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2024 (5) TMI 352 - BOMBAY HIGH COURTValidity of Reassessment proceedings - reason to believe escapement of income - notice issued within four years from the end of the relevant assessment year - what tangible material which AO has done in the reasons to believe? - reason to believe under two heads, i.e., expenses towards designing fees which was capitalized and a sum that assessee paid towards concession fee to Punjab Urban Development Authority (PUDA) - HELD THAT:- The reasons made available itself shows that it was a clear case of change of opinion. On the first item, i.e., expenses towards designing fees, which was capitalized, the A.O. states “the said contention was accepted and expenses was allowed by the department”. In Paragraph No. 2.3 it is stated “such expenses was not to be allowed as revenue expense and should have been capitalized and required to be disallowed and added back”. Therefore, it is a clear case of change of opinion. For amount paid towards concession fee to PUDA it is stated that it is arising out of the contractual obligation between assessee company and PUDA, the same had been claimed as deduction while computing income. The said deduction was accepted and deduction was allowed to assessee - In Paragraph No. 3.1 it is stated that “ such expense was also required to be capitalized as work in progress in the books of accounts of assessee and should have been disallowed.” Therefore, this is also a clear case of change of opinion. Moreover, during the course of assessment proceedings petitioner had also received a notice under Section 142(1) of the Act calling upon to furnish various materials under different heads including details of designing fees expense with copy of ledger and party wise details as also details regarding concession paid to PUDA. By its letter petitioner provided all the details. Therefore, these two items were also subject of consideration during the assessment proceedings. Since the reasons to believe itself indicate as noted above that the reopening is based purely on change of opinion, as held in Aroni Commercials Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] this change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Decided in favour of assessee.
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