TMI Blog2004 (6) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to be carried forward to be set off against the business income of the subsequent year. The AO found that in both the years, i.e., asst. yrs. 1997-98 and 1998-99, the assessee had not shown any sale from own wool combing business and just declared income from interest and job work charges and reducing the same by brought forward loss of asst. yr. 1996-97. The AO further observed that since the assessee was not having any business activity during asst. yrs. 1997-98 and 1998-99, its action was not admissible under law of setting off income for these years against brought forward business loss of asst. yr. 1996-97. He, therefore, reopened the assessment framed under s. 143(3) by issuing notice under s. 148, dt. 19th Feb., 2002. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of electricity charges paid month-wise, details of purchase of rice husk which was required for running the boiler and without which no job work could be carried out. The assessee also pointed out that it had been further mentioned in the order that the machinery was also used for part of the year and assessment under s. 143(3) was completed on the basis of audited books of account and after taking into consideration P L a/c and giving benefit of brought forward loss. The assessee also submitted that the AO was grossly unjustified in taking the activities of the company as income from non-business activity since the assessee had duly disclosed the interest income in P L a/c and TDS had been claimed for which certificate in Form No. 16A h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The CIT(A) further observed that there had been merely a change of opinion on the part of the AO while observing that brought forward loss had wrongly been adjusted against non-business income, especially when interest income had duly been disclosed in P L a/c and TDS claimed in Form No. 16A were submitted during the course of assessment proceedings under s. 143(3). The CIT(A), therefore, considering the above facts and circumstances of the case and after analysing various aspects of the case, quashed the action of the AO in reopening the case under s. 148. 4. Before us, learned Departmental Representative could not controvert the finding of the CIT(A) except relying on the order of the AO. It was further submitted that since there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclose the material facts during assessment under s. 143(3). Hence, the action of the AO under s. 148 was not justified. In support of his contention, learned Authorised Representative relied on order of the Tribunal in the case of Jt. CIT vs. Groz Backert Asia Ltd. reported in (2003) 86 ITD 291 (Chd), wherein it was held that where the assessee had filed the balance sheet and other documents which were accepted by the AO in assessment under s. 143(3) and so this reopening was a case of mere change of opinion. He also placed reliance on the decision of the Hon'ble jurisdictional High Court in the case of CIT vs. Amritsar Swadeshi Woollen Mills (1989) 180 ITR 144 (P H), wherein it was held that even if original assessment was erroneous, acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable on record, the paper book and the case law cited by the learned Authorised Representative. We find that the AO while reopening the case under s. 148, has observed that, since the assessee had closed down its business activity and was doing only job work and having interest income which clearly showed that it was generating income from non-business process and reopened the original assessment passed under s. 143(3) but we find that such observation of the AO was not based on any substantive ground, in view of the fact that since the assessee had furnished all the details pertaining to job work and interest income along with audited trading and P L a/c, depreciation chart, electricity bills, details of purchase of rice husk required for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a failure on the part of the assessee to disclose material facts necessary for assessment. The notices under s. 148 were not valid and were liable to be quashed." 5.2 We, therefore, based on the above facts and circumstances of the case and following the case law cited above, find that the action of the AO in reopening the case under s. 148 was not justified, as the original assessment under s. 143(3) was made by the AO on the basis of relevant material facts and documents placed before him and there was no failure on the part of the assessee to disclose or furnish any other requirement asked for by the AO during such original assessment. Since there was no omission or failure on the part of the assessee to disclose material facts necess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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