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2015 (2) TMI 1267

f expenditure. Reopening the assessment on the very same set of facts which were very much available at the time of the original assessment proceedings is nothing but a change of opinion. In our considered opinion one needs to give a schematic interpretation of the words “ reason to believe” failing which, section 147 would give arbitrary powers to the AO to reopen the assessment on the basis of “mere change of opinion”, which cannot be per se reason to reopen. There is conceptual difference between power to review and power to reassess. The AO has no power to review, he has the power to re-assess. But assessment has to be based on fulfillment of certain conditions and if the concept of “change of opinion” is removed, then, in the garb of r .....

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y had claimed deduction of ₹ 3,39,96,92,465/- as Misc. Expenditure. This amount was not passed to the P&L A/c. The AO disallowed only ₹ 2,42,22,50,540/- on account of issue expenses on rupee loan/debenture/fixed deposits and foreign currency loan and balance amount of ₹ 97,74,41,925/- remained to be disallowed. As this expenditure was not routed through the P&L A/c. the same was not subjected to scrutiny of the statutory auditors of the assessee company nor the relevant evidences for allowability of the same were submitted before the assessing officer for proper verification. 2.1 Thereafter, the assessee attended the proceedings and replied to the queries of the AO. After considering replies filed by the assessee, .....

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12, I have no hesitation to hold that reopening of assessment is merely based on change of opinion in the appellant s case, which is not based on any tangible material in the possession of the A.O. Hence, in this background of the appellant s case, I consider it proper and appropriate to hold that reopening of original assessment, which was passed by the A.O. is not justified. Hence the reassessment order passed by the A.O. u/s 143(3) r.w.s 147 is annulled. Thus, appellant s this ground of appeal is allowed. 3. Aggrieved by this the Revenue is before us. Ld. DR strongly supported the assessment order. 4. Ld. Counsel for the assessee reiterated what has been submitted before lower authorities. 5. In the notes forming part of accounts it is p .....

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on. In our considered opinion one needs to give a schematic interpretation of the words reason to believe failing which, section 147 would give arbitrary powers to the AO to reopen the assessment on the basis of mere change of opinion , which cannot be per se reason to reopen. There is conceptual difference between power to review and power to reassess. The AO has no power to review, he has the power to re-assess. But assessment has to be based on fulfillment of certain conditions and if the concept of change of opinion is removed, then, in the garb of reopening of assessment, review would take place. Hon ble Supreme Court in the case of CIT vs.Kelvinator of India India, 320 ITR 561 has held that the AO must have some tangible material for .....

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