TMI Blog2007 (7) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by P.D. DINAKARAN, J. - The appeal has been preferred by the Revenue against the order dated 4.8.2006 made in I.T.A. No.1306/Mds/2004 passed with reference to the assessment year 1995-96 in favour of the assessee, raising the following substantial questions of law: "In the light of the first explanation to section 147 if the assessee did not truly act by bringing to the notice of the assessing officer the declaration of the value of the property which he has made in the wealth tax return, would not be discovery of the same amount to information afresh and in such circumstances, the assessing officer, whether or not is empowered to reopen the assessment within a period of four years from the end of the assessment year, the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticularly, when all the materials were placed by the assessee before the Assessing Officer and the same were examined before the passing of the original order dated 30.1.1998. 5. The Assessing Officer, by order dated 5.7.2001, rejected the contention of the assessee and came to the conclusion that there was an escaped assessment in view of the difference between the value of the property known as 'Baily Building' adopted for the purpose of allowing term capital gains, the income tax returns and the value of the property mentioned in the Wealth Tax returns. 6. Enraged, the assessee preferred an appeal before the Commissioner, who, by order dated 19.2.2004 accepted the case of the assessee and allowed the appeal holding that the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which reads as follows: "147. Income escaping assessment: - If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the materials placed before him and passed an order of assessment under the Income Tax Act as well as Wealth Tax Act and thereafter, by change of opinion with reference to the valuation method adopted, proposed to reopen the assessment. 12. It is a settled proposition vide the decision of a Division Bench of the Calcutta High Court in Hela Holdings P. Ltd. v. Commissioner of Income Tax [(2003) 263 ITR 129] that the assessee is entitled to change his regular method of accounting by another regular method. It would be open to the assessee to produce records and show that it had followed such changed accounting method in the subsequent years. In the said decision, the Calcutta High Court also laid the following general prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, so as to cause the possibility of a reduction of tax incidence, can fairly be permitted to the assessee, as a genuine and legal means of tax reduction, employed by it in a commercial fair sense, or whether allowing the assessee to earn the reduction, in the facts and circumstances of the particular case, is opposed to the public policy of not encouraging citizens to engage themselves in dealings and transactions designed primarily for the purpose of non-payment of tax only. (emphasis supplied) 13. A Full Bench of the Delhi High Court in Commissioner of Income Tax v. Kelvinator of India Ltd. [(2002) 256 ITR 1), interpreting the powers of the Income Tax Officer with respect to reassessment, held that a mere change of opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of wealth tax did not stop him from contending otherwise in the proceeding for calculating tax on capital gains, because adoption of certain value for wealth tax purpose cannot be made on the basis for working out the capital gains, particularly when the valuation of the property admitted by the assessee in the income tax return and the wealth tax return were accepted by the Assessing Officer and therefore, there cannot be any reassessment based on mere change of opinion by the Assessing Officer. 16. Incidentally, an attempt was also made on behalf of the Revenue that the Tribunal ought not to have held that the reopening of assessment was not in order, as the finding of the Commissioner that reopening of assessment was held to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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