TMI Blog2010 (8) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... see is in appeal before us against the order of learned CIT(A) dt.28th Jan., 2008 passed for asst. yr. 2002-03. Originally, the assessee has raised only one substantial ground of appeal wherein it has pleaded that learned CIT(A) has erred in confirming the disallowance of Rs. 43,48,141 by holding that communication expenses debited by the assessee is not an ascertained liability rather it is contingent one which does not deserve to be allowed in this year. Subsequently, the assessee has raised an additional ground of appeal wherein it has challenged the reopening of assessment by issuance of a notice under section 148 of the IT Act, 1961. According to the learned counsel for the assessee, no investigation of fresh facts is required for adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessment order was passed on 30th March, 2005. The assessee had claimed communication expenses of Rs. 43,48,141. AO had raised a specific query about the nature of the expenses and after the reply of the assessee he did not make elaborate discussion but allowed the deduction. AO had reopened the assessment by issuing a notice under section 148 of the Act. According to the AO, the assessee had claimed provision of communication expenses of Rs. 43,48,141 on the basis of management's estimate pending finalization of the agreement. This item was thus a provision and not an ascertained liability, therefore, it was not allowable to the assessee. In the opinion of the AO, the income to this extent has escaped assessment, therefore, the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried the dispute before the Hon'ble Delhi High Court in ITA No. 751 /Del/2010 and its appeal has been dismissed by the Hon'ble Delhi High Court vide its order dt. 8th July, 2010. 5. The Learned counsel for the assessee while challenging the reopening of assessment submitted that in the original round of assessment proceedings, the AO has specifically asked a question. He took us through page No. 3 wherein copy of the questionnaire issued by the AO vide letter dt. 14th Feb., 2005 is available. At serial No. 4 of this questionnaire, the query of AO reads as under : "4. In addition to other business expenses debited in P L a/c file details with evidence in respect of communication expenses and rent amounting to Rs. 1.66 crores and Rs. 1.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a contingent liability which is not allowable. The assessment has been reopened only on the basis of change of opinion which is not sustainable in the eyes of law. For buttressing his contentions, he relied upon the following decisions : 1. Jal Hotels Co. Ltd. v. Asstt. DIT (Delhi); 2. CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi)(FB); and 3. Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1 (SC). 8. Learned Departmental Representative on the other hand submitted that for reopening of an assessment, two conditions are to be satisfied in the present case i.e., whether assessee has disclosed all its facts truly and fully. Referring to Explanation 1, appended with section 147, he submitted that production of books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruh Finance Ltd. v Jt. CIT [2000] 243 ITR 482. He pointed out that in this decision, the decision of Hon'ble Delhi High Court in the case of Kelvinator of India Ltd. (supra) was also brought to the notice of the Hon'ble High Court. 9. We have duly considered the rival contentions and gone through the record carefully. The learned counsel for the assessee has pointed out that the issue regarding communication expenses was duly considered by the AO in a scrutiny assessment made under section 143(3) of the Act. AO did not possess any fresh material for giving rise to any reason to believe that the income has escaped assessment. He has reopened the assessment only by reappreciating the material already available. On an analysis of the record, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 1 is also in respect of proviso appended to section 147 of the Act. The case of the assessee is that assessment is being reopened on the basis of the changed opinion and it is covered by the Full Bench decision of the Hon'ble Delhi High Court in the case of Kelvinator of India Ltd. (supra) which has been upheld by the Hon'ble Supreme Court also. On a detailed analysis of all the facts and circumstances, we are of the opinion that there was no new information or material which came to the notice of the AO which can authorize him to form an opinion that income has escaped assessment. As far as the case laws relied upon by the learned Departmental Representative in the case of Consolidated Photo Finvest Ltd. (supra) is concerned, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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