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TMI Blog2020 (8) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... s interest expenses while framing original assessment. Now, reopening on the very same issue tantamount to change of opinion which is not permissible in law. Asian Paints Ltd. vs. DCIT [ 2008 (7) TMI 237 - BOMBAY HIGH COURT] has been held that the initiation of reassessment proceedings would amount to change of opinion of the AO as it was merely a fresh application of mind by the AO to the same set of facts and that since the AO had failed to apply his mind to the relevant material while framing the assessment order under section 143(3), he could not take advantage of his own wrong and reopen the assessment under section 147 - This was the case where the AO had reopened the assessment within four years from the end of the Assessment Year under appeal. Even in the case of in the case of Legato Systems (India) Pvt. Ltd. [2009 (9) TMI 943 - DELHI HIGH COURT ] has held that proceedings under section 147/148 of the Act vis- -vis completed assessments cannot be reopened, on a mere change of opinion i.e. on the basis of the same set of facts and material which were in the knowledge of the AO, and that the proceedings for reopening of assessment on the ground of income escapin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome on 30.10.2007. The case of the assessee was selected for scrutiny assessment by issuing notice under section 143(2) of the Act and assessment was completed originally under section 143(3) of the Act vide order dated 21.12.2009. Subsequently, the Assessing Officer issued notice under section 148 of the Act on 03.09.2010, which was served on the assessee on 21.09.2010. This notice u/s 148 of the Act is within four years from the end of relevant assessment year. For issuance of notice under section 148 of the Act, the Assessing Officer recorded the following reasons: - Reasons recorded for issue of Notice under section 148 of the IT Act The records of the Assesses Company for the above Assessment Year show that an amount of ₹ 4,64,92,579/- being interest paid on Loans was deducted from the Interest Income received to arrive at the Total Income. A further perusal of the records reveals that this amount of Interest was paid for Loans taken which were fully used for the purchase Shares of Idea Cellular Limited. Since the borrowed funds were fully utilized for procuring Shares, which is a Capital Asset, the Interest paid on these funds cannot be claimed as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to disclose fully and truly all material facts necessary for the assessment within the meaning of section 147(a) of the Act [now proviso to section 147 of the Act]. The present appeal is a better case for revenue because in the preceding case, it was after more than 4 years; whereas the present appeal involves notice issued within 4 years from the relevant assessment year. After the amendment of section of the Act w.e.f. 1.04.1989, wide power has been given to the Assessing Officer to reopen the assessment even in the case where the assessee had fully disclosed the material facts. The only condition is that the Assessing Officer should have reason to believe that the income chargeable to tax has escaped assessment. In the instant case, the appellant has not offered interest income of ₹ 2,46,70,808/- to tax. Therefore, there is no illegality in the reopening of the assessment. Strong reliance is placed on the decision in the case of Jawand Sons Vs CIT (2010) 326 ITR 39 (PH). The Hon'ble Supreme Court in the case of Raymond Woo//en Mills Ltd Vs ITO (1999) 236 ITR 34 (SC) has held that in determining whether the commencement of proceedings under section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of the Act during the reassessment proceedings. Having regard to the facts and circumstances of the case and in the light of Apex Courts decisions in the case of Phoolchand Bajraglal, Raymond Woolen Mills Ltd. Vs. ITO (supra), Indo Adden Salt manufacturing and Trading Co. pvt. Ltd. (1986) 159 ITR 624 (SC) and Hon ble Supreme Court in the decision of CIT Vs. PVS Beedees Pvt. Ltd. (supra). Ground of appeal No. I is dismissed. Aggrieved, assessee preferred appeal before Tribunal. 6. