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TMI Blog2024 (5) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... ely clear from the assessment order and details filed by the assessee during the assessment proceedings. Thereafter, after four years without bringing any new evidence on record the AO issued notice under section 148 of the Act. Here, in the reasons recorded, AO has not alleged that assessee failed to disclose all material facts. In the reasons recorded for reopening, the AO stated on verification of the agreements, it is noticed that as per the agreement, purchase cost receivable by the seller will be adjusted against the existing liabilities. Therefore, AO stated that he had reason to believe that capital gain on Sale of Vehicles had escaped assessment. Thus, it is very much clear from the reasons that AO is referring to the same agreements which were examined by the AO during original assessment proceedings and which has been mentioned in the original assessment order. The issue of Sale of Vehicles is discussed in the original assessment order. In these facts, the reasons recorded are nothing but change of opinion. Therefore, we are of the opinion that AO has reopened assessment merely on the basis of change of opinion. Revenue has not proved that assessee has failed to disclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of appellate proceedings. 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeal) was correct in ignoring the fact that in the original appellant proceeding he could have gone into only the question raised before him without going to into other issues which necessitated action u/s 147 of the Income Tax Act. 5. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeal) has not appreciated the fact that he has all the powers to go beyond the remand report given by the AO and could have considered the issues raised in reassessment proceedings afresh and upheld the addition made by the AO. 6. Any other ground that may be raise during the proceedings. 2. The assessee filed C.O.No.02/PUN/2020. The assessee has raised the ground of appeal as under : 1. That on the facts and in the circumstances of the case the reopening of assessment u/s 147 of IT Act and consequent order passed u/s 143(3) r.w.s. 147 of the Act is bad in law and the ld CIT Appeal has erred in not deciding this issue in spite of specific ground taken by the assessee. 2. That any other cross objections can be raised during the course of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide order u/s 143(3) dated 22/12/2011, assessing the Total Income at Rs. 2,69,10,137/-. The assessee sold most of its trucks during the year to its sister concern, M/s KSR Freight Carriers and M/s Shree Chadda Roadlines who were shown as creditor to the assessee to the extent of total liability amounting to Rs. 2,31,89,907/- payable to its financier bankers towards the vehicles. The A. O. made an addition of Rs. 2,31,89,907/- as unexplained credit u/s. 68 of the I.T. Act, as he was not convinced with the explanation given by the assessee for creation of liability by the assessee. During the appellate proceedings, the assessee submitted that the liability prior to the date of sale towards vehicles was taken over by the purchaser by executing a separate agreement with the bankers and the appellate authorities relying on the above submissions held that the liability shown by the assessee stands explained and deleted the addition made by the A. O. However, on verification of the agreements, it is noticed that as per the agreement, purchase cost receivable by the seller will be adjusted against the existing liabilities which are due to be payable by the seller. Accordingly, when the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sport Company (Seller) to M/s Shree Chadda Roadlines and M/s KSR Freight Carriers (Purchasers). It is further seen that the said loan agreement speaks of fresh credit facility granted to the applicant i.e. the purchasers of trucks. On perusal of the loan agreement, it is seen that the recitals / terms conditions mentioned therein does not speak of transfer of loan or rescheduling loan. From the said loan agreement of the purchasers, it is clear that the purchasers of trucks have not discharged assessee s liability to the Bankers rather, it says that fresh credit facility has been granted to the applicant i.e. the purchasers of trucks. It is further seen that the request letters made by the assessee as well as the purchasers with regard to the transfer of loan liability is nowhere mentioned in the aforesaid loan agreement. Hence, it does not form part of the fresh agreement of loan availed by the purchasers. Therefore, there is no connection between the transfer of liability of M/s KSR Transport Co. and the loans availed by the purchasers of trucks. Hence, the entries passed by the assessee in its books by showing the purchaser as creditor is merely a book entry, as discussed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t AO is referring to the same agreements which were examined by the AO during original assessment proceedings and which has been mentioned in the original assessment order. The issue of Sale of Vehicles is discussed in the original assessment order. In these facts, the reasons recorded are nothing but change of opinion. Therefore, we are of the opinion that AO has reopened assessment merely on the basis of change of opinion. 5.6 Proviso to section 147 of the Income Tax Act is reproduced here as under : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, of that assessment year: 5.7 Thus, as per proviso to section 147, notice under section 148 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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