TaxTMI 
TaxTMI 
2018 (12) TMI 626
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....(in short "the Act") dated 10.12.2012 for the Assessment Year 2008-09. 2. The only ground raised by the assessee is with regard to challenging the validity of re-opening proceedings u/s 147 of the Act and consequentially bringing to tax a sum of Rs. 34,58,000/- towards interest income on loan advanced to Six Sigma Gases Pvt. Ltd. on notional basis. 3. The brief facts of this issue are that the return of income for the assessment year 2008-09 was filed by the assessee company on 23.09.2008. The assessee was completed u/s 143(3) on 02.12.2010 determining total income at Rs. 62,10,223/-. Later the assessment was sought to be reopened by issuance of notice u/s 148 of the Act dated 27.04.2012. The reasons recorded by the ld. AO for reopeni....
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....eserve and not out of borrowed capital, the assessee had charged interest on the advance during financial year 2005-06 and 2006-07 and only the poor financial health of the said company could not be the reason for not charging the interest in the FY 2007-08 if the assessee had been following mercantile system of accounting. As per provision of the Act, writing off bad debt of an amount in the P/L account entitles an assessee to claim deduction in the computation of tax." Yours Faithfully (P.B.Pramanik) JCIT, (OSD), Circle-4, Kolkata. The assessee filed objections to the said reasons vide its letter dated 18.09.2012 wherein it was specifically brought to the notice of the ld. AO that in the course of original as....
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....pany in respect of interest on amount advanced to Six Sigma Gasses Pvt. Ltd. It was specifically pointed out by the assessee while filing the objections to the reasons recorded in the reassessment proceedings that since this issue was already examined by the ld. AO in the original assessment proceedings, reopening of the assessment on the same issue on which decision was already taken by the ld. AO after due application of mind, tantamount to change of opinion and accordingly it was contested that the reopening was not in accordance with law. The assessee placed reliance in support of this proposition on various decisions of Hon'ble Supreme Court and Hon'ble Jurisdictional High Court. It was also pointed out that there was no allegation tha....
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....erest on the said advance during assessment years 2006-07 and 2007-08. Accordingly, he held that non-charging of interest for assessment year 2008-09 represents income escaping assessment and hence the same is required to be brought to tax in the sum of Rs. 34.58 lacs. This action of the ld. AO was upheld by the ld. CIT(A). Aggrieved the assessee is in appeal before us. 5. We have heard rival submissions. At the outset, we find that the reopening of the assessment for the assessment year 2008-09 has been made within the four years from the end of the relevant previous year. Hence the applicability of that proviso to section 147 on the aspect of failure of the assessee to make full and true disclosure of the facts does not apply in the in....
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....ge of opinion on the part of the ld. AO. It is now well settled that section 147 of the Act does not postulate conferment of power upon the ld. AO to initiate reassessment proceedings upon his mere change of opinion. If reason to believe of the ld. AO is founded on an information which might have been received by the ld. AO after completion of assessment, it might be a sound foundation for exercising the power u/s 147 of the Act. When a regular assessment u/s 143(3) has been made earlier, a presumption can be raised that such an order has been passed on due application of mind. It is well known that a presumption can also be raised to the effect that in terms of section 114(e) of the Indian Evidence Act and judicial and official acts have b....