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2018 (12) TMI 1347 - HC - Income TaxReopening of assessment - assessee had adjusted the interest income against the interest expenditure which according to AO was not permissible - eligibility of reason to believe - Held that:- Whatever may be the validity or assessee's stand in this respect, it cannot be denied that the Assessing Officer had asked the assessee to explain why the interest income of certain amount was not offered to tax and the assessee did offer the explanation in this respect. Further, as noted the assessee had also produced the full details of the interest earned and the interest paid on borrowed capital. The total of interest paid come to ₹ 47,11,82,441/. The interest amount received was ₹ 11,08,36,618/. In Exhibit 7, the assessee also clarified that the company has netted off the interest received of ₹ 11,08,36,618/against the interest paid of ₹ 47,11,82,441/ and the remaining amount was transferred to work in progress account. Indisputably, therefore, the entire question of taxing the assessee's interest of ₹ 11,08,36,618/ was minutely scrutinized by the Assessing Officer during the original assessment proceedings. In the absence of any new material, the reopening of the assessment would be based on mere change of opinion. It is true that in the final order of assessment, the Assessing Officer had not elaborated this aspect but had not made any disallowance or addition in the hands of the assessee. Merely because the order of assessment was silent on a particular claim of the assessee, would not by itself mean that the same was not scrutinized or that the Assessing Officer had not formed an opinion with respect to the same. If after detailed scrutiny during the assessment, the Assessing Officer examines a claim but does not reject the claim of the assessee which had come up for scrutiny, would not enable the Revenue to argue that the Assessing Officer had not formed any opinion on such issue and, therefore, reopening of the assessment would be permissible without there being any new or additional material available to the Assessing Office - Thus the impugned notice is set aside - Decided in favour of assessee
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