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2022 (8) TMI 600 - AT - Income TaxRectification of mistakes - estimation of Net profit - application of net profit rate @ 8% - Best Judgment assessment - addition being hire charges separately - HELD THAT:- We find that the adjustments made in the order passed u/s. 154 are not apparent mistakes on records, because the ld.AO has passed best judgment assessment order based on financial statements placed before him and therefore, the adjustments made by the ld. AO in the order passed u/s. 154 of the Act treating the hire charges as part of the contract receipts and again adding them to the total income and also adding the amount of interest on NSC/FD as part of the gross contract receipts and not allowing the claim of partner’s remuneration and interest, which have been allowed in the regular assessment proceedings by no stretch of imagination are mistakes apparent from records. Therefore, in our considered view all the adjustments made in the order(s) u/s. 154 of the Act dt. 11.12.2015 and 15.1.2016 have no legs to stand and therefore, the alleged addition in challenge before us arising out of the said order stands deleted. Accordingly, all the effective grounds raise are allowed. Reopening of assessment u/s 147 - taxing the interest income as income from ‘other sources’ and not treating it as part of gross contract receipts - HELD THAT:- We find that the reason for which the case has been reopened relates to interest income - This interest income has been duly shown in the audited financial statement and tax audit report and it is not a case that the assessee failed to disclose such income in the I.T return. The ld. AO has not received any information from outside source, which the assessee failed to furnish/disclose in the return of income or concealed any particulars. Thus, it is a clear case of change of opinion as the ld. AO passed best judgment assessment order after going through the financial statements and details appearing in the audit report and the audited balance sheet, which included the interest income on FDR/NSC and took a plausible view and estimated the net profit @ 8% of the gross contract receipts as against 0.39% declared by assessee. This action of ld.AO is sufficient to indicate that ld.AO has considered all aspects and took a best judgment to assess the assessee’s income at much higher than the income declared in Audited Financial Statements. We find that on the very same issue of taxability of interest income on FDR/NSC the ld.AO wants to change his opinion and also wants to tax it separately as income from ‘other sources’. It is judicially well settled that for mere change of opinion, reopening of assessment is not allowed. We, therefore, are of the considered view the re-opening proceedings carried out by the ld.AO are bad in law and liable to be quashed. Accordingly, we quash the re-opening proceedings and delete the addition(s) so made in this assessment. Assessee appeal allowed.
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