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2015 (10) TMI 2112 - ITAT MUMBAI

2015 (10) TMI 2112 - ITAT MUMBAI - TMI - Reopening of assessment - undisclosed change in shareholding pattern - claim of set off of brought forward business loss and depreciation denied - Held that:- A perusal of the return of income in particular exhibit-5 shows that the details of share holders PAN was given by the assessee under the head other information. Under the head ‘Other information’ details of equity shares are provided and statement of set off of unabsorbed losses and allowances brou .....

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eopening of the assessment, in our considered opinion, there is no reference to any failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. There is not even a whisper of failure by the assessee to disclose material facts. Therefore, there is no valid ground for reopening the assessment. We, accordingly, set aside the notice issued u/s. 148 of the Act and also the impugned assessment order. - Decided in favour of assessee. - I.T.A. No. 6228/Mu .....

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tice u/s. 148 of the Act. It is the claim of the assessee that the said notice is bad in law and deserves to be cancelled. 2.1. The original return of income was filed on 16.11.2006 declaring total income of ₹ 3,26,052/-. The said return was selected for scrutiny assessment and the assessment was made u/s. 143(3) of the Act by order dated 10.12.2008 wherein the total assessed income under normal provisions of the Act was determined at ₹ 3,26,052/- and u/s. 115JB at ₹ 23,62,044/ .....

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sment was reopened by issuing of notice u/s. 148 of the Act. In response to the notice, the assessee requested the AO to treat the original return of income as having been filed in response to the notice u/s. 148 of the Act. 2.3. Reasons for reopening the assessment were supplied to the assessee. The assessee strongly objected claiming that the reassessment proceedings are barred by limitation. The assessee further claimed that the reopening is bad in law inasmuch as the reasons given for the re .....

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of the assessment is after 4 years of the completed assessment. The Ld. Counsel further stated that the reasons recorded by the AO for reopening of the assessment clearly show that it is nothing but a change of opinion because all the material facts were available before the AO when he made the original assessment u/s. 143(3) of the Act. The Ld. Counsel took us to the various exhibits of the Paper book to substantiate his claim that all the facts were available. 5. Per contra, the Ld. Department .....

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of a paper book. The relevant portion of the reasons recorded for the reopening of the assessment as exhibited at page-81, 82 of the paper book which read as under: While determining the income as above, an amount of ₹ 12,39,022/- & ₹ 3,86,327/- being brought forward business loss & unabsorbed depreciation for A.Y. 2004-05 & 2005-06 respectively was allowed to be adjusted against the income for A.Y. 2006-07. However, it is seen from the record that the share capital of th .....

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/- out of ₹ 3,86,327/- for A.Y. 2004-05 & A.Y 2005-06 respectively was not allowable as per Sec. 79 of the I.T. Act, 1961. 6.1. There is no dispute that the reopening is made after 4 years. Therefore, the first proviso to Sec. 147 of the Act is clearly applicable. The said proviso reads as under: Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the exp .....

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n: i) There should be a failure on the part of the assessee to make a return u/s. 139 or pursuant to notice u/s. 142(1) or Sec. 148 of the Act. ii) There should be a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. 6.3. In the light of the aforementioned provision, let us now see whether the assessee fulfills the criteria or not? In so far as the filing of the return of income is concerned, there is no dispu .....

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etails of equity shares are provided and at page-16, statement of set off of unabsorbed losses and allowances brought forward from earlier years is given. Once again all these details are mentioned in the exhibit at page-26, 27 and 29 of the paper book. At page-65 is the questionnaire issued by the AO and at item No. 2, the assessee was specifically asked to furnish the details of share holding pattern. The assessee filed the requisite details as per exhibit-66. The most relevant detail filed by .....

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10,00,000 6.6. A further notice was issued by the AO and once again the details in relation to the shareholders were called for. The said notice at page-69 of the Paper Book which was duly complied by the assessee as per its reply on page-72 of the Paper book. 6.7. As mentioned elsewhere pertaining to details in relation to the change in shareholding pattern was specifically explained as mentioned at para 6.5 of the order. Thus, the very material fact was available at the time of the original as .....

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