TaxTMI 
TaxTMI 
2026 (5) TMI 607
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....sessee has claimed set off of brought forward business loss of Rs. 1,14,74,526/- against current years interest income of Rs. 1,14,63,496/- which as per the AO is contrary to the provisions of section 72 of the Act. The AO further observed that since interest income taxable under the head "Income from other sources", therefore, no set off could be claimed for the brought forward business loss against the interest income taxable under the head Income from other sources. Thereafter, the reassessment order was passed, disallowing the claim of the assessee of set off of brought forward business loss and accordingly, total income was assessed at Rs. 1,14,74,526/-. 3. Against the said order, assessee filed an appeal before the Ld. CIT(A) who partly allowed the claim of the assessee and allowed the set off of brought forward business loss against the income earned on FDRs with bank made for the purpose of margin money to avail loan being income from business and deleted the addition to the extent of Rs. 80,20,400/- i.e. the interest income on FDR and confirmed the balance disallowance made by the AO. 4. Against the said order, the assessee is in appeal before the Tribunal wherein th....
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....n from interest income from loans & advances given to Group / subsidiary companies." 5.1 It is stated that the additional grounds of appeal goes to the root of the matter and only legal issues are raised for which all the facts are available on record and no verification is required, therefore, it is prayed to admit the same. For this, reliance is placed on the judgment of NTPC ltd. reported in 229 ITR 385 (SC) and Gedore Tools Pvt. Ltd. reported in 238 ITR 268 (Delhi). 6. On the other hand, the Ld. Sr. DR vehemently opposed the admission of the additional grounds and submits that they required verification of facts, therefore, the same should not be admitted at this stage. 7. Heard both the parties and perused the materials available on record. From the perusal of additional grounds of appeal, it is observed that in the additional grounds, assessee has challenged the satisfaction recorded before the grating the approval for reopening the assessment u/s 147 of the Act and further challenged the action of the AO in not allowing set-off of brought forward unabsorbed depreciation out of interest income earned from term loans and advances given to subsidiary/group companies. S....
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....ere initiated much before the aforesaid amendment thus solely based on revenue audit objection without referring to any fresh and tangible materials reopening of completed assessment deserves to be hold bad in law and consequent reassessment order passed be cancelled. The Ld. AR placed reliance on the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Sibbhaoli Sugar Mills Ltd. reported in (2011)333 ITR 470 (Delhi) and on the judgement of hon'ble Delhi High court in the case of FIS Global Business Solutions India (P) Ltd. vs. ACIT reported in 408 ITR 75 (Del.) wherein the hon'ble high Court has held that reassessment based on review of material already on record of assessment made under s. 143(3) is change of opinion, hence, invalid. Further held that audit objection does not constitute reason to belief for the purpose of initiating reassessment proceedings. Ld. AR further placed reliance on the judgment of the Hon'ble Delhi High Court in the case of PCIT vs. Network Programme India Ltd. reported in [2024] 461 ITR 37 (Delhi). He prayed accordingly. 10. On the other hand, the Ld. Sr. DR submits that the assessee has not participated before the AO and the reassessment....
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....e that the income amounting to Rs. 1,14,63,496/-has escaped assessment for A.Y. 2015-14 on account of failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment of A.Y. 2013-14. Notice u/s 148 of the I.T Act is required to be issued for A.Y. 2013-14." 12. From the perusal of the same, it could be seen that the reopening has been done on the basis of revisit of the assessment records and the Revenue audit objection raised dated 08.02.2017 which was to be complied with by the AO immediately, the same is reproduced herein below: 13. AS observed above, from the perusal of the reasons recorded for reopening the assessment, it is observed that AO solely on the basis of Revenue audit objection has proceeded to reopen the assessment without their being any fresh and tangible material referred nor any independent satisfaction has been recorded. From the reasons it appears that all the material available on record, revenue audit party has raised the objection, therefore, it cannot be said that assessee has failed to disclosed truly and fully all the material facts necessary for the assessment. The formation of belief on same mat....
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....amme India Ltd. (supra) has held as under: "Reassessment-Validity-Audit objection-vis-a-vis lack of new tangible material-In the present case, the respondent/assessee had made full disclosure relating to why it had debited the expenses incurred by it, i.e., on software development for business purposes, in the note appended to the computation of income in the return of income filed qua the relevant assessment year-Thus, there is no dispute about the fact that the original assessment was completed under s. 143(3), via order dt. 24th April, 2005-Therefore, given this factual position, agreeing with the view taken by the Tribunal, that this was a case of change of opinion and, therefore, the reassessment proceeding could not have been triggered merely on the basis of audit objection, without any fresh tangible material-Accordingly no substantial question of law arises for consideration. 16. Admittedly, in the instant case the reopening was done on the basis of revenue audit objection which is based on the material already available on record. Therefore, there can be no doubt in the facts of this case that the reopening of the assessment by the impugned notice is merely on ....