TaxTMI 
TaxTMI 
2016 (5) TMI 529
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....red in holding that the action of AO in reopening assessment u/s. 147/148 is not correct ? 2. Whether on the facts and in the circumstances of the case & in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 39,53,226/- being prior period expenses on merit also. 3. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law." 2. The brief facts of the case are that the assessee company is engaged in the business of shipping & storage. The assessment in this case was completed U/s. 143(3) on 26.12.2006 at an income of Rs. 15,87,44,340/- as against returned income of Rs. 2,51,46,040/-. The assessment was reopened under section 148 after recording the following reasons : "01. As....
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....t No. 1 of the reasons recorded as above. On point No. 2 of the reasons recorded, it was submitted by the assessee that the prior period expenses are in the form of bad debts written off. It was also submitted that they have been erroneously categorized as prior period expenses. The ld. Assessing Officer after considering the reply of the assessee and the provisions of section 36(1)(vii) of the Act and section 36(2) observed that a bad debt written off can be claimed as an expense only when it has been shown as an income in the relevant previous year or an earlier previous year, but in the instant case, the assessee has not shown that the bad debts written off claimed as an expense were shown as an income in an earlier previous year. In vie....
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....and the facts attending to the case, held the reassessment proceedings invalid and deleted the addition observing as under : "3.7 I have considered the above submissions and judgments filed before me. It is a clear fact now that reopening u/s 147 cannot be initiated on a mere change of opinion. From the perusal of notice u/s 142 (1), various details and explanations sought which were duly replied along with all the details and were filed before the AO. It is seen that all these documents are part of assessment record. The AO cannot agitate those issues again unless there is incorrect statement or material fact is concealed. The AR has rightly agitated that this assessment relates to AY 2004-05 which was completed u/s 143 (3) making....
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....ator India 320 ITR 561 have already held that reopening is not permissible merely on the basis of change of opinion. Hon'ble SC have also held that one of the major reasons for taking such a view also appears to be the fact that if the AO is permitted to reopen the assessment on a mere change of opinion section 147 would give arbitrary powers to the AO to reopen the assessment. Respectfully following the decision I am fully in agreement with the arguments raised by the AR on the facts and circumstances of the case. I, therefore, allow ground no. 1 by holding that reopening of the assessment made 143 (3) is not correct hence assessment made does not survive. 3.8 That I have already disposed off ground no. 1 in assessee's fav....
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....find no justification to interfere with the findings reached by the first appellate authority in the impugned order. The ld. DR could not adduce any material on record to rebut the contention of the assessee that the impugned notice u/s. 148 was issued after expiry of four years from the assessment year under appeal and the reasons recorded nowhere mention the satisfaction of the AO that any income has been escaped from assessment due to failure on the part of the assessee to disclose fully and truly material facts necessary for the purpose of assessment, as contemplated in proviso to section 147 of the IT Act. Therefore, in view of decision of Hon'ble Delhi High Court in the case of Wel Intertrade P. Ltd. vs. ITO 308 ITR 22 (Del) and M/s. ....