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2014 (5) TMI 402 - HC - Income TaxValidity of re-opening of assessment u/s 148 of the Act – Doctrine of merger - Held that:- The AO had examined the assessee’s claim of deduction of the entire expenditure - the CIT (A) and the Tribunal committed no error in quashing the reassessment proceedings - When the Revenue had carried the issue in appeal and the same was pending before the Tribunal, it would reflect the Revenue’s opinion that the expenditure was capital and not revenue in nature - If that be so, the Assessing Officer’s premise that the same was required to be taxed as an expenditure not accrued during the relevant period would be incongruent - His entire belief that the income chargeable to tax had escaped assessment on such basis thus would be lacking in validity - once the AO taxed the income and the entire issue was placed before the CIT (A) – AO’s attempt to change the reasons for disallowance, once the CIT (A) reversed his order of assessment, would thus be a mere change of opinion. The assessment order in respect of the items for which assessment is sought to be reopened has merged with the order of Commissioner (Appeals) and as such has no independent existence and therefore the assessment could not be reopened in respect of the items – the reopening of assessment apart from being based on a factually erroneous premise, is also based upon a mere change of opinion without there being any tangible material to come to the conclusion that there is escapement of income from assessment – Relying upon Commissioner of Income-tax v. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] - the condition precedent for reopening of assessment has not been fulfilled and as such, the assumption of jurisdiction u/s 147 of the Act is not valid – thus, the notice issued u/s 148 of the Act is set aside – Decided against Revenue.
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