TMI Blog2018 (1) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case. In conclusion we hold that there is no merit in this appeal by the revenue and the order of CIT(A) does not suffer from infirmity. Order of CIT(A) is therefore confirmed and the appeal of the revenue is dismissed. - ITA No.81/Kol/2015 - - - Dated:- 18-8-2017 - Shri N.V.Vasudevan, JM And Shri M.Balaganesh, AM For The Appellant : Shri Anand R.Baiwar, CIT For The Respondent : Shri N.K.Poddar, Sr. Advocate ORDER PER N.V.VASUDEVAN, JM: This is an appeal by the Revenue against the order dated 27.10.2014 of CIT(A)-VI, Kolkata, relating to AY 2002-03. 2. Grounds of appeal raised by the Revenue read as follows :- 1. That on the facts and in the circumstances of the case, the C.I.T (A) erred as on facts as well as in law in holding that the case was reopened on the basis of change of opinion, ignoring the fact that the issue on which the case was reopened was not considered in the original assessment, and as such, reopening of the cases was valid as decided by the Bombay High Court in the case of Yuvraj Vs Union of India (315 ITR 84). 3. That the appellant craves leave to add, alter, or withdraw any ground or grounds of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of which is placed at page 33 of the assessee s paper book in which there was a doubt raised as to whether the diminishing value of investment was capital in nature and ought not to have been allowed as a revenue expenditure while computing the business income of the assessee. This revenue audit objection does not bear any reference as having been raised consequent to the CAG report. 6. While the matter stood thus, the AO issued notice u/s 148 of the Act to the assessee dated 09.09.2008. The said notice was duly served on 11.09.2008. The reasons recorded by the AO. The reasons recorded by the AO before issuing notice u/s 148 of the Act making an assessment u/s 148 are as follows :- Reasons to believe: On perusal off records, it is noticed that the assessee has debited its P/L account by ₹ 65001073/- under the head of Investment Written Off' - which the assessee has failed to add back in the computation of income While submitting his return of income for the assessment year 2002-03 the assessee has himself disallowed Investment written -off and added back in its computation of income. The investment written off is capital -in-nature and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.50 lakhs should be added to the total income of the assessee. 10. Aggrieved by the order of AO the assessee preferred appeal before CIT(A). 11. Before CIT(A) the assessee challenged the validity of initiation of reassessment proceedings. It was contended that while concluding the original assessment proceedings u/s 143(3) of the Act, the nature of diminution in value of investments which was claimed as deduction while computing the income from business, was duly examined by the AO and the assessee furnished all the details and the AO did not think it fit to disallow the claim of the assessee for deduction of the aforesaid sum as revenue expenditure. The assessee therefore submitted that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and therefore initiation of re-assessment proceedings beyond the period of four years from the end of the relevant previous year was not valid in view of the first proviso to section 147 of the Act. The assessee also submitted that the reassessment proceedings have been initiated by the AO purely on the basis of change of opinion and in this regard the assessee placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the assessee, had not raised query or elicit answers, it cannot be stated that merely because of the fact, that the assessing officer did not reject such a claim in the final order of assessment, he should be deemed to have expressed an opinion with reference to such claim. However, in the same decision (which, as a matter of fact, was against revenue), it has also been held, that if the assessing officer, in course of assessment proceedings, makes a query on certain claim and thereafter does not make addition, he can be stated to have formed opinion. In the appellant's case, on the other hand, reopening is after lapse of period of four years and the original assessment had been made under section 143(3). Moreover, a specific query had been raised on the issue by the assessing officer at the time of original assessment. Therefore, the ratio given by the Gujarat High Court in the case of Gujarat Power Corporation Ltd. (supra) in fact goes in favour of the appellant. The decision in the case of Sun Engineering Works Pvt. Ltd. (supra) cited by the assessing officer only clarified the scope of reassessment once an assessment has been validly reopened. However, this decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se with the case decided by the Hon ble Bombay High Court. As we have already explained that the CIT(A) in the present case held that initiation of reassessment proceedings was not valid in view of the first proviso to section 147 of the Act as the assessment of the assesse was sought to be reopened after a period of four years from the end of the relevant assessment year and an order of assessment u/s 1543(3) of the Act for the relevant assessment year has already been completed by the AO. The CIT(A) also came to the conclusion that there was no failure on the part of the assessee to fully and truly disclose all the material facts necessary for assessment of that assessment year. We are therefore of the view that there is no merit in the stand taken by the revenue in the grounds of appeal which was also the basis of submissions made by the revenue before us. Another aspect submitted by the ld. DR was that while concluding the assessment u/s 143(3) of the Act, the AO had not expressly dealt with the issue of allowability of deduction on account of diminishing in value of investments. We are of the view that this argument of the ld. DR is also without any merit. The Hon ble Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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