TMI Blog2008 (9) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. 5. That in any case the AO has erred in law and on facts while making the addition of Rs. 22 50,241 and charging interest under ss. 234B and 234C." 3. Briefly stated, the facts of the case are that the assessee is a jeweller. There was a survey under s. 133A of the IT Act, 1961 on 22nd Jan., 1999. During the course of survey following discrepancies were noticed: ------------------------------------------------------------- Particulars Found on Reflected as per Difference physical books of verification account/trading account as on 22-1-1999 ------------------------------------------------------------- 1 2 3 4 ------------------------------------------------------------- Cash Rs. 1,58,940 Rs. 3,080 Rs. 1,55.860 Gold 9,745.265 gms. 376.940 gms. 9,368.325 gms. ornaments Silver 7,000 gms. 4,605.560 gms. 2,384.440 gms. ------------------------------------------------------------- During the course of survey, Shri Rajnish Kumar, partner, stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 3,00,000 Smt. Rajni Jain W/o Shri Rajnish Jain Rs. 3,00,000 -------------- Total : Rs. 14,00,000 -------------- I shall pay advance tax or surrender amount before the due date. Yours faithfully Dt. 22nd Jan., 1999 Sd/- For Hans Raj Rajnish Kumar Jain" Further, the assessee filed a return of income declaring income at Rs. 5,05,031 on 30th Aug., 1999. The same was processed under s. 143(1) of the Act on 30th Oct., 2000. Later on, the assessment was completed under s. 143(3) of the Act vide order dt. 26th Feb., 2002 at an income of Rs. 5,05,610. Thereafter, notice under s. 148 was issued on 19th Oct., 2005 by recording the reasons as follows: "Reasons for belief that income has escaped assessment Return declaring income of Rs. 5,05,301 was filed on 30th Aug., 1999. The same was processed under s. 143(1) on 30th Oct., 2000. Later on, assessment under s. 143(3) was completed vide order dt. 26th Feb., 2002 at an income of Rs. 5,05,610. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajni Jain W/o Shri Rajnish Kumar 457.665 gms. -------------- 2,792.935 gms. -------------- In his statement, recorded during the course of survey, Shri Rajnish Kumar had himself admitted that he was not in a position to identify the items belonging to the friends and relatives on the plea that the gold was reshaped many times. He stated that the whole of the gold ornaments were stock-in-trade irrespective of the ownership of these ornaments. However, he alleged gold claimed to be belonging to the relatives/friends weighing 5,167.600 gms. does not appear in the books of the assessee as stock-in-trade or liabilities in the names of friends and relatives from whom gold is claimed to have been received. However, after the survey the assessee furnished the details of gold weighing 6,019.500 gms. (Net weight 5,167.600 gms.) belonging to friends, relatives, which included 1,050.200 gms. (Net weight 892.670 gms.) belonging to the partners, S/Shri Rajnish Kumar and Sunit Kumar and Smt. Rajni Jain W/o Shri Rajnish Kumar, partner. During the assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ends Gross 6,079.50 gms. Less: Impurity 911.90 gms. 5,167.500 gms. ------------- -------------- 3,115.875 gms. Gold lying with goldsmiths 54.000 gms. -------------- 3,169.875 gms. -------------- Gold as per trading account as on 21-1-1999 lying stock 376.940 gms. -------------- Difference 2,792.935 gms. -------------- Regarding stock of silver As per physical verification 7,000 gms. Less: As per trading account as on 21-1-1999 4,605.560 gms. -------------- 2,394.440 gms. Regarding cash That as per physically counting Rs. 1,58,940 Cash in hand as per books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and the AO has completed assessment under s. 143(3) and examined the issue from all angles and concluded that the issue cannot be raked up again and again in the guise of assessment. He submitted that all the aspects emerging from the reasons recorded by the successor officer for initiation of reassessment proceedings had been considered in the original assessment proceedings and the initiation of assessment proceeding is invalid and cannot be sustained because there was nothing but a change of opinion because of change of the officer. He submitted that on the same set of facts and laws, the AO could not reopen the concluded matter. There is no question of having second thoughts on the same material, which is considered by the Department for original assessment. If the AO failed to look into the documents which are in possession at the time of original assessment, he cannot be allowed to make up for his own default by taking recourse to the reopening of the assessment. Further, he submitted that the reopening of concluded assessment is not permissible simply on the ground that a new view may be entertained on the same facts. He submitted that reopening of a completed assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Rani vs. AO in ITA No. 68/Asr/2004 for the asst. yr. 1998-99, order dt. 2nd June, 2005, wherein it has been held as under: "5. We have heard both the parties at some length and given our thoughtful consideration to the rival submissions with reference to facts, evidence and material on record. We find from the copy of the first assessment order placed at p. 24 of the paper book that this issue was examined in detail at the time of completing the first assessment under s. 143(3) on 18th Oct., 2000. The AO was fully aware of the fact that the assessee had not completed construction of the residential