Change of opinion defeats reassessment where reopening relies only on an audit view and no fresh information exists.

Reassessment under Section 147(b) was held unsustainable where the assessee had already disclosed the interest expenditure and its treatment in the original assessment, and the reopening rested only on an audit view that the expense could not form part of cost of acquisition. The material relied on by the department was already on record, so there was no fresh information to justify jurisdiction. The issue was at most debatable and the reopening amounted to a change of opinion rather than valid reassessment. The ITAT Madras-C therefore upheld the finding that the reassessment was without jurisdiction.

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Issues: Whether the reassessment initiated under Section 147(b) of the Income-tax Act, 1961 was jurisdiction for want of new information, and whether the audit note merely reflected a debatable interpretation of material already on record.

Analysis: The assessee had disclosed the relevant interest expenditure and its treatment in the capital gains computation at the original assessment stage. The reopening was prompted by the audit view that such interest could not form part of the cost of acquisition. On the record, the material relied upon by the department was already available to the assessing authority, and the reassessment depended on accepting the audit interpretation rather than on any fresh factual information. The original acceptance of the assessee's computation was not shown to be inadvertent or mechanical, and the issue was at best debatable. In these circumstances, the case fell within the principle that reassessment cannot be sustained where no fresh information exists and the attempt is essentially a change of opinion.

Conclusion: The reopening under Section 147(b) was rightly held to be without jurisdiction, and the assessee's challenge failed on the merits of the departmental appeal.

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