2017 (10) TMI 103

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....e reopening of assessment on the issues recorded in reasons for reopening of assessment? (2) Whether on the facts and circumstances of the case and in law, the ITAT erred in not appreciating that the Assessing Officer had validity reopened assessment in accordance with the provision of section 147 of the Act read with clause(c) of Explanation2 below section 147 of the Act?" The issue pertains to validity of reopening of an assessment in case of the respondent assessee for the assessment year 2003-2004. The Assessing Officer had recorded the following reasons for issuing the said notice : "During the year, the assessee has claimed depreciation of Rs. 12,54,94,512/Under section 32(iia) of the IT Act, 1961, in the case of ....

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....s per Income tax Act, the loss of inventory by way of theft, fire, etc is allowed as expenses/revenue loss. But when the assessee receives the insurance claim against such loss will be offered as income of the year in which it is received. Here the assessee themselves treated certain inventory as absolute and cost of it has been debited in the profit and loss account. This loss is due to the mistake on the part of the assessee of plan out properly the requirement of inventory and its timely use to production. 4. So, the action of the assessee to write off the inventory treating it is absolute is not justified. Omission to disallow the claim resulted into escaped income of Rs. 2,47,85,301/with consequent short levy of tax of Rs. 1,2....

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....been initiated." Despite objections from the assessee, the Assessing Officer and the CIT(Appeals), both held that reopening was valid and made certain additions. Thereupon, the assessee approached the Tribunal. The Tribunal noted that the notice for reopening was based on three separate grounds as recorded in the reasons. In case of first two out of these three grounds, it was an admitted position before the Tribunal that the issues were examined by the Assessing Officer during the original scrutiny assessment who had made no additions. The Tribunal was therefore, of the opinion that any reopening on the basis of such grounds would amount to change of opinion and therefore, not permissible. The Revenue's contention that the Assess....