AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1134
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....ment proceeding is void and may kindly be quashed. 3. Ground 3: That Order of CIT(A) has been framed on Reassessment Order which itself is defective as reopening has been done merely for the change of Opinion of completed Assessment. Hence, Order of AO making the reassessment as well as Order of CIT(A) in sustaining the same may kindly be Quashed. 4. Ground 4: That on the facts and in the circumstances of the case and in law the Ld. CIT(A) was not justified in rejecting the ground of appeal raised to the effect that ex-parte assessment finalized u/s 144 was not valid leading to change of Opinion in view of the fact Ld. A.O. in his assessment order U/s 143(3) has already considered Interest payment to loan from ICICI bank and LIC and he has allowed assessee claim of payment interest. 5. Ground 5: That the AO while making the disallowance has stated that the Interest expended is not allowable as deduction u/s 57 as said funds were used by the assessee to earn Business Income. AO while framing the Assessment has to determine correct and true Income. If AO is of the Opinion that the Interest Expended is towards Business Income and if he intends to enhance ....
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....ring the fact that the assessee had wrongly claimed deduction of Rs. 6,27,368/- u/s.57 of the Act (including interest paid to ICICI of Rs.6,09,143/- and interest on LIC loan of Rs.18,225/-), as the same as per the A.O was not in the nature of an expenditure that was borne wholly and exclusively for earning of the interest income of Rs. 5,04,040/- u/s.56 of the Act, therefore, while framing the re-assessment he disallowed the assessee's claim for deduction of interest expenditure which though was earlier allowed by his predecessor while framing the original assessment u/s.143(3) of the Act, dated 16.03.2015. Accordingly, the A.O vide his order passed u/s.144 r.w.s. 147, dated 28.11.2019 reassessed the income of the assessee at Rs.10,28,463/-. 4. Aggrieved, the assesee carried the matter in appeal before the CIT(Appeals) but without any success. 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me. 6. I have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been press....
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....sessment proceedings. The Ld. A.R in order to fortify his aforesaid contention had taken us through the copy of the original assessment order passed by the A.O u/s.143(3), dated 16.03.2015, Page 8 to 10 of APB. Also, it was claim of the Ld. AR that the assessee's claim for deduction of the interest expenditure in question had been allowed by the A.O while framing the assessment immediately succeeding year i.e. A.Y.2013-14 vide his order passed u/s.143(3), dated 27.03.2016. On the basis of the aforesaid facts, it was the claim of the Ld. AR that the reopening of the concluded assessment of the assessee on the basis of the same set of facts, which were not only available on record but had been deliberated upon by the A.O while framing of the original assessment was not permissible in the eyes of law, and thus, the re-assessment therein framed was liable to be quashed on the said count itself. The Ld. A.R in support of his aforesaid contention had relied on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) and that of the Hon'ble High Court of Delhi in the case of Rasalika Trading & Investment CO. (P) Ltd. Vs. Deputy Comm....
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....l consideration, I find substance in the claim of the Ld. AR that the A.O had merely on the basis of a change of opinion on the same set of facts that were not only available on his record, but had in fact been deliberated upon by his predecessor while framing of the original assessment u/s.143(3), dated 16.03.2015, reopened the concluded assessment of the assessee. I, say so, for the reason that a bare perusal of the original assessment order passed by the A.O u/s. 143(3), dated 16.03.2015 reveals beyond doubt that the issue that the assessee had utilized the loan funds of Rs.46,43,681/- raised from ICICI and LIC for making an investment with Balaji Distributors (supra) from where she was in receipt of interest @ 12% a/w. share of profit was specifically looked into by the A.O while framing the original assessment vide his order passed u/s 143(3), dated 16.03.2015. On a perusal of the records, I find that the A.O while framing the original assessment had found the assessee's claim for deduction of interest expenditure u/s 57 in order, and had not drawn any adverse inferences as regards the same, Para 4 of the assessment order. On the basis of the aforesaid facts, I am of the consi....
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....s "reason to believe" but also inserted the word "opinion" in s. 147 of the Act. However, on receipt of representations from the companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the AO. We quote hereinbelow the relevant portion of Circular No. 549, dt. 31st Oct., 1989 [(1990) 82 CTR (St) 1], which reads as follows: " "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression "reason to believe" in s. 147.-- A number of representations were received against the omission of the words "reason to believe" from s. 147 and their substitution by the "opinion" of the AO. It was pointed out that the meaning of the expression, "reason to believe" had been explained in a number of Court rulings in the past and was well settled and its omission from s. 147 would give arbitrary powers to the AO to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended s. 147 to reintroduce the expression "has reason to believe" in place of the words "for reasons to be recorded by him in ....