TMI Blog2022 (12) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment concerned. The assessee in the present case furnished complete details in his letter dated 08.10.2014 during the assessment with respect to the transaction occured with Shubh Dristi Complex Pvt. Ltd.[alleged accomodation entry provider] - There was no omission on the part of the petitioner as to full and true disclosure for the year under consideration which were necessary for the assessment concerned. Thus it has to be held that the action of reopening by the AO was bad in law, mainly for the reason that it was passed on a mere change of opinion on the same set of facts, which was disclosed and considered by the assessing officer during the assessment year 2012-13. Decided in favour of assessee. - Honourable Mr. Justice N.V.Anjaria And Honourable Mr. Justice Bhargav D. Karia For the Petitioner(s) : Ms Vaibhavi K Parikh For the Respondent(s) : Mr.Mr Bhatt, Sr. Advocate With Mr. Karan Sanghani For M.R.Bhatt Co. CAV JUDGMENT (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) Heard learned senior advocate Mr. Tushar Hemani assisted by learned advocate Mr. Vaibhavi Parikh for the petitioner and learned senior advocate Mr. M.R. Bhatt for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sales. The assessee by letter dated 08.10.2014 furnished such details pertaining to shares sold during the year under consideration. The statement of details produced on record of the petition [page 22-24 (23)] reflected such details of sale of shares of both the Highlight Agencies Pvt. Ltd. and Imperial Barter Pvt. Ltd. to Shubhdristi Complex Pvt. Ltd. 3.4 When the assessment was framed under Section 143(3) of the Act by order dated 23.03.2015, the then assessing officer did not make any addition in respect transaction of sale of shares. The only disallowance made while framing assessment was under section 14A of the Act. 3.5 The assessee company challenged the assessment order before the Commissioner of Income Tax(Appeals). Before the appellate authority, calculation of revised disallowance under section 14A read with Rule 8D(2)(ii) was furnished. It was stated that the said working contained the details of opening and closing balance of shares held by assessee and the details of the aforesaid shares sold were also mentioned. The appellate authority by order dated 10.01.2018 held that only those investments, which yielded exempt income were liable to be considered for di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested in other regular business ventures of the actual purchaser. In some cases property was purchased using the realization. 3.6.3 It was stated that the aforesaid information was analysed and statement of Sri Praveen Agarval came to be recorded under section 132 of the Act on 22.12.2012. The details of the statement were reproduced in the reasons supplied to the petitioner to further state that on perusal of ledger account of Arihant Tradecom Pvt. Ltd. assessee company, in the books of Shubhdristi Complex Pvt. Ltd., it was noticed that Arihant Tradecom Pvt. Ltd. had received Rs.40,00,000/- from said Shubhdristi Complex Pvt. Ltd., which was a company associated with Sri Praveen Agarwal during financial year 2011-12. It was stated that the said Praveen Agarwal had admitted that no real business activities were carried out by his associated companies and that he was in the business of providing accommodation entries only. 3.6.4 The assessing officer therefore stated that transaction amounting to Rs.40,00,000/- was nothing but accommodation entry done by assessee company with Praveen Agarwal. It was concluded that as a result of the accommodation transaction, the assessee Arih ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed on 23.03.2015. It implied that, it was submitted, the information was already with the assessing officer which is now sought to be applied for reopening. 4.1.1 Learned senior advocate submitted that reopening was acted upon after a gap of 4 years and that there was no failure on the part of the assessee to disclose the material fully and truly. It was submitted that the action of reopening was based only on the change of opinion which is not permissible in law. 4.1.2 Learned senior advocate for the petitioner also pressed into service the doctrine of merger by submitting that the assessment order was carried in appeal before the Commissioner of Income Tax(Appeals) and revised working of disallowance under section 14A read with Rule 8D(2)(ii) was furnished before the appellate authority containing details of opening and closing balance of shares held by assessee. 4.1.3 Learned senior advocate relied on the decision of the Supreme Court in Assistant Commissioner of Income Tax vs. Radhaswami Salt Works in SLP (Civil) 42502/2017 decided on 16.03.2018, which confirmed the decision of the Division Bench of this Court in Radhaswami Salt Works v. Assistant Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations of Supreme Court in paras 20 and 21 of the said decision. It was submitted that the ratio in Phool Chand Bajrang Lal (supra) was reiterated by the decision of this Court in (i) Yogendrakumar Gupta vs. ITO - 366 ITR 186 (Guj)], (ii) Backbone Projects vs. ACIT - 437 ITR 144 (Guj) (iii) Kottex Industries (P) Ltd. vs. ACIT - 437 ITR 211 (Guj). 4.2.4 As regards the contention of the petitioner that the issue on which the reopening was sought to be effected had merged with the subject matter of appeal before the Commissioner of Income Tax (Appeals), learned senior advocate submitted that the concept of merger in light of the Third Proviso to section 147 of the Act came to be considered by this Court in Krishna Developers Company v. DCIT [400 ITR 260], it was observed that for applicability of this proviso and principle of merger flowing from such provision, what is necessary is that there has to be income involving matter, which is subject matter of appeal, reference or revision. 4.2.5 It was submitted that in the case on hand, the assessee had raised two contentions before the appellate authority. The first was in respect of validity of assessment framed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered during the assessment which included the aspect of sale of shares to Shubhdrishti Complex Pvt. Ltd., he put his hand on the very factual aspect and issued notice under section 148 of the Act seeking to reopen the assessment. 5.3 The action therefore of the assessing officer was in the nature of change of opinion only. He by proceeding for reopening of assessment acted to seek a roving inquiry in relation to the very facts and information considered by him earlier. It could not be said that there was any new tangible material available with the assessing officer. The material, which was noticed, was part of the material and facts already considered in the assessment proceedings and which could have been probed further by the assessing officer if the assessing officer was of such opinion, to ascertain and fix the tax liability on the assessee in that respect could not be classified as tangible material. 5.4 When the assessment proceedings were earlier undertaken and relevant material and information was called by the assessing officer from the assessee, the assessing officer had been carrying the onus to consider the said information from all angles to deal with it includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther decision relied on by learned senior advocate for the respondent would have no application. On facts, the case on hand is not the case where the assessee willfully made any false or untrue statement at the time of original assessment or that falsity has come to the notice, which may justify the assessing officer to exercise the powers. 5.7 The case is not only of reopening the completed assessment on the same facts without availability of fresh and tangible material, it was reopening acted upon beyond period of four years from the end of the relevant assessment year. The law requires, in such cases, that the reopening is permitted only if the assessee had not disclosed fully and truly all the material facts. There was no failure on the part of the petitioner (i) to make return under section 139 or in respect to notice under section 142(2) or under section 148 or that (ii) he had not disclosed fully and truly all material facts necessary for the assessment concerned. 5.8 The assessee in the present case furnished complete details in his letter dated 08.10.2014 during the assessment with respect to the transaction occured with Shubh Dristi Complex Pvt. Ltd. There was no om ..... X X X X Extracts X X X X X X X X Extracts X X X X
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