TaxTMI 
TaxTMI 
2015 (12) TMI 198
X X X X Extracts X X X X
X X X X Extracts X X X X
.... making disallowance of a portion of the claim under section 80IB(10) of the Act. Subsequently, by the impugned notice, the assessment is sought to be reopened, which has given rise to the present petition. 3. Mr. R.K. Patel, learned advocate for the petitioner invited the attention of the court to the reasons recorded for reopening the assessment to submit that the same clearly reveal that the Assessing Officer seeks to reopen the assessment on verification of the case record and that there is no new tangible material for the purpose of reopening the assessment. According to the learned counsel, at the time when the initial assessment came to be finalised under section 143(3) of the Act, the claim under section 80IB(10) of the Act was thoroughly examined from all possible angles, including under section 45 thereof, and a portion of such claim was disallowed, under the circumstances, the reopening of assessment is clearly based upon a change of opinion. It was pointed out that against the partial disallowance of the claim for deduction under section 80IB(10) of the Act, the petitioner had preferred appeal before the Commissioner of Income-tax (Appeals) who had decided the issue ag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essor Assessing Officer had merely recorded a different opinion in relation to an issue to which the Assessing Officer, who had framed the original assessment, had already applied his mind and come to a conclusion. Reliance was placed upon a decision of this court in the case of Sarla Rajkumar Verma v. Assistant Commissioner of Income-tax, (2014) 43 taxmann.com 372 (Gujarat) for the proposition that where the Assessing Officer allowed the assessee's claim for deduction under section 80IB(10) of the Act after making detailed enquiries, he could not initiate reassessment proceedings on the basis of the same material taking a view that the said claim was wrongly allowed. 3.2 Reliance was placed upon an unreported decision of this court in the case of Sai Consulting Engineers Pvt. Ltd. v. Deputy Commissioner of Income-Tax, Special Civil Application No.1118/2015 rendered on 29th April, 2015 wherein the court had followed the earlier decision of this court in the case of Cliantha Research Limited (supra). The decision of this court in the case of J.V. Agrawal v. Income-tax Officer, (2014) 220 Taxmann 32 (Gujarat), was cited for the proposition that "the reason to believe" and the "opini....
X X X X Extracts X X X X
X X X X Extracts X X X X
....could it be said that there is a change of opinion. Reliance was also placed upon a decision of this court in the case of National Dairy Development Board v. Deputy Commissioner of Income-Tax, (2013) 353 ITR 538 (Guj.), for the proposition that by virtue of the second proviso to section 147 of the Act, income involving matters which are the subject matters of any appeal, reference or revision has expressly been taken out of the purview of the said section. The court held that insofar as the income stated to have escaped assessment under the second ground was concerned, the same having been the subject matter of appeal would not fall within the ambit of section 147 of the Act and as such, the Assessing Officer lacked jurisdiction to reopen the assessment on the said ground. Reliance was placed upon an unreported decision of this court in the case of United Phosphorus Ltd. v. Additional Commissioner of Income-Tax rendered on 8th March, 2011 in Special Civil Application No.3352/2001 for a similar proposition of law. 3.4 Mr. Patel submitted that the claim under section 80IB(10) having been considered by the Assessing Officer and such claim to the extent the same was partly disallowed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the present case, the assessment having been reopened within a period of four years, the only question that arises for consideration is whether an opinion was duly formed on the question of escapement and that the question as to whether there was a full and true disclosure is immaterial. 4.1 It was pointed out that the land in question had been transferred in the petitioner's books of account on 7th December, 2006 and the cost of land was shown at Rs. 1,91,84,250/-. However, the same was converted into stockin- trade in the financial year 2008-09 relating to assessment year 2009-2010. Under the circumstances, the difference between the cost of investment and fair market value on the date of conversion was the capital gain accrued to the petitioner as per section 45(2) of the Act, which aspect has not been considered by the Assessing Officer at the time of framing the original assessment. In support of his submission, the learned advocate placed reliance upon the decision of this court in the case of Gala Gymkhana (P) Ltd. v. Assistant Commissioner of Income Tax, (2012) 211 Taxmann 447 (Guj.), wherein the court after examining the record of the case found that the question of trea....