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2014 (2) TMI 1220 - HC - Income TaxReopening of assessment - disallowance of development expenses - Held that:- In the present case, apparent it is that all the facts relating to the debited expenses of ₹ 87,35,400 on account of development expenses were stated in the P&L a/c wherein, a sum of ₹ 35,00,000 was taken to the balance-sheet as provision for project development. All the facts were definitely available before the AO at the time of framing of the original assessment order. A look at the reasons recorded by the AO for the purpose of reopening makes it clear that the observations were made as if the successor AO was sitting in appeal over the original assessment order dt. 19th Dec, 2008; and it was sought to be suggested as to what was meant by a 'known liability' and as to whether the provision made on the basis of the quotations would qualify for liability or not. If was suggested that this amount, being not an expenditure, should have been added to the total income. It was further suggested that ₹ 33,48,915 was debited to the registration and stamp charges and sale of plot though registration charges are generally borne by the purchaser and not by the seller. Hence, according to the AO, these expenses were wrongly claimed by the assessee. Evidently, all the observations by the successor AO were only of the expression of another opinion on the same set of facts. In the given circumstances, the Tribunal cannot be faulted in finding that the reassessment was based only on change of opinion and hence, unsustainable. - Decided in favour of assessee.
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