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Issues involved: Challenge to notice u/s 148 of the Income-tax Act, 1961 for reopening assessment year 1985-86 based on alleged suppression of material facts and change of opinion by the Assessing Officer.
Summary: The petitioner initially declared a total income of Rs. 5,000 for the assessment year 1985-86, later revising it to show a loss of Rs. 1,01,023. Following scrutiny u/s 143(3) of the Act, an assessment order was passed assessing income at Rs. 1,61,020, considering long-term capital gain and loss on the sale of silver. The petitioner claimed a long-term capital loss of Rs. 2,25,575 due to the sale of silver at a lower price than the cost indicated in the return. The petitioner's counsel argued that the notice u/s 148 was unjustified and time-barred, as the assessment order had been passed earlier and no material facts were suppressed. The Department contended that the interest paid on a loan for purchasing silver was incorrectly included in the cost, leading to an underassessment of income. The court found that the reasons for reopening the assessment indicated a change of opinion by the Assessing Officer, as the treatment of interest in computing capital gain was now being questioned despite being considered earlier. Since no material facts were suppressed and all necessary information was provided, the court quashed the notice u/s 148 for reopening the assessment year 1985-86.
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