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2015 (3) TMI 878 - AT - Income TaxReopening of assessment - Explanation to Section 73 of the Act was not applicable to the assesse - CIT(A) annulling the reassessment proceedings holding that there was no reason for the Assessing Officer to believe that income has escaped assessment and that the notice u/s.148 of the Act was invalid - Held that - In the present case it is noticed that the AO during the course of original assessment proceedings specifically asked the assessee about the application of Explanation to sec. 73 of the Act and the assessee had categorically replied as to how it was a company whose gross total income consisted mainly of income which was chargeable under the Interest on Securities Income from house property Capital gains and income from other sources . The assessee has stated that its principal business was granting of loan. Thereafter the AO passed the assessment order u/s. 143(3) by considering the material on record and formed an opinion that Explanation to Sec 73 was not applicable in the case of the assessee. In the instant case the AO has recorded the reasons before issuing of notice u/s. 148 of the Act and stated that the principal business of the assessee was not that of granting of loan but did not find any error in the submissions of the assessee that gross total income of assessee consisted mainly of income which is chargeable under the heads Interest on securities Income from house property Capital Gains and Income from other sources . Moreover the reasons recorded for re-opening shows that the AO did not find any error in the explanation of the assessee for non- application of Explanation to Sec. 73 but still invoked the provisions of Explanation to Sec 73 of the Act. In the present case reopening of assessment was done by the AO merely on the basis of change of opinion. Therefore re-opening in this case was not valid and the ld.CIT(A) has rightly held so. In that view of the matter we do not find any valid ground to interfere with the findings given by the ld.CIT(A) in annulling the re-assessment. - Decided in favour of assessee.
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