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2014 (12) TMI 210 - AT - Income TaxValidity of reopening of assessment u/s 147 - Validity of addition u/s 40(a)(ia) Income enhancement Held that:- Original assessment was made u/s 143(3) of the Act - AO has dealt with the disallowance in respect of sundry creditors - there is a clear mention of payment to M/s. Paramount Film (India) Pvt. Ltd. wherein the outstanding amount has been shown at ₹ 10,59,716 - The AO has noted that the assesse has given the names and address details very late - the AO has duly considered the payment to M./s. Paramount Film (India) Pvt. Ltd. assessee submitted that the agreement under which payment was made to M/s. Paramount Film (India)Ltd. was also submitted before the AO - He was also aware of the payments and balance outstanding in the name of the company - it cannot be said that the AO was not aware of the nature of payments made to the party - AO has also considered and chosen not to make any addition u/s 41(1) of the Act in the name of the party, despite noting that the Inspector has reported that payment made during the year to the party was ₹ 55,54,177 - Thus AO after conscious application of mind has chosen not to make any disallowance - the AO has applied his mind regarding the nature of payment and chosen not to make any disallowance. Validity of reopening of assessment u/s 147 change of opinion Held that:- No new fact has come to the notice of AO for reopening the issue of payment to M/s. Paramount Film (India) Ltd. - The nature of payments, licencee agreement made with the party were all available with the AO in the original assessment u/s 143(3) of the Act - AO consciously made a decision not to make any disallowance in this regard - Hence on the same issue when the reopening is done and the AO changes his opinion and comes to the decision that the assessee should have been deducted TDS u/s 195 of the Act, it is clearly a change of opinion - It is a fresh application of mind on the same set of facts which is impressible - thus it is not open for the officer to reopen the assessment just because he does not agree to the decision of the previous officer - reopening on mere change of opinion between two officers is not legally permissible. Relying upon CIT vs Kelvinator of India Ltd [2010 (1) TMI 11 - SUPREME COURT OF INDIA] - if the AO has considered the payment and nature of the payment to M/s. Paramount (India) Ltd. and chosen not to make any disallowance, reopening and addition on this account is merely a change of opinion and is not permissible thus, the reopening is set aside Decided in favour of assessee.
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