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TMI Blog2018 (12) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 11,08,36,618/ was minutely scrutinized by the Assessing Officer during the original assessment proceedings. In the absence of any new material, the reopening of the assessment would be based on mere change of opinion. It is true that in the final order of assessment, the Assessing Officer had not elaborated this aspect but had not made any dis allowance or addition in the hands of the assessee. Merely because the order of assessment was silent on a particular claim of the assessee, would not by itself mean that the same was not scrutinized or that the Assessing Officer had not formed an opinion with respect to the same. If after detailed scrutiny during the assessment, the Assessing Officer examines a claim but does not reject the claim of the assessee which had come up for scrutiny, would not enable the Revenue to argue that the Assessing Officer had not formed any opinion on such issue and, therefore, reopening of the assessment would be permissible without there being any new or additional material available to the Assessing Office - Thus the impugned notice is set aside - Decided in favour of assessee - WRIT PETITION NO. 3130 OF 2018 - - - Dated:- 20-12-2018 - AKIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been offered for taxation accordingly. In this respect, it is pertinent to mention decision of Hon. Mumbai ITAT in the case of M/s Whistling Woods International Ltd. v/s ITO (2010) 48 DTR 371, wherein it has been held that interest earned by the assessee by investing its surplus funds in deposits with banks and other companies at the time when it was constructing the building of the institute for conducting its main business activity is taxable as income from other sources. 4. Further the Hon. Supreme Court in the case of CIT V/s Autokast Ltd. (2001) 248 ITR 110 (SC) has held that interest earned from money borrowed for purchase of plant and machinery and kept in short term deposits is assessable to tax as income from other sources. In this case, all the fund utilized or giving loans/advances was sourced from interest bearing debentures and loan taken. 5. It is also pertinent to mention here that decision of Hon. Rajasthan High Court in the case of CIT VIs Rajasthan Land Development Corporation 211 ITR 597 , wherein the following principle have been set out for deciding the tax treatment for the interest earned. (i) Interest on fixed deposits and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation 2 to section 147 are applicable to the facts of the case of the assessee and the assessment year 2013 14 under consideration is deemed to be a fit case where income chargeable to tax has escaped assessment, for issue of Notice u/s. 148 of the IT Act. 9. Since this case falls under the provisions of Section 151(2) of the Income Tax Act, 1961 necessary sanction to issue notice u/s 148 is obtained from the Addl. Commissioner of Income Tax. Range 3(3), Mumbai. 10. In view of the above facts of the case, I have reasons to believe that income to the minimum extent of ₹ 11,08,36,618/ has escaped assessment within the meaning of section 147 and I am hence, satisfied that this is a fit case for issue of notice u/s 148 r.w.s section and section 151(2) of the Income Tax Act, 1961. 5. Upon being supplied with the reasons recorded by the Assessing Officer, the petitioner raised objections to the reopening of the assessment under a communication dated 12.07.2018. Such objections were however rejected by the Assessing Officer by order dated 30.08.2018. Hence, this petition. 6. Learned Counsel for the petitioner took us through the materials on record and the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , you have shown interest income of ₹ 11,08,36,618/ whereas in the cash flow statement, you have shown interest income of ₹ 9,16,57,313/ showing a difference of ₹ 1,91,79,305/ . Please explain the difference of the same. 3. .. 4. .. 5. .. 6. .. 7. .. 8. ... 9. Please furnish the details of the rate of interests on which loan was taken and in the details of rate of interest on which loan was given. 10. Please furnish the details of project, date of starting of project and percentage of completion. 11. In response to the said queries, the petitioner replied under a letter dated 23.11.2015. In connection with the above noted queries, the petitioner's response was as under : Sr.No. Query : Our submission 1. In the original return, you have shown interest income of ₹ 11,08,36,618/ on which TDS of ₹ 1,10,83,662/deducted and the same has been claimed as refund due, whereas in the revised statement of computation, you have not shown the interest income nor claimed refund. Please exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ROI 1 Citygold Investments Pvt. Ltd. 56,10,27,968 11,08,36,618 9.50% Reconciliation of interest income shown in profit and loss account Interest received as per above 11,08,36,618 Interest received as per PL 9,16,57,313 Difference 1,91,79,305 Difference of ₹ 1,91,79,305/ pertains to excess interest charged by the Company in the FY 2011 12 which was reversed during the year by debiting interest received ledger account. However, the company has netted off interest received of ₹ 11.08 crore against interest paid of ₹ 47.12 crores and remaining amount transferred to work in progress account. There is no such interest debited to the profit loss account. 13. It can thus be seen that during the original scrutiny assessment, the Assessing Officer had asked the assessee to clarify the issue of the interest income of ₹ 11,08,36,618/ which in the revised statement of computation the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principles. Reference in this respect can be made to the decision of the Division Bench in the case of N.J. Pharmaceuticals Ltd. Vs. Dy. CIT, (2008) 297 ITR 119. 16. It is true that in the final order of assessment, the Assessing Officer had not elaborated this aspect but had not made any dis allowance or addition in the hands of the assessee. Merely because the order of assessment was silent on a particular claim of the assessee, would not by itself mean that the same was not scrutinized or that the Assessing Officer had not formed an opinion with respect to the same. If after detailed scrutiny during the assessment, the Assessing Officer examines a claim but does not reject the claim of the assessee which had come up for scrutiny, would not enable the Revenue to argue that the Assessing Officer had not formed any opinion on such issue and, therefore, reopening of the assessment would be permissible without there being any new or additional material available to the Assessing Office. We may refer to decision of the Gujarat High Court in the case of Gujarat Power Corporation Ltd. Vs. Asst. CIT, (2013) 350 ITR 266 , in which following observations were made : 41. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver. Therefore, while framing the assessment, allowing the claim fully or partially, in what manner the assessment order should be framed, is totally beyond the control of the assessee. If the Assessing Officer, therefore, after scrutinizing the claim minutely during the assessment proceedings, does not reject such a claim, but chooses not to give any reasons for such a course of action that he adopts, it can hardly be stated that he did not form an opinion on such a claim. It is not unknown that assessments of larger corporations in the modern day, involve a large number of complex claims, voluminous material, numerous exemptions and deductions. If the Assessing Officer is burdened with the responsibility of giving reasons for Several claims so made and accepted by him, it would even otherwise cast an unreasonable expectation which within the short frame of time available under law would be too much to expect him to carry. Irrespective of this, in a given case, if the Assessing Officer on his own for reasons best known to him, chooses not to assign reasons for not rejecting the claim of an assessee after thorough scrutiny, it can hardly be stated by the Revenue that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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