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TMI Blog2005 (2) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... dging loss claimed of Rs. 47,31,947. The reasons given by the AO for re-estimating the hedging loss is that the assessee was not in a position to co-relate the entire transaction of account of hedging with its stock position on a day-to-day basis. 4. On appeal, in the impugned order, the learned CIT(A) cancelled the assessment on the ground that the AO has not discovered or, found any new material for reopening the assessment. The learned CIT(A) also observed that all the material informations were available on record at the time of framing original assessment. Therefore, the mere fact that the figure of disallowance out of hedging loss made in the original assessment was not appropriate is no ground to reopen the assessment. For cancelling the assessment framed under s. 143(3) r/w s. 147, in the impugned order, the learned CIT(A) also relied on the decision of the apex Court in the case of Calcutta Discount Co. Ltd. vs. ITO (1961) 41 ITR 191 (SC) for the proposition that there was no omission or failure to disclose full and truly all material facts. Aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us on the ground that the learned CIT(A) erred in ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment. The word 'reason' in the phrase 'reason to believe' would mean cause or justification. If the AO has a cause or justification to think or suppose that income had escaped assessment, he can be said to have a reason to believe that such income had escaped assessment. The words 'reason to believe' cannot mean that the AO should have finally ascertained the facts by legal evidence. They only mean that he forms a belief from the examination he makes and from any information that he receives. If he discovers or finds or satisfies himself that the taxable income has escaped assessment, it would amount to saying that he had reason to believe that such income had escaped assessment. The justification for his belief is not to be judged from the standards of proof required for coming to a final decision." 7. The learned Departmental Representative further relied on the decision of the Hon'ble jurisdictional High Court in the case of IPCA Laboratories Ltd. vs. Gayanand Meena, Dy. CIT Ors. (2001) 170 CTR (Bom) 585 : (2001) 251 ITR 420 (Bom) and contended that in that judgment the Hon'ble High Court held that a notice under s. 147/148 was issued within four years, wherein also th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47 is not applicable because there is no reason to believe that income has escaped assessment. The learned counsel for the assessee accordingly contended that in this case there was no reason to believe that income has escaped assessment. The learned counsel for the assessee relied on the several judgments, wherein, it is held that in order to reopen the assessment, there has to be reason to believe that income has escaped assessment. Reliance was also placed on the judgment of the apex Court in the case of Phool Chand Bajrang Lal Anr. vs. ITO Anr. (1993) 113 CTR (SC) 436 : (1993) 203 ITR 456 (SC), wherein, it is held that reason to believe should not be construed as a reason to suspect. Continuing his arguments, the learned counsel for the assessee submitted that that there has to be "reason to believe" (and it) cannot be assumed merely on account of "change of opinion" on the same basis or information and document, irrespective of the fact whether the reopening sought to be done is within 4 years or beyond 4 years. The AO can reopen the assessment within 4 years only if there is mistake of fact or law due to which there is underassessment of income or grant of excessive loss. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs. 47,31,947. This clearly indicates that the reopening has been made because estimate earlier made by the AO was found to be on the lower side. The reopening of assessment under s. 147, in our opinion, even after amended law cannot be made for making roving enquiries. 13. In this case, while framing the original assessment, there was no failure on the part of the AO to apply correct provisions of Act. Therefore, the decisions relied by the learned Departmental Representative in the case of Pratu1 C. Patel and followed by the Hon'ble jurisdictional High Court in the case of IPCA Laboratories Ltd. are not relevant. We also find that there is no fresh information (which) came to the possession of the AO after framing the original assessment which indicated that earlier estimate made by the AO was incorrect. The Hon'ble apex Court in the case of Phoo1 Chand Bajrang La1 held that it is trite law that the subsequent information based on which the reassessment was proposed should be definite, specific, relevant and reliable and then only, such material would constitute to satisfy the test of reason to believe, because such reason to believe should not be construed as a reason to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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