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TMI Blog2016 (7) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... le dealing in potato seeds. As already observed that the AO examined the carriage inward account in the original assessment proceedings and did not think it fit that there was any violation of section 40(a)(ia) of the Act. It can thus be seen that this issue on which the AO initiated reassessment proceedings had been duly considered by the AO while concluding the proceedings u/s 143(3) of the Act. As during the course of original assessment, it is seen that no query regarding Tax deduction at source from transport payment has been made. Consequently no examination regarding disallowance u/s 40(a)(ia) has been made. Similarly other heads under for which assessments were reopened were not touched upon by the assessing officer during the original assessment. When in the original assessment proceeding the assessing officer has not examined the issue at all, no opinion was formed, the principle of change of opinion cannot apply. Further this is a case where the assessment has been reopened within 4 years of the end of the assessment year. Therefore the re-assessment proceeding cannot be treated as invalid on the ground that full and true disclosure of material fact was made in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Assessee had declared income from the business of plying, hiring goods carriage at ₹ 50,000/- u/s.44AE of the Act. The AO noticed from the Balance Sheet of the Assessee that the Assessee owned 3(three) vehicles i.e 1.'I'ruck 2.Maruti 3.in nova. According to the AO u/s..44AE of the Act, profits and gains have to be computed by applying presumptive income for heavy goods vehicle at ₹ 3500/- per month and other vehicles at ₹ 3150/- p.m. Since the Assessee owned one truck and two other vehicles, according to the AO income of ₹ 1,17,600/- ought to have been declared from the said business by the Assessee , whereas only ₹ 50,000/- had been declared by the Assessee. Hence, according to the AO there was escapement of income of ₹ 67,600/ (Rs.117600- ₹ 50000 ). 2. The Assessee had incurred transport /carriage inward charges of ₹ 18,45,600/-. A sum of ₹ 16,43,100/- out of the transportation charges was payment to transporter in excess of ₹ 20,000/-in each transaction or aggregate of payments made during the previous year was more than ₹ 50,000/- and therefore the Assessee ought to have deducted tax at source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed by such submissions of the Assessee and he held that initiation of reassessment proceedings was valid. The AO further added a sum of ₹ 50,000/- as income from business of plying trucks on hire as the Assessee had given on hire only one truck during the previous year. According to the AO, the sum of ₹ 50,000 was disclosed only in the return filed in response to notice u/s.148 of the Act and not in the original return of income. The plea of the Assessee was that the sum of ₹ 50,000 had been declared as income from plying trucks in the original return of income itself. Ignoring such submission a sum of ₹ 50,000/- was added to the total income of the Assessee by the AO. The AO further held that a sum of ₹ 18,45,600/- which was expenses incurred on transportation charges had to be disallowed u/s.40(a)(ia) of the Act because of non deduction of tax at source on such payments by the Assessee as required by Sec.194-C of the Act. The AO further disallowed expense to the tune of ₹ 50.122/- out of depreciation on car, interest on car loan and car expenses. The AO thus completed the assessment u/s.147 of the Act by order dated 08-08-2012 computing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced on record in course of the original assessment proceedings and the specious action on that behalf is thoroughly arbitrary, unwarranted and perverse. 8. I have heard the submissions of the ld. Counsel for the assessee and the ld. DR on the aforesaid grounds of appeal. I deem it convenient to deal with the arguments raised before me that the proceedings u/s 148 of the Act have not been validly initiated because the proceedings u/s 148 of the Act were initiated purely based on change of opinion without any fresh material coming to the knowledge of the AO. The undisputed facts in so far as the aforesaid issue are that the assessee is an individual. He is engaged in the business of potato seeds. The assessee was also engaged in the business of transportation. For A.Y.2007-08 the assessee filed return of income on 31.10.2007 declaring total income of ₹ 4,00,570/-. The AO issued notice u/a 143(2) and section 143(1) of the Act for completing the assessment u/s 143(3) of the Act. The AO in one of the notices had specifically called for the details of party-wise transport/carriage inward charges. The assessee gave the details of transport/carriage inward for the year ended 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO. 10. As far as the second reason recorded by the AO is concerned it relates to the carriage inward charges in the business of wholesale dealing in potato seeds. I have already observed that the AO examined the carriage inward account in the original assessment proceedings and did not think it fit that there was any violation of section 40(a)(ia) of the Act. It can thus be seen that this issue on which the AO initiated reassessment proceedings had been duly considered by the AO while concluding the proceedings u/s 143(3) of the Act. In the paper book before us the assessee filed the order sheet entry of the proceedings before the AO and these are available in pages 96 to 102 of the assessee s paper book. As far as the reassessment proceedings are concerned the first order sheet entry is dated 21.06.2011 and it refers to the audit query dated 10.02.2011. Thereafter there is a discussion with regard to seeking of an approval u/s 147 of the Act from CIT(A). 11. Thus it is clear that the reassessment proceedings have been initiated without any tangible material coming to the possession of the AO. In other words. the Assessing Officer had formed his belief regarding escapement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry regarding Tax deduction at source from transport payment has been made. Consequently no examination regarding disallowance u/s 40(a)(ia) has been made. Similarly other heads under for which assessments were reopened were not touched upon by the assessing officer during the original assessment. When in the original assessment proceeding the assessing officer has not examined the issue at all, no opinion was formed, the principle of change of opinion cannot apply. Further this is a case where the assessment has been reopened within 4 years of the end of the assessment year. Therefore the re-assessment proceeding cannot be treated as invalid on the ground that full and true disclosure of material fact was made in the original proceeding. 14. I am of the view that the aforesaid reasons assigned by the CIT(A) cannot be sustained in the light of the proposition laid down by the Hon ble Supreme Court in the case of CIT vs Kelvinator India Ltd. (supra). In the given facts and circumstances I am of the view that the initiation of re-assessment proceedings u/s 147 of the Act is not valid as it was based on the change of opinion and no tangible material coming to the possession of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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