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TMI Blog2022 (6) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee along with the return of income. In other words, there was no new tangible material before Ld. AO to reopen the case of the assessee and the reopening was based on existing material already available on record. In such a case, the reopening would become mere review of the order which is impermissible as per the decision of Hon ble Supreme Court in CIT V/s Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT ] We are of the opinion that the formation of belief has to be on the basis of some fresh tangible material or new information which is not the case here. This being so, reassessment proceedings are liable to be quashed on legal grounds. The aforesaid conclusion also find support from the decision of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment is valid? 2. Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that reopening of assessment is valid on the ground that the appeal of the assessee does not arise out of the reasons recorded for reopening ignoring the grounds of appeal taken before it? 3. Whether on the facts and in the circumstances of the case the Tribunal was right in confirming the order of the CIT(A) that the ground relating to estimated disallowance of deduction u/s. 80M does not arise out of the order of the reassessment without verifying the computation of income? It was noted that there were two issues i.e., reopening of the assessment and computation of deduction u/s 80M. After taking note of the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our adjudication would be as given in succeeding paragraphs. The Ld. DR drew attention to paragraph-7 of TCA No.948 of 2019. This order arises out of ITA No.1991/Mds/02 wherein the matter has been remanded back by Hon ble Court to the file of Tribunal. However, while remanding back, ITA No. has been mentioned as 782/Mds/2001 as against correct ITA No.1991/Mds/02. We find that the same is merely a typographical error and the same is to be ignored. 3. The assessee was assessed for AY 1992-93 u/s 143(3) on 13.03.1995 which was revised from time to time. However, the case was reopened vide notice u/s 148 on 05.03.1997. The Ld. AO framed an assessment u/s 143(3) r.w.s. 147 on 23.12.1998 and determined the income at Rs.38.53 Crores. In the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest on securities as well as loss on revaluation of investments was allowed whereas the issue of 80M was held to be not arising out of reassessment order. The other issues raised in the appeal were held as non-pressed. 6. This order was challenged by the assessee before Hon ble High Court of Madras wherein the above two issues have been remanded back to the Tribunal for re-adjudication. The directions of Hon ble Court have already been noted by us in the opening paragraphs. 7. The reasons recorded by Ld. AO to reopen the assessment read as under: - The assessee bank has been maintaining its books of accounts under mercantile basis. However, while admitting the interest on securities for Income Tax purposes, the assessee bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so added a noted in the computation of income which read as under: - The interest on securities which is offered to tax under the head Business consequent on the amendment to the Income-tax Act, 1961 is accounted and offered to tax under the head Business . The cash basis of accounting is continued to be adopted for income-tax purposes as the same basis was adopted from the inception, instead of accrued basis. The cash basis of accounting is regularly followed, notwithstanding the change in the head of income, viz, from ``Interest on Securities to Business . It is evident from the computation of income that the assessee had disclosed full details of its claim in respect of interest accrued but not due in the computation of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such an eventuality, the issue of computation of deduction u/s 80M would not arise. Concurring with the same, the ground thus raised stand dismissed as infructuous. The appeal stands disposed-off accordingly, 11. It is admitted position that facts as well as point of adjudication as well as the direction of Hon ble High Court are pari-materia the same in AY 1993-94 except for the fact that issue of computation of deduction u/s 80M is not there in this year. The reasons recorded by Ld. AO to reopen the case of the assessee are substantially the same. Accordingly, the legal grounds urged by the assessee stand allowed and the appeal is disposed-off accordingly. 12. Both the appeals stand allowed in terms of our above order. Order p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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