house for claiming exemption under s. 54F. The AO also made detailed enquiries by referring the property to the valuation cell for ascertaining the cost of construction. The valuation officer had inspected the property before submitting his report. Other evidence was also furnished. Thus, the assessee had submitted complete information in response to queries raised by the AO. It is only after examining these aspects that the AO made an addition of Rs. 50,000 on an agreed basis. A perusal of the reassessment order shows that the assessment had been reopened only on the basis of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act does not postulate conferment of power upon the AO to initiate reassessment proceedings upon a mere change of opinion.' The ratio of this judgment is directly applicable to the facts of the present case. Here also, the AO was aware of the fact that the assessee had not yet completed the construction of house at the time of completing the assessment under s. 143(3). Still the AO allowed the claim for exemption under s. 54F by making an agreed addition of Rs. 50,000. The subsequent action of the AO for reopening the assessment on the basis of same facts and material was mere change of opinion. The provisions of s. 147 cannot be invoked for rectifying the wrong or errors committed by the AO at the time of completing the assessment. In such a case, recourse to s. 263 may perhaps be justified but not action under s. 147. 5.1. In the case of CIT vs. Foramer France (2003) 185 CTR (SC) 512 : (2003) 264 ITR 566 (SC), the Hon'ble Supreme Court has held that the assessment cannot be reopened on the basis of mere change of opinion and the amendment to s. 147 introduced w.e.f. 1st April, 1989 has not altered the position inasmuch as that even under the amended provisions, the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below. 5.1 Regarding affidavits, he submitted that these documents are afterthought and self-serving documents and need not to be considered. Hence, the same were not considered by the AO. 5.2 Regarding cross-examination of the assessee, it was submitted by the learned Departmental Representative that the affidavit was filed by the assessee at the time of reassessment proceedings. At the time of survey on 22nd Jan., 1999, it was submitted that the assessee was not in a position to identify the friends and relatives to whom excess jewellery belonged to. Even at the assessment stage. the assessee has not filed any evidence to suggest that the excess jewellery belonged to friends and relatives and there is no iota of evidence to show that this belongs to the assessee, his friends and relatives. The assessee has filed affidavits from the following persons: 1. Affidavit of Shri Kamal Jain 2. Affidavit of Smt. Rajni Jain 3. Affidavit of Shri Sumit Jain 4. Affidavit of Shri Amrit Lal Jain 5. Affidavit of Shri Kulwant Singh 6. Affidavit of Shri Sukhdev Singh 7. Affidavit of Shri Kewal Singh 8. Affidavit of Shri Manjit Singh 9. Affidavit of Shri Baljinder S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to-time has been furnished, which have been placed on records after verification. Books of account produced have been test checked and case discussed with them." After that the AO, has not made any addition towards excess stock of jewellery found during the course of survey. The AO formed an opinion that there was no reason for making further addition with regard to excess jewellery found during the course of survey. Notice of reopening was issued on 19th Oct., 2005. Sec. 147 does not confer jurisdiction to the AO to review its earlier proceedings. If that was not the legal position, it would result in placing an unrestricted power of review in the hands of the assessing authorities depending on their changing moods. The AO has not found any fresh facts for the purpose of issuing the notice for reopening of the assessment. The AO was not in possession of any fresh facts for issue of notice under s. 148. The AO has formed the opinion that there was no necessity of making further addition towards excess jewellery found in the course of survey and he has opted not to make any addition on this count and satisfied that the assessee's surrender of additional income of Rs. 14 lacs in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot reopen the assessment on the same set of facts over again. If the AO came in possession of new information after completion of assessment, he can reopen the assessment. But, in the present case, all the survey material gathered during the course of survey was available with the AO at the time of original assessment, which was discussed by the AO as stated in the preceding paras and he came to the conclusion that there was no necessity of further addition on account of excess jewellery found during the course of survey and the offer made by the assessee was enough to meet the requirement of excess stock. 6.1 There is no fresh information available with the AO to reopen the concluded assessment in order to show that the AO concluded the original assessment on the basis of false belief and there is no acquiring of fresh information by the AO to expose the falsity of the statement made by the assessee at the time of original assessment and there is no material to suggest that the AO concluded the original assessment without further enquiry at the behest of the assessee. The AO is not in possession of any further information. 6.2 The duty of the assessee is to disclose all the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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