Change of opinion bars reassessment where interest expenditure was already examined in scrutiny assessment.

Reassessment could not be initiated on the same interest expenditure claim where the original scrutiny assessment had already examined unsecured loans, interest payments, ledgers and tax deduction details, and the AO had accepted the return without any addition. Because the books and supporting material were verified in the first assessment, reopening on the identical issue amounted to a mere change of opinion and an impermissible second review of an already considered claim. The reassessment notice was therefore quashed.

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Issues: Whether reassessment proceedings could be initiated on the ground that interest expenditure relating to borrowed funds was allegedly not allowable, when the same claim had already been examined in the original scrutiny assessment.

Analysis: The assessee had filed its return in scrutiny and the Assessing Officer had issued detailed questionnaires calling for particulars of unsecured loans, interest payments, supporting ledgers and tax deduction details. The assessee replied with the relevant materials, including the claim of interest expenditure on the borrowed funds. The assessment order recorded that the books of account and details furnished were verified and the total income was determined without any addition. In such circumstances, reopening on the very same element of the interest claim amounted to revisiting an issue that had already been considered. The reassessment mechanism could not be used to give the Assessing Officer a second opportunity to re-examine a claim merely because a different view was later formed.

Conclusion: The reopening was invalid as it was based on change of opinion. The notice for reassessment was quashed, in favour of the assessee.

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