TMI Blog2019 (4) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... y assessee is thus, allowed. - ITA No.1100/PUN/2016 - - - Dated:- 4-4-2019 - Ms. Sushma Chowla, JM And Shri Anil Chaturvedi, AM For the Appellant : Shri Nikhil Pathak For the Respondent : Shri Ashok Babu ORDER PER SUSHMA CHOWLA, JM: The appeal filed by assessee is against order of CIT(A), Pune-5, Pune, dated 18.03.2016 relating to assessment year 2007-08 against order passed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- On the facts and circumstances of the case and in law : 1. The AO erred in reopening the case and passing order u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 holding that license fees of property ₹ 47,52,000 declared by the appellant in his return and assessed u/s 143(3) under the head Income from House Property ought to be taxed under the head Income from Other Sources / Miscellaneous Income. The appellant pleads that the AO has merely changed his opinion on the same set of facts and that the issue of notice u/s 148 and reassessment u/s 147 is not justified and valid. 2. The AO erred in assessing License Fees recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst Income from house property declared by assessee. The assessee in reply, stressed that as per Leave License Agreement, license was paid monthly on which tax was deducted under section 194I of the Act and hence, income should be assessed as Income from house property . The Assessing Officer noted that the building which has been given on license is part of stock-in-trade of assessee and therefore, receipts from the same should have been offered as Income from other sources . The Assessing Officer then, accordingly, assessed the same under section 56 of the Act. 5. The CIT(A) has upheld the order of Assessing Officer. 6. The assessee is in appeal against the order of CIT(A). 7. The learned Authorized Representative for the assessee pointed out that original assessment order was completed under section 143(3) of the Act and within period of four years, assessment proceedings have been reopened in the case of assessee. He admitted that during the assessment proceedings no query was raised on rental income declared by assessee. However, he stressed that reopening is based on no tangible material found. So, in the absence of any new tangible material, reopening of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) was completed on 27.12.2009. It is seen that the assessee is in business of construction of building under proprietary concern M/s. Malikram Builders. The assessee is following work completion method and entire work done was shown in stock in trade. No sales were also made during the relevant year. However, the assessee has earned license fee on this projects amounting to ₹ 47,52,000/- from M/s. Jusko inn (as per agreement] dated 15.09.06 for 60 months. The said receipt was offered under income from house property and claimed deduction at the rate of thirty percent which is not correct because the same is kept in stock-in-trade, this receipt is not covered under 'business income' as the project is not completed. Hence, this receipt should have been taxed under the head income from other sources/misc. income' and thirty percent of deduction of ₹ 14,25,600/- claimed by the assessee needs to be withdrawn. Therefore, an amount of ₹ 14,25,600/- has escaped assessment which needs to be taxed by reopening the assessment u/s. 147 of the I.T. Act, 1961. In view of the above, I have reason to believe that an amount of ₹ 14,25,600/- has escaped assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment Co. (P.) Ltd. Vs. JR. Kanekar, DCIT (2004) 271 ITR 269 (Bom). In both the cases, assessment was completed by way of intimation under section 143(1) of the Act and it was observed that in both the cases, the Hon'ble Apex Court reiterated that where the assessment has been completed by intimation under section 143(1) of the Act, there can be no question of change of opinion. This is the first finding of the Hon‟ble Apex Court in both the decisions which has been referred by the Hon‟ble Bombay High Court in Khubchandani Healthparks (P.) Ltd. Vs. ITO (supra). Then, the Hon‟ble High Court goes on to observe that the Hon‟ble Apex Court in DCIT Vs. Zuari Estate Development Investment Co. Ltd. (supra) has not dealt with the issue whether before invoking provisions of section 148 of the Act, the Assessing Officer must have reason to believe that income chargeable to tax has escaped assessment, where the original assessment was completed by intimation under section 143(1) of the Act. The Hon‟ble High Court further observed that the Revenue was trying to infer that because Hon‟ble Apex Court in DCIT Vs. Zuari Estate Development Investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 143(1) of the Act. In the above case, the Apex Court held that a Notice for reopening an assessment under Section 148 of the Act could only be justified if the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment. This decision of the Supreme Court in Rajesh Jhaveri Stock Brokers P. Ltd. (Supra) has not been disturbed by the Apex Court in Zuari Estate Development and Investment Co. Ltd. (Supra). In fact, the Supreme Court in Zuari Estate Development and Investment Co. Ltd. (Supra) makes a specific reference to its decision in Rajesh Jhaveri Stock Brokers P. Ltd. (Supra) to hold that where the assessment has been completed by Intimation under Section 143(1) of the Act, there can be no question of change of opinion. 4. We further find that the Apex Court in Zuari Estate Development and Investment Co. Ltd. (Supra) has not dealt with the issue whether before invoking Section 148 of the Act, the Assessing Officer must have reason to believe that income chargeable to tax has escaped assessment, where the original assessment has been completed by Intimation under Section 143(1) of the Act. The Revenue is trying to infer that because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8223;ble Bombay High Court which is the jurisdictional High Court in Khubchandani Healthparks (P.) Ltd. Vs. ITO (supra) while deciding the issue of case where assessment was completed by way of intimation issued under section 143(1) of the Act had held that the Assessing Officer must have reason to believe that income chargeable to tax had escaped assessment. It was also clarified by the Hon‟ble High Court that the Hon‟ble Apex Court in ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) had laid down the law on the point that even in cases where intimation under section 143(1) of the Act was issued sine qua non to issue reopening notice is reason to believe that income chargeable to tax has escaped assessment. In case of absence of reason to believe even where assessment was earlier completed by issue of intimation under section 143(1) of the Act, it was open to the petitioner to challenge notice issued under section 148 of the Act. Such proposition has been laid down by the Hon‟ble High Court vide its judgment dated 10.02.2016. 21. Similar is the proposition which has been laid down by the Mumbai Bench of Tribunal in Third Member decision in Telco Dadaje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order. Thus, it held that no re-opening notice can be issued which is premised on a change of opinion. It further goes on to hold that before interference with a proposed reopening of the assessment, the Court should verify whether the assessment order made earlier has expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. Infact, in this case we find that the assessment orders passed in regular assessment proceedings do refer to examining the computation of income filed alongwith the Return of Income. Moreover, the Assessment order in regular assessment proceedings in terms disallowed some of the claims made for deduction under Section 143(3) of the Act. Therefore, in the present facts, we are prima-facie of the view that, the Assessing Officer has by necessary implication allowed the claim. Moreover, the basic document for completing the assessment under Section 143(3) of the Act is the computation of income. Therefore, to the extent the claims made for deduction in the computation of come, were disallowed by the Assessing Officer, discussion on the same is found in the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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