TaxTMI 
TaxTMI 
2017 (9) TMI 238
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces placed on the record to show that notice u/s 148 has been issued due to change in opinion on the same set of facts as no new information came on the record of the assessing officer. Thus the notice issued u/s 148 is bad and law and the order passed under reassessment should be cancelled. 3. The CIT (A) erred in law and on facts in holding the reopening of assessment u/s 147 as justified ignoring the fact that the issue regarding the valuation of closing stock has been considered and discussed in detail by the assessing officer in the assessment order. Thus the order passed under reassessment should be cancelled. 4. The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing." 2. Whereas the revenue has raised following grounds: "1. On the facts and circumstances of the case the Ld. C1T(.A) has erred in law in deleting the addition of Rs. 2,07,62,305/- made by the assessing officer on account of valuation of closing stock of E-class content. "2. The appellant craves to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... new material has come on record and the issue which has been considered by the Assessing Officer in the original assessment proceedings then reopening of such an assessment completed u/s 143(3) cannot be reopened as it tantamount to "change of opinion" which is impermissible in law. In support of his contention he strongly relied upon the latest judgment of Hon'ble Jurisdictional High Court in the case of DIT (Intl. Tax) vs. Rolls Royce Industrial Power India Ltd. in ITA No. 1058/2011 (judgment dated 18.5.2015). Apart from that he also relied upon various other decisions the compilation of which has been given separately before us. 5. On the other hand, the Ld. DR relied upon the observation and findings of the Learned CIT(Appeals) given at para 2.3, wherein the Learned CIT(Appeals) has held that any information/objection by the Audit party is an adequate material for reopening the assessment and he further referred to the judgment of Hon'ble Delhi High Court in the case of CIT vs. Usha International Ltd. 348 ITR 0485 (Del) (2012), wherein the Hon'ble court held that the opinion can only be formed on a particular issue when the assessee is able to establish that the issue....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,312/- Messing (items & others) 2,25,448/- E-software 82,93,269/- Shares 56,90,323/- 12,13,86,177/- The Assessing Officer in the original assessment order further noted that the assessee was asked to provide details about valuation of the closing stock and also substantiate the valuation of the closing stock with the evidence, vide order sheet entry dated 10.11.2009. In response, the assessee had submitted the details and the different methods adopted for valuation of stock. The issue of valuation of closing stock has been discussed from pages 2 to 6 of the assessment order. Whence the issue of valuation of closing stock including that of E-software has been considered and it has been specifically contended by the assessee that the same has been valued at net realizable value, because the software development in E-class products were finished and were ready for delivery, then it cannot be held that this issue has not been considered or there is no application of mind by the AO. 8. Apart from that it would be very relevant to note that the Learned CIT (Appeals) in the impugned order has discussed this issue threadbare on merits and has come to the conclusion that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gainst the assessee. On going through the observations of the A.O. on page 10 of the assessment order, the findings of the assessing officer are not specific and only general observations had been made that details of expenses are not provided and the method of accounting followed by the assessee was not acceptable. The A.O. did not, however, point out any specific expense or detail maintained by the appellant, which were not acceptable to him. (c) On going through the facts of this specific case it appears that one of the crucial factors regarding this dispute of treating the eclass projects as work-in-progress or finished stock is related to the terms of agreement with Government of Uttranchal and the nature of the product related to e- class projects. The A.R. has vehemently argued that so far as e-class projects are concerned, since they are complete and ready at the end of the financial year, there was no logic or basis for treating the same aswork-in-progress. The assessing officer has also not pointed out anyreason to dispute this fundamental argument of the appellant that these items were not actual work-in-progress and should, therefore, not be treated as work-in-progre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....). We find that Hon'ble Jurisdictional High Court in DIT (Intl. Tax) vs. Rolls Royce Industrial Power India Ltd. (supra) after considering catena ofjudgments of the Hon'ble Delhi High Court including the case of CIT vs. Usha International Ltd. (supra) relied upon by Ld. CIT (A)and also the decision of Hon'ble Supreme Court in the case of CIT vs. Kelvinator of India (2010) 320 ITR 561 (SC), held that if the reopening is not based on any new material and merely revisiting the same material amounts to "change of opinion" which cannot be upheld. The relevant conclusion of the Hon'ble High Court reads as under:- "18. There is no manner of doubt that the decision of the DB of this Court in Consolidated Photo and Finvest. Ltd. v. Assistant Commissioner of Income-Tax (supra) is no longer good law. The main plank of the Revenue's case before this Court, therefore, fails. Nevertheless, the Court proceeds to examine the question of validity of the reopening of the assessments for the AYs in question. 19. The fact of the matter is that during the course of the original assessment under section 143(3), the A.O. did serve upon the assessee a detailed questionnaire. The A....