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Tax (Assessment), (2000) 243 ITR 482, for the proposition that when no conscious consideration of the material was made, it would not create an embargo or ban on the competent officer to exercise powers under section 147 of the Act. 4.3 Insofar as the decisions on which reliance had been placed by the learned counsel for the petitioner, it was submitted that such decisions are not applicable to the facts of the present case, inasmuch as, in those cases, the court had recorded application of mind on the part of the Assessing Officer on the point at issue whereas in the facts of the present case, the Assessing Officer at the time of framing the original assessment has not applied his mind to the issue in question. It was, accordingly, urged that the petition be dismissed and the respondent be permitted to go ahead with the reassessment. 5. By the impugned notice dated 31st March, 2014, the respondent - Income Tax Officer seeks to reopen the assessment for the assessment year 2009-2010. Since the reopening is within a period of four years, the question of there being any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....500/- situated at Tragad bearing survey nos. 318, 327/1, 327/2 and sub plot No.3 to his capital account in the assessee firm's books on 07/12/2006. While transferring his land at Tragad, Shir Babubhai J Desai has taken the value of land at Rs. 1,91,84,250/- against the actual value of land at Rs. 2,34,78,500/-. The said land becomes the capital of the firm from the date of transfer i.e. 07/12/2006. In view of this, the claim of the firm that it has made an expenditure of Rs. 1,91,84,250/- towards purchase of land at Tragad under Scheme expenses in Schedule-E of its balance-sheet for the year ended on 31/03/2009 cannot be allowed. Thus, there is under assessment of income of the assessee to the extent of Rs. 1,91,84,250/-. It is further noticed that the land situated at Tragad bearing Survey nos.318, 327/1, 327/2 and sub plot No.3 admeasuring 46957 sq. mtrs. becomes the property of the Firm by virtue of Shri Babubhai J Desai one of the partners of the Firm, bring this capital assets as his capital in the books of the assessee firm. The assessee Firm has developed the land under the project named Anand Vihar. The said land is transferred by the partner to the firm on 7/12/2006 and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ections raised by the petitioner. In the opinion of this court, the Assessing Officer does not appear to have understood the true purport of the decision of the Supreme Court in the case of GKN Driveshafts (India) Ltd. v. Income-Tax Officer and others, (2003) 259 ITR 19, wherein it has been held that on receipt of reasons, the noticee is required to file objection to issuance of notice and the Assessing Officer is bound to dispose of the same by a speaking order. A speaking order would mean an order dealing with objections raised by the assessee. In the present case, the Assessing Officer has clearly failed to deal with the objections raised by the petitioner as contemplated in the above decision. 9. Be that as it may, a perusal of the material on record as discussed hereinabove shows that the Assessing Officer, at the time of scrutiny assessment, verified the material on record and called for the explanation of the petitioner on several issues relating to the land in question, etc. After due verification of the material on record, the Assessing Officer did not deem it fit to make any disallowance as is proposed to be made by reopening the assessment. It is the case of the respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... gain under section 45(2) of the Act. Under the circumstances, what the Assessing Officer now seeks to do is to examine the same material from a different angle. As held by this court in Cliantha Research Limited (supra), mere failure on the part of the Assessing Officer to raise a question would not authorise him to reopen the assessment even within a period of four years from the end of the relevant assessment year. Any such attempt on his part would be based on mere change of opinion. When a claim is processed at length after calling for due explanation from the assessee and the same is accepted, merely because a certain element or angle was not in the mind of the Assessing Officer while accepting such a claim, cannot be a ground for issuing notice of reassessment. 11. Insofar as the decision of this court in the case of Gala Gymkhana (P) Limited vs. Assistant Commissioner of Income-Tax (supra) on which reliance has been placed by the learned counsel for the respondent is concerned, in the facts of the said case, there was nothing to show that the Assessing Officer had examined the taxability of the entrance fees received from the members. The court, accordingly, held that the ....