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2011 (10) TMI 498 - AT - Income TaxRe opening of assessment - sale of investments (total income) which is inclusive of dividend income; interest income and other income are to be classified under "Income from other sources" & treated separately for tax purpose - Non set-off of business loss against Capital Gain - reopening based on Objection raised by audit party - Held That:- AO nowhere observed that the income of the assessee escaped assessment. It is not the case of the AO that the assessee had not fully disclosed all the material facts relating to the income. When the AO framed the original assessment vide order dated 30.12.2005, all the relevant documents relating to the income or losses of the assessee were available to the AO, so it cannot be said that the AO had not applied his mind while framing the original assessment vide order dated 30.12.2005. It is also noticed from the computation of total income that the assessee clearly disclosed the capital gains of Rs. 49,44,07,583/-and business loss of Rs. 73,92,785/-. The return of income filed by the assessee was earlier processed u/s. 143(1) on 8.3.2004, thereafter notice u/s. 143(2) was issued on 15.4.2004 and the AO mentioned that the assessee furnished the details called for and after examining the information filed and discussing the case, assessment was completed. So it cannot be said that the AO did not apply his mind while framing the assessment u/s. 143(3). Thus as assuming there was some mistake in the assessment order dated 30.12.05 and income if any had been taken under a wrong head, that mistake could have been rectified by issuing notice u/s. 154, however the reopening of the assessment by issuing the notice u/s. 148 could have been done only when there was escapement of income. Another objection taken by the AO that the assessee had not set off business loss against the capital gains, which is contrary to the provisions of the Act is totally wrong because the assessee had set off the business loss against the income from capital gain and the provisions contained in section 71(2) which clearly stipulates that the loss must be set off against the income, if any, assessable for that assessment year under any head of income including the head 'capital gains', whether short term capital gain or long term capital gain. The view in respect of dividend income and interest income which were treated as business income was in consonance with the view taken in the preceding as well as succeeding year wherein the assessment was also framed u/s. 143(3). Secondly, the reopening was made on the basis of objection of the audit party and no independent application of mind was there by the AO. Thus notice issued u/s. 148 for reopening the assessment in the present case was not justified. A mere change of opinion is not sufficient to issue notice u/s. 148 for reassessing the income by invoking the provisions of section 147 - Decided against revenue.
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