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TMI Blog2018 (9) TMI 1754X X X X Extracts X X X X X X X X Extracts X X X X ..... lated to the insufficient opportunity given by the Ld.CIT(A). Since the order was passed ex-parte by the Ld.CIT(A), the Ld.AR requested to remit the matter back to the file of the Ld.CIT(A) to decide the issue after giving one more opportunity. 4. We have gone through the Ld.CIT(A)'s order and observed that the Ld.CIT(A) has given more than six opportunities as recorded in the Ld.CIT(A)'s order. Therefore, we do not find any merit in the ground raised by the assessee hence this ground of appeal filed by the assessee is dismissed. 5. Ground No.3 is related to the issue of notice u/s 148 of Income Tax Act (hereinafter called as 'Act'). During the appeal hearing, the Ld.AR argued that the AO recorded the reasons for reopening the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est which is neither escapement of income nor the understatement of income. Therefore, the Ld.AR submitted that reassessment is bad in law on both the grounds and according to the Ld.AR, the notice issued u/s 148 is required to be quashed. 7. On the other hand, the Ld.DR supported the order of the Ld.CIT(A) and argued that from the scrutiny of the assessment order made u/s 143(3) dated 12.04.2010, there is no indication of having examined the issue of disallowance of interest for diversion of funds. Therefore, it cannot be viewed that the AO had examined the issue at the time of original assessment. Further, the Ld.DR submitted that the assessee had borrowed funds and paid huge interest and the funds in question were advanced as loans to M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Lotus Associates amounting to Rs. 60,00,000/- and Rs. 25,00,000/- respectively but neither charged the interest nor received the interest. Therefore, the AO held that having advanced huge funds without the disallowance of proportionate interest results into escapement of income which is required to be brought into tax u/s 148 of the Act. Therefore, the AO has given a clear view in the reasons recorded u/s 148 that the income chargeable to tax has escaped assessment which required to be reassessed. Therefore, the reasons recorded by the AO cannot be held as insufficient reasons as argued by the Ld.AR. The Ld.CIT(A) has upheld the validity of issue of notice after verifying the ITMR as well as the assessment record in para No.5.1 to 5.3 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval from competent authority had reopened the assessment to bring to tax the income which had escaped assessment. 5.2.1. There is no change of opinion as claimed by appellant in reopening of assessment. When there is no discussion on this issue in the original assessment order and no details were called for by the Assessing Officer or filed by the assesses on the issue, no finding either positive or negative was arrived at during the course of the original assessment proceedings, there is no question of change of opinion in such circumstances. The above decision was held in the following cases: (i) L.A. Firm Vs. CIT (Med) 102 ITR 622. (ii) Ess Kay Engineering Co. (P) Ltd. Vs. CIT (SC) 247 ITR 516. (iii) Revathy C.P. Equipments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the funds for non-business purposes by giving the loans and paying huge interest on borrowed funds and viewed that the proportionate interest required to be disallowed, hence, the AO held that there was escapement of income. Since the assessment is reopened within 4 years and the AO has given a clear reasoning for his belief, we uphold the validity of issue of notice u/s 148 and the order of the Ld.CIT(A) on this issue. The reasons recorded by the AO are sufficient to reopen the assessment. Accordingly, the appeal of the assessee on this ground is dismissed. 9. Ground No.4(a) is related to the disallowance of interest u/s 36(i)(iii) amounting to Rs. 3,00,000/- @12% on Rs. 25,00,000/- amounts advanced to Lotus Associates for purchase of lan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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