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2010 (5) TMI 645 - ITAT MUMBAIValidity of reassessment proceedings initiated by issue of notice u/s 148 - assessment reopened on ground that expenses incurred for development of initial computer software technology known as "Vision Software" is a capital in nature, the same cannot be allowed as revenue expenditure as claimed by assessee - assessee challenged reopening of the assessment on the ground that no new facts had been brought on record and therefore, assessment could not be reopened merely on the basis of change of opinion - Held that:- When AO had enquired into a point or an issue while completing the assessment proceedings u/s 143(3), he is presumed to have applied his mind to the same and formed an opinion about its allowability even though no specific reference to the point or the enquiry made by him is made in the assessment order and even if no reasons were given in the assessment order as to how he formed the opinion about the allowability of the assessee's claim. In the absence of any tangible material which could persuade the AO to form the belief that income chargeable to tax had escaped assessment by reason of the allowance of the expenses, he cannot issue notice u/s 148, even though the notice has been issued on 7-10-2002, which is within the period of four years from the end of the AY 1998-99. Therefore, initiation of reassessment proceedings u/s 147 was void ab initio - Decided in favor of assessee.
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