TaxTMI 
TaxTMI 
2021 (6) TMI 497
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....s return of income on 24-09-2009 declaring total income of Rs. 6,49,85,349/-. Assessment in case of the assessee was originally completed under section 143(3) of the Act vide order dated 14-11-2011 accepting the returned income. Subsequently, the assessing officer having noticed that as against interest receivable shown of Rs. 1,33,76,713/- the assessee has offered interest income of Rs. 1,04,08,562/-, thereby, offering less interest income, came to the conclusion that income chargeable to tax for the year under consideration has escaped assessment. Accordingly, he reopened the assessment under section 147 of the Act. In course of re-assessment proceedings, the assessing officer called upon the assessee to explain the reason for not offering the correct interest income. In response to the notice issued under section 148 of the Act, the assessee raised objection stating that there is no question of less interest income being offered by the assessee. Therefore, the proceeding initiated under section 147 of the Act has to be dropped. After rejecting the objection of the assessee in a separate order, the assessing officer proceeded to complete the assessment under section 143(3) r.w.....
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...., in response to the query raised, assessee furnished details with a point-by-point reply vide submission dated 11-08-2011 with all supporting documents. He submitted, subsequently, again on 08-11-2011 assessee furnished further details before the assessing officer. He submitted, after making proper enquiry and verifying all the facts and materials available on record, the assessing officer ultimately completed the assessment under section 143(3) of the Act on 14-11-2011 accepting the income returned by the assessee. Therefore, he submitted, there being no failure on the part of the assessee in disclosing all material facts relating to its assessment truly and correctly, reopening of assessment beyond four years is invalid. Proceeding further, he submitted, while reopening the assessment, no tangible material was available with the assessing officer. He submitted, merely having a second look at the material available in course of the original assessment proceedings, the assessing officer has formed an opinion that income has escaped assessment. He submitted, after completion of the original assessment and before reopening of assessment under section 147 of the Act, no tangible mat....
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...., interest income amounting to Rs. 1,04,08,562/- was rightly offered to tax as the amount of Rs. 33,13,356/- shown as receivable was actually not received as it is a broken period interest. He submitted, now it is fairly well settled that broken period interest is not taxable. In this context, he drew our attention to the following decisions:- 1. Akshar Anshul Construction LLP vs ACIT (104 taxmann.com 94)(Bom) 2. Amruta Quarry Works vs ITO - ITA No.270/Ahd/2015(Ahd) 3. ICICI Home Finance Co. Ltd vs ACIT ( 25 taxmann.com 241)(Bom) 4. State Bank of India vs ACIT (418 ITR 485)(Bom) 5. Pr.CIT vs State Bank of Saurashtra (100 taxmann.com 437)(Bom) 6. CIT vs Shakardas B Pahajani 93 taxmann.com 248)(Bom) 7. American Express International Banking Corpn vs CIT 258 ITR 601 (Bom) 7. CIT vs CitiBank N.A. (Civil Appeal No.1549 of 2006)(SC) 8. JCIT vs Dena Bank (20 taxmann.com 278)(Mum) 9. State Bank of India vs DCIT (44 taxmann.com 99)(Mum) 10. Standard Chartered Bank vs DCIT (54 ITD 570)(Bom) 6. The learned departmental representative strongly relied upon the observations of the assessing officer and learned Commissioner of Income-tax (Appeals). 7. We have considered ri....
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....sessment. On factual analysis, as narrated above, we are of the view that no such failure on the part of the assessee as contemplated in the proviso to section 147 of the Act could be demonstrated by the revenue authorities. That being the case, the conditions of the proviso to section 147 of the Act are not fulfilled. Therefore, for this reason alone, the reopening of assessment under section 147 of the Act is invalid. 10. Having held so, it is necessary to examine whether, before reopening of assessment the assessing officer had any tangible material in his possession to indicate escapement of income. On a perusal of reasons recorded for reopening of assessment, a copy of which is at page 38 of the paper book, we find that the assessing officer has very clearly stated that on perusal of record and more particularly, on examining the balance-sheet as on 31-03-2009, he has found that as against interest receivable shown at Rs. 1,33,76,712/-, assessee has offered interest income of Rs. 1,04,08,562/-. Thereby, the assessee has offered less interest income. Thus, from the aforesaid facts it is patent and obvious that between completion of the original assessment and reopening of asse....