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TMI Blog2018 (6) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... Chhajed, A.R. And Shri M.P. Chhajed, A.R.3 For The Revenue : Shri V. Vidhyadhar, D.R. ORDER Per Rajesh Kumar, Accountant Member: The present appeal has been preferred by the assessee against the order dated 05.07.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10. 2. The various grounds raised by the assessee are as under: 1. The Id. Commissioner of Income Tax (Appeals) erred in confirming the Order passed uls.143(3) r.w.s. 147 without appreciating that the necessary satisfaction of Joint Commissioner of Income Tax as required u/s.151 of the Income Tax Act was not obtained prior to issuance of Notice u/s.148 and therefore the assessment itself was bad in law. 2. The Id. Commissioner of Income Tax (Appeals) erred in confirming the Reopening of assessment uls.148 of the Income Tax Act without appreciating that the Assessee Firm had disclosed thoroughly and fully all the material facts during the original assessment proceedings uls.143(3) and therefore the reason to believe formed by Id. Assess ing Of f icer was bad in law and not in conformi ty wi th requirement u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was a debit balance at the end of the financial year i.e. as on 31.03.2009 of ₹ 1842092/-. This indicate that the partner has withdrawn more amount than amount available is capital account. In view of ibid provision and interest is required to change for this debit balance. Instead of sharing the interest at the rate of 12% assessee firm has claimed and interest of ₹ 2335760 to Shri K.D. Mehta. This is incorrect there is negative balance in capital account at the end of the year therefore allowance of interest on capital does not arise in view of above cited provisions the same should have disallowed and add to total income. Thus there is under assessment of income of ₹ 2335760/-. In view of the above, I have reason to believe that the income of ₹ 2335760/- chargeable to tax has escaped assessment for the year and consideration within the meaning of Explanation 2(e) to the provision of section 147 the Income Tax Act, 1961 and therefore, I seek permission for issuing notice u/s 148 of the Income Tax Act, 1961. The assessment was finally framed by the AO vide order dated 01.10.2014 passed under section 143(3) read with section 147 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences including the copy of ledger accounts were furnished in the original assessment proceedings before the AO. The Ld. A.R. drew our attention to letter dated 30.08.2011 addressed to the DCIT (the AO) wherein in para No.4 the assessee has furnished the details of credits during the year in the partner s account and the ledger accounts. The Ld. A.R. also took us to the copy of capital account of Shri K.D. Mehta in which the credit balance appearing as on 01.04.2008 was ₹ 1,94,64,671/- and thereafter during the year various credit and debit entries were made and ultimately there was excess of debit over credit to the tune of ₹ 18,42,092/-. The Ld. A.R. submitted that all these details and information were provided before the AO at the time of framing of original assessment under section 143(3) and therefore reopening the proceedings under section 143(3) read with section 147 when no fresh tangible material was before the AO and it was just a case of mere change of opinion which is not permissible under the Act. The Ld. A.R. in defense of his arguments relied on a series of decisions namely Madhukar Khosla vs. ACIT (2015) 55 taxmann.com 391 (Delhi), Motilal R. Todi v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the year the credit balance was ₹ 1,94,64,671/- whereas at the year end the capital account was overdrawn to the tune of ₹ 18,42,092/-. A perusal of all these evidences on record reveals that the AO has examined all the materials at the time of original assessment proceedings under section 143(3) of the Act and therefore there is no fresh tangible material before the AO to form a reason to believe that income of the assessee has escaped to the tune of ₹ 23,35,760/-. In our opinion, the present case which is a mere formation of belief on the basis of re-examination of the same records which were available at the time of original assessment proceedings and therefore nothing less than a change of opinion which is not permissible under the IT Act. The case of the assessee is supported by the decisions of various High Courts in the case of Madhukar Khosla vs. ACIT(supra), Motilal R. Todi vs. ACIT (supra) TANMAC India vs. DCIT (supra). In the case of Madhukar Khosla vs. ACIT (supra) the Hon ble Delhi High Court has considered the decision of the apex court in the case of CIT vs. Kelvinator of India Ltd. and various other decisions and held that there was nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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