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2024 (1) TMI 865 - BOMBAY HIGH COURTReopening of assessment u/s 147 - change of opinion - reasons to believe - Since there is no business activity during the year under consideration and project is yet to be commenced, hence the amount of financial cost along with depreciation and other expenses should be capitalized as preliminary expenses under the head work in progress and this fact was not verified by the assessing officer while finalizing the assessment - HELD THAT:- During the assessment proceedings, petitioner received a notice dated 21st June 2019 in which petitioner was called upon to provide working of depreciation claimed as per the IT Act and party-wise details (name, address and amount) of interest on unsecured loan claimed alongwith details of TDS compliance. Petitioner was also asked to provide party-wise details of unsecured loans alongwith compliance to requirement of Section 68 of the Act and also party-wise details of loan from NBFCS/others. Petitioner responded to the same and provided the details. Subsequently, petitioner received another notice dated 4th September 2019 u/s 142(1) of the Act calling upon petitioner to provide details of the loans, advances and deposits received and given in the format prescribed and also details of all expenses above Rs. 1 lakh debited under each head of Profit and Loss account alongwith comparative analysis with previous year’s figures. Petitioner provided these details. It is true that in the assessment order there is no elaborate discussion regarding these items but there has been disallowance on interest on TDS amount debited to Profit and Loss account. This is an indication that the subject matter of financial cost and other expenses has been discussed during the assessment proceedings. As held in Aroni Commercials Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. The only requirement is that the AO ought to have considered the objection now raised in the grounds for issuing notice u/s 148 during the original assessment proceedings. Therefore, it is obvious that the reopening of the assessment by impugned notice dated 30th March 2021 is merely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceeding leading to the assessment order dated 20th December 2019. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Thus this Hon’ble Court be pleased to issue a writ of Certiorari calling for records pertaining to the impugned notice u/s 148 by the Respondent No. 3 and after going into the validity and legality thereof to quash and set aside the same.
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