TMI Blog2014 (1) TMI 1896X X X X Extracts X X X X X X X X Extracts X X X X ..... t proviso to section 148 of the Act makes it clear that in case the reopening is made beyond four years from the end of the relevant assessment year, it can be only resorted to in case of failure on assessee s part in disclosing fully and truly all material facts necessary for assessment. Undisputedly, this failure is nowhere pinpointed in the assessment order. In these circumstances, we observe that not only the impugned reopening is mere change of opinion on the part of the Assessing Officer qua legal and professional expenses, but also it is hit by first proviso to section 148 as there is no failure on the assessee s part in disclosing truly and fully all necessary particulars. Hence, on both these counts, we hold the reopening as not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tially, the same was summarily processed. Thereafter, the Assessing Officer framed regular assessment admitting the aforesaid income vide order dated 11.8.2006. 5. In the enclosures filed with the return, the assessee had declared interest income of ₹ 58,91,001/- from business alongwith corresponding expenses of ₹ 29,33,621/-. It had also claimed legal and professional expenses of ₹ 11,27,000/-. After finalization of assessment, the Assessing Officer formed an opinion that assessee s income from interest deserved to be treated as that from other sources. Qua expenses, he was of the view that since the same had been incurred on loans borrowed for acquisition activity in Cochin Malabar Estates and Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of pre-operative in nature. Therefore, notice u/s 148 dated 28.3.2011 was issued and served on the assessee. The Assessing Officer also dealt with the objections raised by the appellant after issue of notice u/s 148. The Assessing Officer was relying on the provisions of Section 147 particularly explanation 2(c)(iv). This deals with excessive loss of depreciation allowance or any other allowance. This does not speak of excessive expenses claimed by the assessee or income offered under wrong head of income. It has to be stated here that the original assessment by the Assessing Officer was completed after examination of all the details. 7. As seen from the original assessment order, dated 11th August, 2006, the Assessing Officer stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. This clearly shows that the Assessing Officer has only changed his opinion without any basis. It cannot be said that the income chargeable to tax has escaped assessment by reason of omission or failure on the part of the assessee to disclose and truly all material facts. The Hon'ble Supreme Court of India in the case of CIT Vs Kelvinator of India Ltd - 320 ITR 561 (SC) held that the Assessing Officer has power to reopen, provided there is tangible material to come to conclusion that there is escapement of income from assessment. Mere change of opinion cannot be a basis for reopening of assessment. Further the hon'ble High Court of Delhi (Full Bench) in the case of CIT Vs Usha International Limited (25 Taxman.com 200) held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resorted to in case of failure on assessee s part in disclosing fully and truly all material facts necessary for assessment. Undisputedly, this failure is nowhere pinpointed in the assessment order. In these circumstances, we observe that not only the impugned reopening is mere change of opinion on the part of the Assessing Officer qua legal and professional expenses, but also it is hit by first proviso to section 148 as there is no failure on the assessee s part in disclosing truly and fully all necessary particulars. Hence, on both these counts, we hold the reopening as not sustainable in the eyes of law. The Revenue s arguments accordingly fail and the impugned findings of the CIT(A) are confirmed. 9. The Revenue s appeal is dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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