TMI Blog2003 (12) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of accounts along with the audit report. The said return was processed under section 143(1) on30th March, 1994. Subsequently, on the basis of findings arrived at in the assessment proceedings for assessment year 1992-93, the Assessing Officer initiated the proceedings under section 147 after recording the reasons vide order sheet entry dated-23-6-1995. The relevant portion of the reasons as extracted by the CIT(A) in his order reads as under: "That it was observed by him that the assessee had interpreted the provision of Rule 9B in a wrong way. The method adopted by the assessee and calculation as per Rule 9 have been dealt with in details in the assessment year 1992-93. It has been observed that in assessment year 1993-94 also the assessee has twisted the provision of Rule 9B as per his own wishes. Looking to the above facts I have to believe that income in the assessment year 1993-94 has escaped assessment and it needs to be re-assessed, re-computed by issue of notice under section 148." In the course of reassessment proceedings, the assessee was asked to explain as to why it had claimed as deduction the cost of positive prints in the year under consideration which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... howing such amount in balance sheet on the asset side. 5. In assessment year 1992-93, the assessee exhibited certain films which, inter alia, included two films, namely, 'Lakshman Rekha' and 'Suryavanshi' where the assessee could not exhibit these films on commercial basis for 180 days or more and also could not realize the expenditure on account of MG amount and cost of print. In case of 'Lakshman Rekha', MG amount was Rs.35 lakhs and cost of prints was Rs. 9,44,477 while the amount realized by the assessee was Rs. 21,57,375. Thus, the loss to the assessee was Rs. 22,87,102 which was carried forward to assessment year 1993-94. In the similar manner, there was loss of Rs. 6,21,685 in the case of film 'Suryavanshi' and the same was also carried forward to assessment year 1993-94. Thus, two losses have been claimed as deduction in the year under consideration. 6. Similarly in the year under consideration, the assessee could not recover the cost of acquisition and cost of positive prints in the case of two films, namely, 'Insaniyat Ke Devta' and 'Shriman Aashique' and consequently, the losses of Rs. 9,25,687 and Rs. 7,31,413 respectively were carried forward to assessment year 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of these two films. This resulted in extra deduction of Rs. 11,91,737 though not claimed by assessee. Thus, claim of carry forward of Rs. 16,57,102 was reduced to Rs. 4,65,365. 9. On appeal, it was contended before the CIT(A) that the order for assessment year 1991-92 was passed in March, 1994 accepting the assessee's books of account based on assessee's interpretation of Rule 9B. Hence, proceedings under section 147 were initiated only on mere change of opinion which was not permissible in law. The CIT(A) accepted this contention of the assessee and, therefore, held that the action of Assessing Officer under section 147 was unjustified. As far as addition of Rs. 15,67,161 was concerned, the same was deleted following his order for assessment year 1992-93. Consequently, the carry forward of Rs. 16,57,100 was also allowed to next year. Aggrieved by the same, the revenue is in appeal before the Tribunal on these issues. 10. The learned DR has vehemently contended before us that reassessment proceedings were validly initiated inasmuch as there was escapement of income since cost of positive prints could not be legally carried forward to the next year as per Rule 9B. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer in respect of all the issues involved in the assessment. The view taken by us is fortified by the various judgments. 12. At this juncture, it would be appropriate to refer to the observations of Justice D.R. Khanna of the Hon'ble Delhi High Court in the case of CIT v. H.P. Sharma [1980] 122 ITR 675 at page 699 which are quoted below: "It need hardly be said that change of opinion presupposes that there was earlier formation of an opinion. When no such opinion was formed, it will be too far-fetched to assume that a change in that opinion was being effected. Further, the safest and surest guide for ascertaining whether any such opinion was formed at the original assessment stage is to look to the assessment order itself. When it, of its own, does not reveal that the matters and controversies now sought to be raised by way of reassessment were at all before the ITA or considered by him, it would be entirely surmiseful and, therefore, no permissible to still import that existence and consideration. This can however, be permissible only where the assessment record of that stage overwhelmingly brings out that the matter did come for due consideration and was in fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are quoted below: "A change of opinion by the ITO contemplates formation of two different opinions or to make two different inferences at two stages on the same set of primary facts which are true." 15. Let us now examine the facts of the case in the light of the above legal position. In the present case, in our opinion, the assessee has not been able to establish that Assessing Officer had accepted the interpretation of Rule 9B in the manner stated by the assessee. As far as this year is concerned, the return filed by the assessee was processed under section 143(1). Therefore, it cannot be said that Assessing Officer formed any opinion in such proceedings. As far as earlier years are concerned, no material has been placed before us in respect of any year prior to assessment year 1991-92. As far as assessment year 1992-93 is concerned, the Assessing Officer has not accepted the stand of the assessee. So the only year on which reliance is placed by the assessee is the assessment year 1991-92. Let us examine whether the Assessing Officer had accepted the stand of the assessee in assessment year 1991-92. In that year, the assessee could not run four films, namely, 'Farishtey', ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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