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2006 (11) TMI 165 - HC - Income TaxChallenged the initiation of proceedings u/s 147 - notice issued u/s 148 - escaped assessment - Time limit for notice u/s 149 - dedution u/s 80HHC - export profits - HELD THAT:- On the basis of materials which were there with the concerned authorities at the material time, when the assessment order was passed, a decision has now been taken to disallow certain expenses, deduction of which had earlier been allowed. In the case of India Steamship Co. Ltd. v. Joint CIT [2005 (2) TMI 46 - CALCUTTA HIGH COURT], this court held that assessment could not be reopened by reason of mere change of opinion of the assessing authority on the same facts. The same view has been taken by this court in the case of Mercury Travels Ltd. v. Deputy CIT [2002 (9) TMI 95 - CALCUTTA HIGH COURT]. In this case too, the assessing authority has purported to reopen the assessment upon change of opinion on the same facts. Significantly, the Revenue has in its affidavit-in-opposition purported to take yet another ground, that is, benefit of section 80HHC could not be allowed unless export sale proceeds were received in convertible foreign exchange. As rightly pointed out on behalf of the petitioner by Mr. Bajoria there could be no question of the deduction of export profits being allowed in the first place, unless the petitioners had been able to demonstrate that the sale proceeds were received in convertible foreign exchange. It was never the case of the Revenue, not even at the time of reopening of the assessment, that the proceeds were not received in convertible foreign exchange. In any case, it is well-established that the Revenue cannot by way of affidavit improve upon reasons initially disclosed for reopening of the assessment. As held by a Division Bench of the Bombay High Court in the case of Hindustan Lever Ltd. [2004 (2) TMI 41 - BOMBAY HIGH COURT] reasons recorded by the assessing authority cannot be supplemented or substituted either by affidavit or by oral arguments. The writ application is, therefore, allowed. The impugned notice is set aside and quashed.
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