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TMI Blog2016 (7) TMI 1592X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 (for brevity the Act). 2. Heard Mr. J.V. Prasad, learned senior standing counsel for the Income Tax Department, appearing for the appellant. 3. The respondent herein is a super speciality hospital. For the assessment year in question, they filed a return of income on 29.10.2004 declaring a loss of Rs. 8,01,95,180/-. The return was processed under Section 143(1) of the Act. 4. Subsequently, there was a search and seizure operation under Section 132, as a consequence of which, proceedings were initiated under Section 153A. The assessment was completed under Section 143(3) r/w Section 153A. After completion of the assessment, the Assessing Officer reopened the assessment under Section 147 by issuing a notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. Vs. ITO (236 ITR 34)(SC) wherein it was held that in determining the validity of re-assessment proceedings, it has only to be seen whether there was prima facie material, on the basis of which, the department could reopen the case? 3) Whether on facts and circumstances of the case, the Honble ITAT is justified in upholding the order of the CIT(A) deleting the disallowance made by the AO, on the ground that the assessee has not claimed any depreciation on the interest capitalized against the assets, without appreciating that the assessee wrongly calculated the interest payable on the share application money refunded and that the interest incurred, related to assets acquired, was capitalized and therefore, cannot be allowed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction before the Assessing Officer of the books of account or other evidence, from which material evidence could, with due diligence, have been discovered by the Assessing Officer, will not necessarily amount to disclosure within the meaning of the first proviso to Section 147. But the material fact, which forms the very basis for the Assessing Officer to complete the assessment, cannot be totally ignored by the Assessing Officer, enabling him to take refuge under Explanation-I. 13. If we look at the case on hand, it is seen that the original assessment was completed under Section 143(1), after the assessee filed a return of income on 29.10.2014. Thereafter, there was a search and seizure operation under Section 132, leading to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the details placed by the assessee before the AO was in conformity with the requirements of all applicable laws and known accounting principles, and materials details had been exhibited before the AO, it is for the AO to reach such conclusions as he considered was warranted from such data and any failure on his part to do so cannot be regarded as assessee's failure to furnish the material facts truly and fully. Any lack of comprehension on the part of the AO in understanding the details placed before him cannot confer a justification for reopening the assessment, long after the period of four years had expired. On the facts of this case, it is clear that the escapement of income if any on this account is not on account of any failure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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