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TMI Blog2018 (6) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod and allocating the sales as per the old statement as the sales but with certain changes”(sic). This definitely is not permissible and falls foul of the principles of reassessment for reason of it being a mere change of opinion. The power conferred under Section 147 is not one of review and is of reassessment for reasons recorded. These reasons recorded has to emanate from some material coming to the notice of the Assessing Officer after the original assessment; which is absent at this instance. On the ground of binding precedents, inter-parties, in the other assessment years as also on the ground of the reassessment proceedings being incompetent, we are of the opinion that the direction of the First appellate Authority on the issue of Section 80(IA), need not be touched. We affirm the order to that extent and the consequences flowing from the said directions necessarily follow. Hence there would be no purpose served in remanding those two issues. What remains is the expense incurred for maintaining Mammen Mappilai Hall. The expenses is in the nature of salary paid to a sweeper for cleaning the premises. Though the Hall is in the name of the founder of the assessee, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from Annexure-A assessment order. ( 1) Failure to make addition of ₹ 17.64 lakhs with respect to teak plantation to the total income. ( 2) Income from property at Bombay not declared. ( 3) Claim under Section 80(IA) is excessive. ( 4) A sum of ₹ 187.32 lakhs shown as deposits from agents, have been included under the head quasi capital . 3. The second and fourth issues with respect to income from property in Bombay and the deposits from agents; the assessing authority did not make any addition. The addition with respect to teak plantation was not resisted by the assessee. The claim under Section 80(IA) was revised by the Assessing Officer (AO) after taking into account the gains from business of each of the units and apportioning it proportionally. This was done after calling for the details from the assessee, who had made the apportionment in a different manner. In addition to the above, the AO had also considered two issues with respect to deemed dividend and expenditure with respect to one Mammen Mappillai Hall, which were found to have escaped assessment for reason of not being included in the total income. 4. Annexure-A order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the Supreme Court in (1992) 198 ITR 297 (SC) [CIT v. Sun Engineering Works P. Ltd.] has not laid down any preposition as has been found in Travancore Cements. The Full Bench held that if in the course of reopening, for escapement of income, it comes to the notice of the AO that any other item or items of income, other than that recorded as reasons originally for the purpose of re-opening, has escaped assessment; then the AO is bound to assess such item or items of income also in the course of reassessment under Section 147. The decision in (2007) 291 ITR 500 (SC) [Asst. CIT v. Rajesh Jhaveri Stock Brokers P.Ltd.] was also relied on by the Full Bench. The Hon'ble Supreme Court in that decision held that at the stage of issuance of notice under Section 148, the only question is whether there was relevant material on which a reasonable person could have formed requisite belief. Whether it could eventually prove escapement of income is not at all the concern at the stage of reopening. The decision in Travacore Cements stood overruled by the Full Bench. 8. Even when the Full Bench had declared so, Explanation 3 to Section 147 was inserted by Finance Act (No.2) of 2009 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings were put to the assessee and reply/explanation obtained from the assessee. There is no ground urged of violation of principles of natural justice. It is after looking into the explanation offered by the assessee that the additions were made. This is not a case in which additions made, on the issues not originally recorded under Section 148(2) could be deleted, merely on the ground of original reasons recorded having not concluded in an assessment of escaped income. Two of the reasons recorded did conclude in assessment of escaped income. It definitely cannot be a preposition that only if all the recorded reasons ended in assessment of escaped income, could there be assessment made on issues of escapement; detected during the course of re-opening. We, hence, answer the questions of law framed in favour of the Revenue and against the assessee. 12. We notice that the deletions were made on the assumption that there could be no other issues dealt with on re-opening other than what was recorded as reasons under Section 148(2). We have found otherwise based on the Full Bench judgment as also the judgment of the Division Bench of the Bombay High Court. In such circumstances, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and falls foul of the principles of reassessment for reason of it being a mere change of opinion. The power conferred under Section 147 is not one of review and is of reassessment for reasons recorded. These reasons recorded has to emanate from some material coming to the notice of the Assessing Officer after the original assessment; which is absent at this instance. On the ground of binding precedents, inter-parties, in the other assessment years as also on the ground of the reassessment proceedings being incompetent, we are of the opinion that the direction of the First appellate Authority on the issue of Section 80(IA), need not be touched. We affirm the order to that extent and the consequences flowing from the said directions necessarily follow. 16. Hence there would be no purpose served in remanding those two issues. What remains is the expense incurred for maintaining Mammen Mappilai Hall. The expenses is in the nature of salary paid to a sweeper for cleaning the premises. Though the Hall is in the name of the founder of the assessee, it is not owned by the assessee. The claim is that in keeping the Hall clean the assessse's business gets enhanced good will. A similar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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