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2010 (10) TMI 814 - AT - Income TaxReopening of assessment - Business income Vs. House property - Time barred - Penalty - Held that:- Section 147 authorizes the AO to assess or reassess income chargeable to tax, when, he has reason to believe that income for any assessment year has escaped assessment. In the instant case, the observation of the AO to the effect that by claiming the returned income under wrong head, the assessee has claimed excess depreciation, which is not permissible in case of income is assessable under the head "Income from House property". This is a sufficient reason to believe that income of the assessee has escaped assessment, which is sufficient to empower the AO to reopen the assessment by issue of notice u/s 148. No infirmity in the order of the CIT(A) for confirming the action of the AO for reopening the assessment when the same was made with reference to intimation passed u/s 143(1) as AO is free to initiate proceedings u/s 147 and failure to take steps u/s 143(3) will not render the AO powerless to initiate reassessment proceedings even when intimation u/s 143(1) had been issued. Leave and licence income - chargeable under the head "Income from house property " OR "Business income" - Held that:- Following the latest decision of Commissioner Of Income-Tax Versus Shambhu Investment Pvt. Ltd. [2001 (3) TMI 77 - CALCUTTA High Court] proposition of law laid down therein are applicable to the facts of instant case, confirming the action of the CIT(A) for taxing the rental income as "income from house property". Regarding interest u/s 234D - Held that:- No interest is chargeable u/s 234D prior to the assessment year 2004-05 Regarding Penalty - AO has initiated penalty proceedings for the income escaped assessment due to taxing of rental income as income from house property - since no penalty has been levied and it was just initiation, no interference is required by the Tribunal at this juncture - Appeals are allowed
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