9911796707
Advanced Search 
TMI Blog2014 (11) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... cer of account books or other evidence from which material evidence could, with due diligence, have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. 3. Briefly the facts are, assessee is a non banking finance company (NBFC) registered with the Reserve Bank of India (RBI). As stated by assessee, the RBI has permitted assessee to carry on the business of nonbanking finance company without accepting public deposits. For the assessment year under dispute assessee filed its return of income on 29.11.2006 declaring income of Rs. 9,70,458. Assessee's case was selected for scrutiny assessment and assessment was ultimately completed vide order dated 19.11.2008 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cles of Association is to invest in deposits but the interest income earned by assessee from deposits with the bank has to be treated as income from other sources as assessee is not engaged in the business of money lending or any other business activity. The Assessing Officer ultimately concluded that as the interest earned by assessee is to be treated as income from other sources, the amount of Rs. 29,50,241 claimed as business expenditure has to be disallowed. Accordingly, he added the amount of Rs. 29,50,241 to the income returned. Being aggrieved of the assessment order so passed, assessee preferred an appeal before the CIT(A) by challenging the assessment order both on the legal issue of validity of proceedings initiated u/s. 147 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be assessed and since there was only one item of expenditure, whether was allowable or not. It is not the case of the assessing officer that there was some issue which was deeply embedded in certain documents which had not been seen during the scrutiny assessment. Rather the issue pertains to the most basic fact of the case. It is clear that at that time details of income and expenditure were examined by the assessing officer and he was satisfied about both and accepted the return of income. 4.7 Now after some years, no further information has been collected by the assessing officer. Based on the same information and the same file, the assessing officer was changed his opinion that the income accepted as "Income from Business" is now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts has accepted the same. Therefore, there being no failure on the part of assessee to disclose fully and truly all material facts, the Assessing Officer is debarred from reopening the assessment beyond the period of four years from the end of the relevant assessment year. Further, the learned AR submitted that the Assessing Officer has no fresh material or additional information available with him while reopening the assessment. It was submitted that reopening of assessment on the basis of very same materials which were considered by the Assessing Officer at the time of scrutiny assessment amounts to change of opinion which is not permissible under the provisions of the Act. In this context, the learned AR relied upon the following decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there must be failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment. On examining the facts of the present case in the light of the aforesaid statutory provisions, it appears that the assessment had been reopened by the Assessing Officer for the reason that the business expenditure claimed by assessee is not allowable as according to him income derived by assessee from interest is to be assessed as income from other sources and not as business income. 9. So far as the other reason viz., discrepancy between the interest income shown by assessee and as appearing in the TDS certificate, as per the Assessing Officer's own observation there is no such discrepancy. On the basis of the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Act. Even otherwise also, assessee's contention that from the very inception, assessee is following the same method of accounting by showing the interest income as income from business has not been controverted by the Department. 10. That being the case, the Assessing Officer in the impugned assessment year cannot treat the income in a different manner contrary to the system of accounting followed by assessee consistently over the years. Furthermore, it is clear from the facts and materials available on record, assessee has disclosed all material facts in the return of income filed by it as well as during the scrutiny assessment proceedings. Therefore, there being no failure on the part of assessee to disclose fully and truly a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
