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TMI Blog2019 (4) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s 148 and reassessment u/s 147 is not justified and valid. 2. The AO erred in assessing License Fees received Rs. 47,52,000 under the head 'Income from Other Sources‟ when it was charged, declared and assessed under the head Income from House Property in the order u/s 143(3) dated 27.12.2009 of Income Tax Act. 3. Without prejudice the appellant pleads that License Fees Received Rs. 47,52,000 was assessable under the head Profits & Gains of Business or profession of proprietary concern M/s. Malikram Builders. 4. The AO erred in disallowing claim for exemption of Rs. 3,06,71,330 u/s 54F of the IT Act on grounds that the assessee had invested sale proceeds of capital assets under the Capital Gains Account Scheme beyond the due date of return u/s 139(1). The appellant pleads that the investment made on 25.09.2007 was within the due date of filing of return i.e. 30.09.2007. The appellant pleads that its claim for exemption u/s 54F is valid and allowable. 5. Without prejudice the assessee's claim for exemption u/s 54F was valid as investment was made within the due date of filing return u/s 139(4). 6. The Hon CIT(A) erred in holding that the assessee had reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So, in the absence of any new tangible material, reopening of assessment is not valid. He further pointed out that the view taken by Assessing Officer that rental income received from unsold flats was to be taxed as 'Income from other sources' was directly opposite to the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. Sane & Doshi Enterprises (2015) 58 taxmann.com 111 (Bom). The learned Authorized Representative for the assessee then stressed that in the absence of any tangible material, no re-assessment was possible. In this regard, he placed reliance on the decision of Pune Bench of Tribunal in DDIT Vs. Sandvik AB in ITA Nos.608/PUN/2014 & 623/PUN/2014, relating to assessment years 2006-07 & 2005-06, respectively, along with CO Nos.20/PUN/2015 & 28/PUN/2015, order dated 05.06.2018 and the Hon'ble Bombay High Court in State Bank of India Vs. ACIT in Writ Petition No.271 of 2018 along with Writ Petition No.278 of 2018, judgment dated 15.06.2018. In respect of grounds of appeal No.2 and 3, the learned Authorized Representative for the assessee pointed out that the issue is however, decided in favour of assessee. The ground of appeal No.4 raised by assessee is against d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs. 14,25,600/- has escaped assessment and the same is being reopened by issue of notice u/s. 148 of the I.T. Act, 1961. The approval of Addl. CIT-II has been received for reopening of the assessment for A. Y. 2007-08." 10. The perusal of said reasons recorded for reopening the assessment do not reflect any new material coming to the knowledge of Assessing Officer. He has relied upon income declared by assessee on account of license fees, which was offered under the head 'Income from house property'. In the absence of the same, the question which arises is whether the Assessing Officer has jurisdiction to reopen the assessment by issue of notice under section 148 of the Act. 11. The Pune Bench of Tribunal in the case of DDIT Vs. Sandvik AB (supra) has adjudicated similar issue of absence of tangible material in turn, relying on the ratio laid down in M/s. Sandvik Tooling Sverige AB Vs. DDIT (IT) in ITA No.466/PUN/2015, relating to assessment year 2008-09 and in ITA Nos.487 & 488/PUN/2016, relating to assessment year 2007-08 & 2009-10, order dated 21.12.2017 and had held as under:- "19. The Tribunal while deciding the issue had referred to the earlier decision in Sandvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Zuari Estate Development & Investment Co. Ltd. (supra) had set aside the order on this count and restored the issue to be decided on merits by the Tribunal, it must be inferred that the Hon‟ble Apex Court had come to the conclusion that reason to believe was not necessary for issuing re-assessment notices where regular assessment was completed under section 143(1) of the Act. Vide para 5, the Hon‟ble High Court in Khubchandani Healthparks (P.) Ltd. Vs. ITO (supra) reiterates that the decision of the Court had to be read in the context of the facts involved therein and not on the basis of what logically flows therefrom. The Hon‟ble High Court further holds that the Hon‟ble Apex Court in DCIT Vs. Zuari Estate Development & Investment Co. Ltd. (supra) not having dealt with the issue of reason to believe that income chargeable to tax has escaped assessment on the part of Assessing Officer in cases where regular assessment was completed by intimation under section 143(1) of the Act, in categorical terms held it would not be wise for us to infer that the Supreme Court in Zuari Estate Development & Investment Co. Ltd. (supra) has held that the condition prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is trying to infer that because the Apex Court in Zuari Estate Development and Investment Co. Ltd. (Supra) has set aside the order of this Court and restored the issue to be decided on merits by the Tribunal, it must be inferred that the Apex Court had come to the conclusion that reason to believe was not necessary for issuing reassessment Notices where the regular assessment was completed under Section 143(1) of the Act. As rightly pointed out by Mr. Pardiwalla, it can equally be inferred that the Apex Court in the above case had come to the conclusion that there is reason to believe that income had escaped assessment and consequently restored the issue to the Tribunal to decide the reassessment proceedings on merits. 5. It is settled position in law that the decision of the Court has to be read in the context of the facts involved therein and not on the basis of what logically flows therefrom as held by the Supreme Court in Ambica Quarry Works Vs. State of Gujarat, 1987(1) SCC 213. The Apex Court in Zuari Estate Development and Investment Co. Ltd. (Supra)not having dealt with the issue of reason to believe that income chargeable to tax has escaped assessment on the part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in Telco Dadajee Dhackjee Ltd. Vs. DCIT (supra), wherein the argument was that if no opinion was formed by the Assessing Officer when return was merely processed under section 143(1) of the Act by issuing notice under section 148 of the Act, he could not be said to have changed his opinion. The Third Member held that so far so good and further held that but it needed to be remembered that section 147 of the Act applies both to section 143(1) as well as section 143(3) of the Act, then it was still open to assessee to challenge notice on the ground that there was no reason to believe that income chargeable to tax had escaped assessment. The Third Member had elaborated upon the issue and referred to the decision of the Hon‟ble Apex Court in ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) and held thus fulfillment of conditions of section 147 of the Act, including the one that there should be reason to believe is essentially for the validity of notice issued under section 148 of the Act. Further, reference was made to the judgment of Hon'ble Supreme Court in later judgment in CIT Vs. Kelvinator of India Ltd. (supra), wherein it has been held that there should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found in the assessment order. It is an accepted position that the assessment orders would necessarily deal only with the claims being disallowed and not with the claims being allowed. This is for the reason as observed by the Gujarat High Court in CIT Vs. Nirma Chemicals Ltd 309 ITR 67, that if the Assessing Officer was to deal with all the claims which were to be allowed in the assessment order, the result would be an epictome. This is so, as it would cast an impossible burden upon the Assessing Officer considering his workload and the period of limitation. There was also no reason in the present facts for the Assessing Officer to ask any queries in respect of this claim of the petitioner, as the basic document viz. computation of income at note 21 (Assessment Year 2013-14) and note 22 (Assessment Year 2014-15) thereof explained the basis of the claim being made to the satisfaction of the Assessing Officer. Thus, it must necessarily be inferred that the Assessing Officer has applied his mind at the time of passing an assessment order to this particular claim made in the basic document viz. computation of the income by not disallowing it in proceedings under Section 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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