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted from the arguments of learned Counsel for the assessee the facts of the case that the case of the assessee was selected for the scrutiny under section 143(3) of the Act and AO passed the Assessment Order under section 143(3) of the Act on 21.12.2009 i.e. the Original Assessment Order. Subsequently, the AO issued a notice under section 148 of the Act on 03.09.2010 and reassessment was framed under section 143(3) read with section 147 of the Act determining the total income at ₹ 2,84,35,310/- after making certain additions/ disallowances. Learned Counsel explained the facts that the AO w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closes the fact of sale of the Idea Shares to Holding Co. ABNL ; (c) The Computation of Income showed the deduction claimed under section 57 of the Act in respect of interest expenditure against interest income; (d) By letter dated October 6, 2009, the assessee had submitted the Demat Account with the Depository in which the fact of purchase and sale of the Idea Shares was reflected; (e) By letter dated October 23, 2009, the assessee submitted the Loan Confirmation from Aditya Birla Nuvo Limited, Transwork Information Services Limited, Birla Global Finance Co. Limited, etc. which companies had taken ICDs; (f) By letter dated November 6, 2009 the assessee submitted the loan confirmations from Hindalco Industries Limited, Grasim Industries Limited and Essel Mining Limited from which parties it had taken ICDs and also explained the transaction of purchase the Idea Shares; (g) By the Letter date November 6, 2009, the assessee also submitted letters between Birla TMT Holdings and itself on the transaction of purchase and sale of the Idea Shares and other related facts. 10. After considering the aforesaid details/information, the AO had passed the original assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company and till the date those funds got utilized to pay Tata Group for acquiring shares of Idea. Birla TMT had incurred some expenses on purchase of said shares and therefore remitted ₹18,000,000/- as on account part payment. Copy of the letter received from Birla TMT is attached as Annexure 5. Vide letter dated 22.11.2006, Birla TMT ₹ 8,42,503/- in respect of acquisition of ₹ 16,94,64,540/- shares of Idea and after adjusting the said expense amount against the net interest received ₹ 19,134,678/- remitted the balance amount ₹ 2,92,175/-. Copy of the letter is attached as Annexure 6. Vide letter dated 23.01.2007, Birla TMT informed the company that it has received the original TDS certificate dated.23.01.2007 from Citi Bank NA for ₹ 55,36,130/- in theft favour and also confirmed that entire interest amount ₹ 24,670,808/ - and TDS ₹ 55,36,130/- belongs to the company since Birla TMT was acting on behalf of the company. Birla TMT confirmed that they have not claimed/shall not claim any TDS credit/benefit of the same. Since the aforesaid TDS certificate was issued by Citibank in favour of Birla TMT, to enable the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses 4,64,92,579 (1,86,54790) Gross Total Income (1,80,57,265) Less: Loss under the head Income from other 1,80,57,265 Total Income NIL In view of the above facts it is clear that in the original assessment proceedings AO has considered the aspect interest expenses and considered in the body of assessment order as well as in the computation of income specifically and after considering the same, the AO allowed the interest expenses. It means that the AO has applied his mind and formed an opinion for allowance of this interest expenses while framing original assessment. Now, reopening on the very same issue tantamount to change of opinion which is not permissible in law. Let s discuss the case laws relied on by both the sides. 14. We have taken note of the case law relied on by Ld Counsel for assessee in the case the case of CIT vs. Kelvinator of India Ltd. (2002) 256 ITR 1 (Delhi), the Hon'ble High Court has observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant material while framing the assessment order under section 143(3), he could not take advantage of his own wrong and reopen the assessment under section 147 of the Act. This was the case where the AO had reopened the assessment within four years from the end of the Assessment Year under appeal. Even in the case of in the case of Legato Systems (India) Pvt. Ltd. vs. DCIT [2010] 187 Taxman 294 (Delhi), Hon'ble Delhi High Court has held that proceedings under section 147/148 of the Act vis- -vis completed assessments cannot be reopened, on a mere change of opinion i.e. on the basis of the same set of facts and material which were in the knowledge of the AO, and that the proceedings for reopening of assessment on the ground of income escaping assessment is an exception to the finality of the proceedings arrived at under Section 143(3) of the Act during the regular assessment proceedings of the assessment years. 17. In the case of Asteriods Trading Investments Pvt. Ltd. vs. DCIT [2009] 308 ITR 190 (Bombay) Hon'ble Bombay High Court, being the jurisdictional High Court in the Appellant's case, has been held that the Assessee had fully disclosed material facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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