TMI Blog1972 (10) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. The question that is referred to us for determination is whether, on the facts and in the circumstances of the case, the Income-tax Officer was justified in reopening the assessments for the years 1955-56, 1957-58 and 1958-59 under section 34(1)(b) of the Act? The assessee is a registered firm doing business in yarn and also commission agency. The question for determination is confined to assessment years 1955-56, 1957-58 and 1958-59. The corresponding previous years are Samvat years 2010, 2012 and 2013. Up to and including S.Y. 2011, the assessee-firm had three partners, viz., Bhagwandas, Ramniklal and Vrajlal. For and from S.Y. 2012 the firm had six partners viz., Ramniklal, Vrajlal, Ishwarlal, Kumudchandra, Vinodchandra and Indula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the partners of the assessee-firm were also partners. No interest appears to have been charged from this account to the Agency firm. It is the case of the revenue that this fact has come to the notice of the officer while examining the account books for the year 1959-60. On the basis of this fact, a notice was issued under section 34(1)(b) of the Act to reopen assessment on the ground that certain income for the three years had escaped assessment. Before the Income-tax Officer on behalf of the assessee-firm, it was sought to be contended that the provisions of section 34(1)(b) were not attracted because there was no discovery of information on the basis of which such a notice to reopen assessment could be issued, That contention, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue and accepted the contention of the assessee-firm and set aside the supplemental orders of assessment passed for these three relevant years. Upon an application of the revenue, the Tribunal has referred the above question to this court for our determination. Mr. Joshi on behalf of the revenue has contended that merely because the statement of account for the relevant year of the Agency firm was filed before the Income-tax Officer, it cannot be said that while passing the original assessment orders, the Income-tax Officer consciously applied his mind to the facts disclosed therebv and to the inference to be drawn therefrom. He submitted that the assessee-firm had borrowed large sums of money and in respect of the said sums so borro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice under section 34(1)(b). The Division Bench in this case has taken the view that information within the meaning of section 34(1)(b) of the Act may be obtained by the Income-tax Officer from his own record but a mere change of opinion would not justify the reopening of the completed assessment. In this case, for the assessment of the assessee for the assessment years 1957-58 and 1959-60, the Income-tax Officer had accepted, as in previous years, the assessee's case that he held the shares of the company, Larsen Toubro, as investment and that the profits arising from the sale of the shares of that company were capital gains. The very same Income-tax Officer in his assessment proceeding of the assessee for the assessment years 1959 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sciously applied his mind to that data and he had co-related the various facts. In other words, he was not only aware of that data but he had realised its implications. It was, therefore, not open to him to fall back upon the same facts and circumstances and re-open the assessments. The only subsequent information which the Income-tax Officer had was that in later assessments he had himself taken a different view of the same facts. It was held that that would not justify the case for re-opening an assessment. The facts on the basis of which the assessment is sought to be re-opened are that the assessee-firm paid interest to various parties on the funds borrowed from them. That a part of the fund so borrowed was utilised in investment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that while passing the original assessment order, he put his tick mark upon the amount of the Agency firm for the first assessment year, viz., 1955-56. The putting of this tick disclosed that there was a conscious application of his mind by the Income-tax Officer when he passed the original assessment order. He knew very well then that no interest was charged to the Agency firm for each one of the three relevant years. Mere fact that in the subsequent year 1959-60 the Income-tax Officer took a different view for failure to charge interest to the Agency firm cannot result in discovery of information which would justify the issue of a notice under section 34(1)(b). All relevant facts and the inferences to be drawn therefrom were befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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