TaxTMI 
TaxTMI 
2012 (8) TMI 332
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....er for the disallowance of bad debts claimed and the validity of assessment made in pursuant to Sec. 148. Let us see the facts as they were at the time of the original assessment and re-assessment proceedings. 3. The facts show that return of income for the year under consideration was filed on 24.10.2005 declaring total income of Rs. 83,34,184/-. The return was selected for scrutiny assessment and statutory notices were issued and served on the assessee. With notice u/s. 142(1) of the Act, a questionnaire was sent to the assessee. The assessee was asked to explain 19 points raised by the said questionnaire. We are concerned with Q.19 which is as follows: "Q.19. Justify Bad debts claimed in format below: Debtor Party Name & address....
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....tal loss which is to be added back to the taxable income because of which the omission has resulted in under assessment of income of Rs. 1,35,00,000/-. In response to the said notice, the assessee has objected to the reopening of the assessment as all particulars and details which are the subject matter of the reopening were already on the record of the Income Tax department and further more these have been duly considered while completing the assessment u/s. 143(3) of the Act. Without prejudice to the question of the validity of the notice u/s. 148 on the facts , the assessee submitted that as its principal business included money lending and income from such lending was duly assessed as business income. The loan given to M/s. La Cream Fin....
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....the original assessment order. The Senior Counsel further submitted that after the completion of the original assessment, the AO sought to rectify the assessment by notice dt. 24.11.2009. The Counsel further submitted that till date , outcome of the said notice is not known. The reasons for reopening of the assessment are same as the reasons which were given for the rectification of the assessment which clearly establishes that the AO himself is not certain whether the issue involved relates to rectification of error or escapement of income. This is nothing but mere change of opinion on the part of the AO and on that basis assessment cannot be reopened. The Counsel relied upon the ratio laid down by the Hon'ble Supreme Court in the case of ....
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....-. We also find that the reasons given for the reopening of the assessment are on principle identical with the reasons given for the reopening of the assessment which shows that AO himself was not certain as to under which section he should proceed while framing the assessment u/s. 147. We find that no tangible material has been brought on record, the AO has simply disallowed the claim of write off on the facts and circumstances which were available before him while framing the original assessment. This approach clearly show that the AO has merely changed his opinion in relation to the allowability of the said write off which is in contravention to the ratio laid down by the Hon'ble Supreme Court in the case of Kelvinator of India Ltd. (sup....