TMI Blog2015 (10) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee in disclosing truly and fully all material facts reopening of assessment after expiry of four years from the end of the assessment year is clearly against the statutory mandate, hence, is without jurisidiction. In case of Parashuram Pottery Works Co. Ltd. V/s. ITO, Circle-I, Ward A, Rajkot (1976 (11) TMI 1 - SUPREME Court) held that the duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. It is for the ITO to draw the correct inference from the primary facts. It is no responsibility of the assessee to advise the ITO with regard to the inference which he should draw from the primary facts. If an ITO draws an inference which appears subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the AO of account books or other evidence from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure. 2. Briefly the facts are, assessee is a company deriving income from investment and dealing in securities. Assessee filed the return of income on 30/10/2005 for the year under consideration declaring loss of ₹ 2,30,08,266/-, which was duly processed u/s 143(1) of the Act. Subsequently, assessee s case was selected for scrutiny and an order u/s 143(3) was passed on 20/12/2007 determining the income at NIL after setting off of brought forward losses of ₹ 1,54,88,864/- and long term capital loss of ₹ 2,30,08,266/-. Subsequently, as per reasons recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal before the CIT(A). 3. As regards reopening of assessment, the assessee contended that reopening having been made merely on a change of opinion cannot be sustained. . It was contended that no new information was collected by the AO. Having examined the issue of set off of loss in course of the earlier proceedings u/.s 143(3), the AO could not reopen the case on reconsideration of very same facts and materials. 4. After considering the submissions of the assessee and referring to section 147 of the Act as well as analyzing and examining the issue in the light of various case laws, learned CIT(A) held that the reopening of the assessment by the AO is bad in law. The relevant findings of learned CIT(A) are as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if he has reason to believe that there is escapement of income or underassessment of income. However, proviso to section 147 mandates that in case of an assessment completed u/s 143(3) or section 147 of the Act reopening cannot be made after expiry of 4 years from the end of the relevant assessment year unless such escapement of income is attributable to failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of his assessment. In the light of aforesaid statutory provision it is to be decided whether initiation of proceeding u/s 147 of the Act on the present case is justified. On a perusal of the reasons recorded by the AO for forming belief that income has escaped assessment which is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from sale of shares and sale of property and computation of loss in the computation of income and statements furnished along with the return of income. The AO after examining all these facts and materials brought on record has allowed set off of loss while completing assessment u/s 143(3) of the Act. As can be seen the AO on re appreciation of very same material considered in the original assessment is of the opinion that set off of loss from sale of shares is not allowable against long term capital gain and gain derived from sale of property cannot be set off against carried forward business loss. In our view, reopening of assessment in the instant case is not only on a mere change of opinion but also amounts to review of the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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