TaxTMI 
TaxTMI 
2016 (6) TMI 1245
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....peals) has erred in upholding the additions of Rs. 5,67,76,733/- in respect of interest receivable from GSIL on the same reasoning is given in the appellate order of A.Y. 2006-07, in which disallowance was confirmed on the assumption that right to receive interest from GSIL to whom the appellant had advanced a loan during the A.Y. 1994-95 had accrued to appellant. It is submitted that on the facts and circumstances of the appellant's case the CIT(A) ought to have deleted the same. It is submitted it be so held now. 3.1 Without prejudice to above, The learned CIT(A) erred in not adjudicating the ground no. 6.1 of the appellant that assessing officer erred in holding that the amounts given to GSIL were out of borrowed funds and accordingly also the interest amount of Rs. 5,67,76,733/-was disallowable under section 36(1)(iii) of the Act. In the facts and circumstances of the case it is submitted that amount given to GSIL is out of own funds and this fact had been upheld by the ITAT and hence no disallowance is called for u/s. 36(1)(iii) of the Act. It is submitted that it be held so now. 3.2 Without prejudice to above the learned Commissioner of Income Tax (Appea....
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.... "During the year, the assessee has claimed depreciation of Rs. 12,54,94,512/- Under section 32(iia) of the I.T. Act, 1961, in the case of any new machinery of plant (other than ships and air crafts) which has been acquired and installed after the 31st day of March, 2002, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to fifteen percent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii). 2. During the year the assessee company claimed total addition depreciation of Rs. 12,54,94,512/- on new machinery acquired and installed. The detailed scrutiny of the cost of machinery, date of acquisition, and date of put to use furnished in Annexure B of Form No 3AA disclosed that certain expenditure was incurred prior to 1.4.2002 and some are as old as of 9.8.99. Details of these expenses of earlier period are given in the statement enclosed. So these expenses cannot be treated as expenses relating to the expenses cost paid against those plant and machinery purchased after 1.4.02. So, the additional expenditure allowed at 15% on total amount of Rs. 61,01,69,488/- to be disal....
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....he case of State Bank of Travancore V/s. CIT 158 ITR 102, 154 (SC), Western India Oil Distributing Co. V/s. CIT 206 ITR 359 (Bom) and Navin R. Kamani V/s. ITO 185 ITR 408 (Bom). 6. In view of the above facts, I have to reason to believe that the income has escaped and hence proceedings for reopening of the assessment by issue of notice u/s. 148 of the Act have been initiated." 4. The Assessing Officer accordingly issued section 148 notice on 24-03-2008. The assessee filed return on 23-04-2008 admitting income of Rs. 113,27,36,152/- with book profits of Rs. 10,74,01,354/- computed in earlier regular assessments. It also sought copy of reopening reasons. The same stood furnished. The assessee filed its petition dated 19-05-2005 objecting to validity of reopening by terming it as mere change of opinion. The Assessing Officer rejected this petition in his order dated 22-05-2008. This followed the impugned reassessment being framed 29-12-2008 involving disallowances/additions of additional depreciation, inventory written off and interest income on GSIL loan of Rs. 4,57,62,711/-, Rs. 2,47,85,301/- and Rs. 5,67,76,733/-; respectively. 5. The assessee preferred appeal. Its f....
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....efore, it was submitted that the AO sought to change the opinion on same set of facts which were available to him in the original assessment proceedings and that no income chargeable to tax has escaped assessment and that the reassessment proposal based on the change of opinion on same set of facts available at the time of passing the order under section 143(3) is not warranted. Reliance was placed by appellant on decision of recent Supreme Court decision in case of Kelvinator India Ltd., Garden Silk Mills Ltd. 222 ITR 68 (Guj) and Birla VXL Ltd/217 ITR l(Guj). 5.3 I have gone through the contentions of the appellant and the assessment order. In this case return was filed on 28-11-2003. Notice u/s. 148 was issued on 24-03-2008 i.e. within four years from the end of the assessment year in which return filed. It is also seen from the assessment order that Assessing Officer has also provided the reasons for reopening. Further sufficient opportunities were given to assessee to represent its case and in fact assessee did cooperate and attended reassessment proceedings and filed written submissions. The proviso to section 147 is attracted where the assessment has been completed ....
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....erials were not before the Assessing Officer the question of change of opinion does not arise." 5.7.3 Similar was the observation in the case of ITO vs. Mahadeo Lal Tulsyan 111 ITR 25(Cal). "The formation of opinion is a positive act on the part of Assessing Officer and the opinion is said to be formed where there is application of mind with reference to material on' record and the provisions of the statute and in case in earlier proceedings no such opinion is formed it cannot be contended that the reassessment proceedings were initiated on mere change of opinion. Mere assessment in routine manner did not lead to inference that the opinion was formed in respect of issues involved in the assessment." Hence in view of above the Assessing Officer is justified in invoking the provisions of section 147 and ground No. 1 & 2 therefore stand dismissed." This leaves the assessee aggrieved. 6. Learned authorized representative states in the course of hearing that the Assessing Officer had reopened the above stated regular assessment on three counts(supra). He takes to section 142 notice dated 20.07.2005 issued in the course of scrutiny inter alia raising specific ....
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....d authorized representative takes us its audit report clause 9(i) clarifying on this interest issue that neither there was any interest stipulation in loan agreement with GSIL nor had the assessee made any corresponding income interest income provision in its books. Its case is that no interest would have been booked in these circumstances so as to give rise to any conclusion of escapement of any such income from being assessed. His further case is that a reopening in any case cannot be a mere change of opinion in absence of any fresh tangible material and the Revenue's case law (supra) itself reiterate the very legal principle. He comes to tribunal's order thereafter to submit that reopening reasons in these two assessment years are not similar. 9. Heard both sides. Case file perused. There is no dispute about the fact that the Assessing Officer issued section 142 notice to the assessee raising specific queries on 20-07-2005. There is no issue between the parties that clause 7 and 17 therein forming pages 255 and 256 of the paper book asked the assessee to produce all necessary details pertaining to depreciation/additional depreciation and inventory written off amounting Rs. 2.....