TMI Blog2023 (7) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... ring on the outcome of the relevant assessment order. Section 147 does not allow the re-assessment of an income merely because of the fact that the assessing officer has a change of opinion with regard to the interpretation of law differently on the facts that were well within his knowledge even at the time of assessment. Doing so would have the effect of giving the AO the power of review and section 147 confers the power to re-assess and not the power to review. Thus reopening under section 147 is nothing but based on changed of opinion on same set of facts, which is not valid. Thus, the action of reopening of assessment is set aside. Decided in favour of assessee. - ITA No.158/SRT/2023 - - - Dated:- 18-7-2023 - Shri Pawan Singh, Judicial Member For the Assessee : Shri Sudhir Surana, CA And Shri Om Prakash Soni, CA For the Revenue : Shri Vinod Kumar, Sr-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as Ld. NFAC/Ld.CIT(A) ] dated 13.01.2023 for assessment year 2013-14, which in turn arises from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assessing Officer recorded that the assessee filed his reply dated 16.11.2018. The contents of reply are recorded in para-4 of assessment order. The assessee in his reply, submitted that assessee was having a capital balance of Rs. 41.80 lakhs, out of which, assessee has a fixed capital investment of Rs. 22.05 lakhs and liquid capital of Rs. 19.75 lakhs at the same time. The assessee has made investment in the firm of Rs. 76.11 lakhs. The assessee borrowed money from his friends and relatives in his personal capacity and infused said fund in Rama International. The assessee made payment of interest of Rs. 6,49,951/- on the borrowed fund and claimed deduction under section 57(iii) against the profit of the firm shown in the income from the business and profession. The assessee submitted that interest expenses were claimed for commercial expediency and money was borrowed to infuse fund in proprietary concern for purpose of earning income and expenses have been incurred wholly and exclusively for the purpose of earning interest income were not incurred for personal purposes nor the same was capital in nature. The expenses were incurred in the same accounting year also and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded itself proved that facts were well within the knowledge of Assessing Officer during original assessment. Hence, re-assessment proceeding is nothing but change of opinion. To support such submission, assessee relied upon the decision of Hon'ble Apex Court in the case of ITO Vs Tech Span (P.) Ltd. (2018) 404 ITR 10 (SC). On the merits of addition on account of disallowance of interest expenses, the assessee made similar submission as made before Assessing Officer. To support his submission, he relied upon the decision of Hon'ble Apex Court in the case of Commissioner of Incometax vs. Rajendra Prasad Moody (1978) 115 ITR 519 (SC), and decision of Hon'ble jurisdictional High Court in the case of Micro Inks Ltd., vs. PCIT (2017) 85 taxmann.com 310 (Guj) and various other case law. 5. The Ld. CIT(A) after considering the submission of assessee on validity of re-opening held that Assessing Officer in para-8 of reasons recorded for re-opening of the case that four years of end of relevant assessment year has not expired in this case. Thus, the requirement of having reason to believe that income has escaped assessment have been duly recorded. The Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion. In the original assessment deduction was allowed on the same set of fact and even in the excess deduction was allowed will be changed of opinion. Therefore, re- assessment was held to be bad-in-law as has been held in the case of Tech Span (P.) Ltd. (supra). The Ld. AR for the assessee further submits that the Assessing Officer has no power to review but to re-assess the assessment was based on fulfilled of certain conditions, if the concept of change of opinion is removed then in the grab of re-opening assessment, review would take place as has been held in CIT, Delhi vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC). On the merit of addition, the Ld. AR for the assessee retreated that assessee has claimed interest expense of Rs. 6,49,951/- under section 57(iii) as assessee borrowed money of his personal capacity and infused the said fund in his proprietorship Firm Rama International and claimed deduction under section 57(iii) for interest expenses. The Ld. AR for the assessee repeated in all submission as made before NFAC/Ld. CIT(A). 8. On the other hand, Ld. Sr-DR for the Revenue supported the order of lower authorities and submits that on the validity of re-opening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 20,773/- under the head income from other sources against which assessee has claimed deduction of interest of Rs. 6,49,951/- and paid to other parties. The assessee has claimed interest expense of Rs. 15.42 lakh in his profit and loss account. Thus, further amount of Rs. 6,49,951/- was not justified. I find that all such facts and figures were available at the time of original assessment, on the basis of which, Assessing Officer recorded reasons of re-opening. No addition was made by the assessing officer during original assessment initiated and completed under section 143(3). The assessing officer has not recorded that any new or tangible material came to his notice or that escapement of such income was result of not disclosing all the material fully and truly at the time of assessment. 10. The Hon ble Supreme Court in ITO Vs Tech Span India (P) Limited (supra) held that the language of section 147 makes it clear that the assessing Officer certainly has the power to re-assess any income which has escaped assessment for any assessment year subject to the provisions of sections 148 to 153. However, the use of this power is conditional upon the fact that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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