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M/s. M. Sayarchand Mehta (HUF) Versus Income Tax Officer Ward–18 (3) (3)

2015 (9) TMI 1417 - ITAT MUMBAI

Validity of reopening of assessment - Held that:- On a perusal of the reasons recorded, it is very much evident that the Assessing Officer only upon revisiting the Balance Sheets filed with the original return of income and revised return of income, had formed the belief that there is under assessment of income. It is patent and obvious that no new material has come to the possession of the Assessing Officer after completion of the original assessment under section 143(3) of the Act. The Balance .....

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rom the reasons recorded that there is no such material available before the Assessing Officer while he recorded his reasons for re–opening the assessment. That being the case, the re–opening of assessment on re–appreciation / review of same set of facts and material which were available at the time of completing assessment originally under section 143(3) of the Act, tantamounts to change of opinion, hence, not permissible in law. In view of the aforesaid, we hold that re–opening of assessment u .....

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aised following grounds:- 1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the action of the Assessing Officer of re-opening the assessment proceedings under section 148 of the Act which is bad-in-law and void-ab-initio. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the addition of the Assessing Officer of applying the provision of section 68 of the Act in the impugned case in respect o .....

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eclaring total income of 60,160. In the course of assessment proceedings, the Assessing Officer, on the basis of AIR information, found that the assessee had deposited 73,03,000 in Corporation Bank, Shivaji Park Branch, Mumbai, till 29th March 2005. He, therefore, called upon the assessee to explain the nature of such deposits. In response to the query raised by the Assessing Officer, the assessee explained the sources of deposits in the bank account vide letter dated 17th December 2007. It was .....

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e order dated 26th December 2007, accepting the income declared in the revised return of income. Subsequently, the Assessing Officer re-opened the assessment under section 147 of the Act on the reason that in the Balance Sheet filed with the original return of income, the assessee has shown cash at hand at 18,375, whereas, in the Balance Sheet filed along with the revised return of income, cash at hand shown by the assessee is at 19,33,288. The Assessing Officer, therefore, formed a belief that .....

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n the original return of income filed on 30th August 2005 and in the return of income filed in response to notice under section 148, the assessee has shown cash balance of 18,375, whereas in the revised return of income filed on 19th December 2007, the cash balance shown by the assessee was of 19,33,288=50. In response to the query raised by the Assessing Officer, though, it was submitted by the assessee that a mistake was committed while preparing the Balance Sheet as a result of which cash bal .....

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ot only the validity of the proceedings initiated under section 147 of the Act but also the merits of the addition made under section 68 of the Act. As far as the legal issue relating to the re-opening of assessment is concerned, learned CIT(A) dismissed the ground raised by the assessee by observing that when the Assessing Officer has reason to believe that the assessee s income has escaped assessment by reason of either omission or failure on the part of the assessee to disclose fully or truly .....

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ment, submitted before us, there was no fresh tangible material before the Assessing Officer for re-opening the assessment. He submitted, on the basis of the very same material on which the assessment under section 143(3) of the Act was completed originally, re-opening of assessment is nothing but a change of opinion. Further elaborating, he submitted, when the Assessing Officer, while completing the original assessment, has considered the assessee s original as well as revised return of income .....

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v/s DCIT, ITA no.4613/Mum. /2005, order dated 12th May 2010; and iv) CIT v/s Kelvinator of India Ltd., [2010] 320 ITR 561 (SC). 6. The learned Departmental Representative, on the other hand, relied upon the reasoning of the first appellate authority. 7. We have considered the submissions of the parties and perused the material available on record. At the outset, it needs to be clarified, in the present case, re-opening of assessment under section 147 of the Act was made on 28th May 2008, which .....

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d for re-opening the assessment which reads as under:- REASONS FOR REOPENING THE ASSESSMENT In this case the assessee has filed original return of income on 30.08.2002 for A.Y. 2005-06 declaring total income at 60,160. The return was processed under section 143(1) of the I.T. Act on 30.01.2006. I hereafter assessee filed revised return of income on 19.12.2007, declaring total income at 52,49,796. The assessment under section 143(3) was completed on 26.12.2007, assessing total income at 52,49,796 .....

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Explanation 2 to section 147 of the I.T. Act. Thus, this is a case of deemed income escaping assessment. On a perusal of the reasons recorded, it is very much evident that the Assessing Officer only upon revisiting the Balance Sheets filed with the original return of income and revised return of income, had formed the belief that there is under assessment of income. It is patent and obvious that no new material has come to the possession of the Assessing Officer after completion of the original .....

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