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TMI Blog2015 (3) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on record and formed an opinion holding that the labour charges have to be allowed. No further tangible material has been obtained in the following Assessment Year, warranting a reopening of assessment. Thus, the attempt to reopen the notice would be clear case of change of opinion as formed during the regular assessment proceedings and cannot be sustained. The contention urged by Revenue that as the Revenue's Appeal for the Assessment Year 200506 has been admitted, this appeal should also be admitted is not required to be considered. This is because, we find that the jurisdictional requirement of issuing the notice under Sections 147 and 148 of the Act is not satisfied. This is threshold issue and, therefore, the result of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of excessive claim of labour charges and unexplained source of capital introduced by partners? (c) Whether on the facts and circumstance of the case and in law, the ITAT is correct in observing that the reopening is bad in law if the basis on which the assessment has been reopened by A. O. was not found as sustainable and justifiable on the facts in a later assessment year? (d) Whether on the facts and circumstances of the case and in law, the ITAT is correct in not considering the second aspect of the reasons recorded for reopening while deciding the sufficiency of reasons? 3. The impugned order of the Tribunal dismissed the Revenue's appeal from the order dated 27th July, 2009 of the Commissioner of Income Tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and therefore, I have reason to believe that income to the extent of ₹ 2,30,85,067/- has escaped for A. Y. 2004-05. During the assessment u/s. 143(3) for AY 2005-06, the capital introduced by the partners was added as mentioned below since the partners could not establish the source of capital. a. Shri Manubhai G. Jivani ₹ 57.00 lakhs b. Shri Jagdish H. Jivani ₹ 70.00 lakhs During the A. Y. 2005-06, the two partners could not establish the source of capital as mentioned above. The same two partners have introduced ₹ 19,72,080/and ₹ 3,50,000/- and the same is to be disallowed for A. Y. 2004-05. For the reasons mentioned above, I have reasons to believe that the income to the extent of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions 147 and 148 of the Act seeks to reopen the assessment for the subject Assessment Year could not be sustained as the same proceed on a mere change of opinion. This in view of the fact that the issue of labour charges was a subject matter of consideration by the Assessing Officer during regular assessment proceedings. 7. The grievance of the Revenue with regard to issue raised in Questions (a) to (c) is that the reassessment notice is valid in law and the same stands concluded in its favour by the decision of this Court in Multiscreen Media Private Limited v/s. Union of India and another 324 ITR 54. It is submitted that in view of the aforesaid decision, the material obtained during the subsequent assessment year which indicated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer was satisfied with the claim of labour charges that he accepted the claim of the RespondentAssesee in regular assessment proceedings. In the following Assessment Year i.e. A. Y. 2005-06, the labour charges has been disallowed to the extent the same were found bogus. This conclusion/ opinion formed by the Assessing Officer in the subsequent Assessment Year which is treated as tangible material by the Revenue to reopen the proceedings. There can be no manner of doubt that material obtained during the assessment proceedings for another year can form the basis of reopening of an assessment. However, the reopening of an assessment cannot be on the basis of a material which has already been considered during the regular assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been laid down by the Supreme Court in Kelvinator [2010] 320 ITR 561 (SC) must be fulfilled. In the present case, there was no tangible material, no new information and no fresh material which came before the Revenue in the course of assessment for the assessment year 200708 which can justify the reopening of the assessment for the assessment year 2006-07. (emphasis supplied) 9. The facts of the present case are similar to NYK Line Limited (supra). The view in the following Assessment Year that the labour charges paid were excessive is not tangible material but opinion/ view on the material available for the next year. In this case, the labour charges paid by the Respondent for Assessment Year 2004-05 was subject matter of enqui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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