TMI Blog2007 (8) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT] , we find that the impugned income escaping assessment is bad in law. Therefore, it is to be set aside. The assessee is successful in its appeal for the assessment year 2000-01. Rent received form residential Apartment - Taxable under the head income from house property Or Income from business - HELD THAT:- In the present case, the property of the assessee is a simple and pure residential apartment. The assessee has provided window air-conditioner. Furnitures also have been given. In other words, what is let out by the assessee is a furnished apartment. The furnishings provided by the assessee by way of window air-conditioner and furniture do not change the character of the asset from that of house property to that of business asset. The assessee is not carrying on any business by way of letting out the residential property. Moreover, it is also to be held that the property does not cease to be house property only for the reason that assessee has provided air-conditioners and furniture in the residential apartment. The reliance placed by the assessee on clause ( iii ) sub-section (2) of section 56 is also not convincing. The law provides therein that hire charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only asset of the company is the flats and the air-conditioners and furnitures provided therein. The nature of the property was known to the Assessing Authority. All the particulars were furnished to him. It is the case of income from a single item of property. Therefore, once the assessment having been completed by accepting the return of income under section 143(1), there is no justification to go for an income escaping assessment only on the basis of a change of opinion. 4. The learned Counsel relied on the decision of the Madras High Court in the case of Bapalal Co. Exports v. Jt. CIT (OSD) [2007] 289 ITR 37. The learned Counsel stated that the Court has held in the said case that once an opinion is given in an assessment, it cannot be reopened by any other authority except on fresh material. That apart, a notice issued under section 148 of the Act should be a reasoned one whereas the order in question had been issued without assigning any reason justifying the issue of notice. In the absence of any new material, the Assessing Officer is not empowered to reopen an assessment irrespective of whether it is made under section 143(1) or 143(3). 5. The learned Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timation under section 143(1). The issue raised by the assessee is regarding the ingredients of section 147, themselves. The question itself is whether action under section 147 was justified or not. The question is not linked with a proceedings concluded under section 143(1) or under section 143(3). But the Madras High Court in the case of Bapalal Co. Exports ( supra ) has considered a case exactly similar to the present case. There also, the assessment completed under section 143(1). Thereafter no fresh material had come to the notice of the Assessing Authority. Notice under section 148 was issued in the absence of any new material. The Court held that reasons stated by the Assessing Authority did not justify issue of notice under section 148. In that context, the Court held in the absence of any new material, the Assessing Officer is not empowered to reopen an assessment whether the original assessment was completed under section 143(1) or 143(3). 9. In the present case also, the assessee has made full disclosure regarding its income. The particulars of the property have also been furnished. The Assessing Officer has not come across any new material. 10. The assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient that he acts at the behest of any superior authority. If the above principle of self-satisfaction is not satisfied and the reopening was initiated under the direction of superior authority, the reopening of assessment would be bad for non-satisfaction of the condition precedent. 14. The Delhi High Court in the case of Jindal Photo Films Ltd. v. Dy. CIT [1998] 234 ITR 170 has held that where the Income-tax Officer attempts to reopen an assessment because the opinion formed earlier by him was in his opinion incorrect, the reopening could not be done. 15. The Gujarat High Court in the case of Garden Silk Mills (P.) Ltd. v. Dy. CIT [1999] 237 ITR 668 has considered the conditions precedent to reopen an assessment under section 147 and has held that the reason to believe that income has escaped assessment should be borne out of material and a change of opinion will not be sufficient to justify a reassessment proceeding. 16. Again, the Gujarat High Court in the case of Adani Exports v. Dy. CIT [1999] 240 ITR 224 has held that the Assessing Officer must have reason to believe that income has escaped assessment and the existence of such belief is open to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable to income-tax under the head Profits and gains of business or profession shall be chargeable to income-tax under the head Income from other sources ." 23. Shri Bharat Bhushan, the learned Senior D.R., on the other hand, submitted that the case of the assessee is a pure and simple case of letting out of a furnished residential apartment. It is nothing but income from house property. The assessee has provided window air-conditioners. The assessee has provided furniture. These are all essential parts of a residential apartment. He, therefore, submitted that the revenue has treated the rental income rightly as income from house property. 24. We considered the matter in detail. The Full Bench decision of the ITAT Delhi Bench "B" in the case of Shashi Kant Gupta ( supra ) does not go to help the case of the assessee. In that case, the building let out by the assessee had an air-conditioning plant which was inseparable from the building. The predominance of the property in that case was a building with an air-conditioning plant. In the present case, the property of the assessee is a simple and pure residential apartment. The assessee has provided window air-conditioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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