TMI Blog2016 (8) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... well reasoned order of the ld.CIT(A), in the light of various authoritative pronouncements, we are of the view that no interference is called in the order of the ld.CIT(A). Accordingly, appeal of the Revenue is dismissed. - ITA. No. 357/Ahd/2013 - - - Dated:- 14-6-2016 - Shri Rajpal Yadav, Judicial Member And Shri N. K. Billaiya, Accountant Member For the Revenue : Shri Kamlesh Makwana Sr.DR For the Assessee : Shri Deepak Shah, AR ORDER Per Rajpal Yadav, Judicial Member The Revenue is in appeal before us against the order of the ld.CIT(A)-III, Baroda dated 15.11.2012 passed for the Asstt.Year 2005- 06. 2. Solitary substantial ground of appeal raised by the Revenue is that the ld.CIT(A) has erred in quashing reassessment order. 3. Brief facts of the case are that the assessee has filed its return of income on 31.10.2005 declaring total income at NIL. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Act was issued and served upon the assessee. The ld.AO has passed the assessment order under section 143(3) of the Act on 31.12.2007. He determined the total income of the assessee at NIL and computed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,97,937/- whereas the assessee has worked out cost of land at ₹ 135,84 per sq. mts in the computation enclosed with the return of income. The rates applied by the assessee are incorrect. The cost of purchased land cannot be varied at different stages. Therefore, the indexed cost of saleable land is worked out as under:- ₹ 27,97,9377-X 4807 100 = 1,34,30,0977- Thanking into consideration the above working long term capital gain for the year under consideration is worked out as under:-; Sale Consideration Rs, 2,36,75,712/- Less Commission ₹ 11,43,577/- ₹ 2,25,32,134/- Less Index Cost. ₹ 1,34,30,097/- Capital Gain. ₹ 1,11,76,884/- Instead of offering capital gain of Rs, 1, 11,76, 884/-, the assessee has claimed long term capital loss of ₹ 15,80,642/- by inflating cost of purchase applying rates of ₹ 135.84 per sq. mts. instead of ₹ 80/- per sq.mts. as per valuer report 24.11.83. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f land sold during the Financial year 2004-05 comes to ₹ 5004810 (Land 36843 @ ₹ 135.84), and on indexation at 100 : 480 (Financial year 2004-05), the indexed cost of land sold comes to ₹ 24023089 (5004810 x 480 / 100). Thus company has loose a sum of ₹ 1490955 (22532134 - 24023089) and treated the same as Long Term Capital loss on account of sale of land. Now company has no land in its asset as on 31.03.2005. 5. The ld.CIT(A), thereafter, observed that the assessee was not failed in disclosing all the material facts fully and truly in respect of assessment of its income in this assessment year. Therefore, reopening of the assessment is bad in law. 6. Before us, the ld.DR contended that the assessee did not challenge reopening of the assessment order before the AO. Therefore, it is precluded to take any such grounds in appeal before the ld.CIT(A). 7. On the other hand, the ld.counsel for the assessee has relied upon the order of the ld.CIT(A). He further relied upon the following judgment of the Hon ble Gujarat High Court: i) Gujarat Lease Financing Ltd. Vs. DCIT, 36 taxmann.com 359 (Guj); ii) Patel Alloy Steel P.Ltd. Vs. ACIT, 35 tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f four years have expired from the end of the relevant Asst. Year then such escapement was due to failure on the part of the assessee- (i) to file a return u/s 139; (ii) to file a return in response to notice u/s 142(1) or section 148; (iii) to disclose fully and truly all material facts necessary for the assessment. All these aspects must come in the reasonings recorded by the AO. The reasons recorded by the AO should reflect (i) assessee in respect of whom assessment is sought to be reopened; (ii) assessment year as sought to be reopened; (iii) amount of income which has escaped assessment; (iv) how the original assessment has been done whether u/s 143(1) or u/s 143(3) or sec.147/148; (v) what is the reason of escapement of assessment; (vi) whether there is any failure as mentioned in the proviso if assessment is sought to be reopened after four years from the end of the relevant Asst. Year; (vii) in particular, whether there is any the failure of the assessee to disclose material facts fully and truly necessary for the assessment for that assessment year. (viii) if assessment is done u/s 143(1), then wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Court. We are of the view that the said decision is not applicable to the facts of the present case. In the said case, the Bombay High Court has held that the assessing authority has overlooked the disputed item which he has noticed subsequently and at the time of passing the original order of assessment, he could not be said to have opined on the above item. Therefore, there was no change of opinion. While in the present case, complete details were furnished along with the return and during the course of the assessment proceedings and after an application of mind, the deduction under section 36(1)(viii) of the Act was allowed. In the reason recorded no case has been made out that there was failure to disclose any material particular on the part of the assessee. Therefore, limitation beyond the period of four years was not available to the assessing authority. Admittedly, the notice was issued after four years, therefore, the proceeding was barred by time and the Tribunal has rightly held so. For the reasons stated above, the appeal fails and is dismissed. Hon. Bombay High Court, in the case of Bhavesh Developers vs. A.O. Others (2010) 329 ITR 249 (Bom), noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at of the ITO on the point as to whether action should be initiated for reopening of the assessment, but at the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and far fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. Hon. Supreme Court in the case of CIT vs. Kelvinator India Ltd. (2010) 320 ITR 561(SC), while dismissing the legislation of section 147, held that expression reasons to believe needs to be given schematic interpretation in order to ensure against an arbitrary exercise of power by the AO. The power to reopen the assessment is not akin to power to review the assessment and mere change of opinion would not justify the course of action u/s 147. Unless the AO has tangible material fact to reopen the assessment, power u/s 147 cannot be validly exercised. 9. In the present case there is a clear case of change of opinion. Even though reliance has been placed on the decision of Hon. Supreme Court in Ballimal Navalkishore and others vs. CIT (supra), that judgment existed at the time when the AO took the decision u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso pertinent to observe that notice under section 148 was issued upon the assessee after the expiry of four years from the end of the assessment year. The proviso appended to section 147 of the Income Tax puts an embargo upon the power of the AO to issue notice under section 148 in the cases, where, scrutiny assessment was made and four years have expired after the end of the relevant assessment year. He cannot issue notice in such cases unless it is established that income chargeable to tax has escaped on account of failure of the assessee to disclose all material facts fully and truly. A perusal of the reasons would nowhere show that the AO has made out his case exhibiting the fact that the assessee has failed to disclose any material particulars fully and truly regarding assessment of its income. The ld.CIT(A) has made a detailed analysis of the facts already disclosed by the assessee, and thereafter, recorded a finding that the AO has sought to reopen the assessment on the basis of change of opinion. After going through the well reasoned order of the ld.CIT(A), in the light of various authoritative pronouncements, we are of the view that no interference is called in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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