Reassessment based on mere change of opinion is invalid, and covered deduction issues must follow binding precedent.

Reassessment under section 147(b) was treated as invalid because it rested only on a mere change of opinion, which was insufficient to sustain jurisdiction. The deduction issue on gross interest paid in foreign branches was answered in line with the earlier binding view on the same question, so the claim under section 35B was allowed in favour of the assessee. Both referred questions were answered against the Revenue, and the tax case was disposed of accordingly.

---

---

Issues: (i) whether reopening of the assessment under section 147(b) of the Income-tax Act, 1961 was valid; and (ii) whether the gross interest payment incurred in the foreign branches was allowable as deduction under section 35B of the Income-tax Act, 1961.

Issue (i): Whether reopening of the assessment under section 147(b) of the Income-tax Act, 1961 was valid.

Analysis: The reopening was found to rest on a mere change of opinion and, on that basis, lacked jurisdictional validity.

Conclusion: The reopening under section 147(b) was held to be invalid, against the Revenue.

Issue (ii): Whether the gross interest payment incurred in the foreign branches was allowable as deduction under section 35B of the Income-tax Act, 1961.

Analysis: The question was treated as covered by the earlier decision on the same point and answered consistently with that view.

Conclusion: The deduction claim under section 35B was decided in favour of the assessee and against the Revenue.

Final Conclusion: Both referred questions were answered against the Revenue and the tax case was disposed of.

Ratio Decidendi: A reassessment based only on a mere change of opinion is not valid, and a covered deduction issue must follow the binding precedent applicable to the same legal question.

---