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TMI Blog2014 (11) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... fect that the assessee had failed to fully and truly disclose all material facts necessary for the assessment, it is evident that the reasons for reopening are based on the assessment records - there was no failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment, for the relevant AY - The jurisdictional condition for reopening an assessment beyond four years has hence not been fulfilled - the reopening of the assessment is contrary to law since the requirement of the proviso to Section 147 has not been fulfilled – Thus, the notice for reopening of assessment to be set aside – Decided in favour of assessee. - Writ Tax No. - 576 of 2014 - - - Dated:- 29-10-2014 - Hon'ble Dr. Dhana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of Refined Oil, Vanaspati and Hand made soap but during the year under consideration, it closed the manufacturing activity and has given its unit on lease to M/s Agro Tech Foods Ltd. The income on account of lease received from M/s Agro Tech Foods Ltd. has been shown as Income from Other Sources by the assessee. A perusal of the lease agreement as filed during the assessment proceedings, shows that the assessee has received an amount of ₹ 5 lacs per month as leased amount from M/s Agro Tech Foods Ltd. Out of the total amount, ₹ 1 lac has been received towards land building and ₹ 4 lacs have been received towards plant machinery. Against these receipts, the assessee has claimed various expenses under the head Adminis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been filed on 06.10.2007 through online declaring total income of Rs.Nil. Subsequently assessment was completed u/s 143(3) of the I.T. Act, 1961 at total Income of ₹ 2,95,514/- on 16.03.2009. From perusal of assessment records it revealed that during the previous year assessee had not done any Manufacturing Trading activities and the company had given its 'plant machinery' and 'land building' on lease and claimed depreciation on such assets amounting to ₹ 24,31,484/-, which were not allowable as per conditions provided u/s 32(1) of the Income Tax Act, 1961. Therefore, I have reason to believe that income to the tune of ₹ 24,31,484/-, which was chargeable to tax has escaped assessment for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was revealed to her that during the previous years, the assessee had not carried out any manufacturing or trading activities and that the company had given its plant machinery and land building on lease, while claiming depreciation which according to the Assessing Officer was not allowable under Section 32(1). In other words, besides the fact that there is not even an averment in the reasons to the effect that the assessee had failed to fully and truly disclose all material facts necessary for the assessment, it is evident that the reasons for reopening are based on the assessment records. Hence there was no failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment, for the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to Section 147 stipulates in respect of a reopening beyond a period of four years is evidently not extrapolated to a situation where as in the present case the reopening is within a period of four years. Where a reopening of an assessment under Section 148 takes place within a period of four years, the test that has been laid down by the Supreme Court in the CIT v. Kelvinator of India Ltd. is whether the Assessing Officer had tangible material to come to the conclusion that there is an escapement of income from assessment. The Supreme Court has held that the reason to believe that any income chargeable to tax has escaped assessment cannot be founded on a mere change of opinion. The power to reassess is not in the nature of a power to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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