator [2002] 256 ITR 1 referred to above, has taken a clear view that reopening of assessment under Section 147 merely because there is a change of opinion cannot be allowed. In our opinion, therefore, in the present case also, it was not permissible for respondent No. 1 to issue notice under Section 148. The revenue is unable to point out any tangible material suggesting escapement of income, which came into the notice of Ld. AO subsequent to completion of assessment proceedings. So far as the assessee s conduct is concerned, we find that specific question as to allocation of expenses were raised against the assessee during original assessment proceedings which were duly addressed by the assessee with supporting details / workings. This is further fortified by the fact that the adjustment of speculation loss was incorporate during rectification proceedings upon being pointed out by the assessee himself. These facts have already been noted by first appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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