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2022 (3) TMI 893 - AT - Income TaxValidity of Reopening of assessment u/s 147 - Reopening on the basis of the report of the Centralized Audit Unit, CAG - transfer from the share premium account to P&L account as resulted to conversion of the capital receipts into Revenue receipts as credit to the P&L account reduced from statement of income - main object of the CAG is that the assessee cannot take a different stand one in the Income Tax purpose and another for the book purpose i.e., treating it as capital receipts for the Income Tax purpose and crediting it to P&L account for the book purpose - HELD THAT:- The assessee adjusted the security premium by reduction of capital. In one hand, the credit was made in P&L account and on the other hand amount was adjusted during computation of income u/s. 115JB of the Act. There is no affect in the P&L account during computation of the net profit. The issue was already disclosed in the tax audit report and as well as computation u/s. 115JB of the Act. During the assessment u/s. 143(3), the AO never pointed out the issue as escapement of income. The reopening was made as per the report of the CAG. So, there is no tangible material to the ld. AO for permission of reasonable believe for escapement of income. Different Apex Court pointed out that the audit report cannot be the basis for re-opening u/s. 148 of the Act. Further, there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for this assessment. There is no reason to believe that the income has escaped assessment during the year. The Petitioner statement that all said withdrawals from security premium account consequent to the aforesaid proposal will be utilized for the adjustments set up prescribed above. The issue was already discussed in the financial statement for the financial year 2008-09 and which was came to the purview of the ld. AO. The re-opening is nothing but a mere change of opinion of the Ld. AO during formation of belief for re-opening, Pr CIT, Non-Corporate Cir.2(1)/Chennai vs M.R.Narayanan,[2021 (6) TMI 825 - MADRAS HIGH COURT] As a result, all the grounds of the Revenue are rejected in relation to the re-opening u/s. 148 - Decided against revenue.
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