AAVKAR INFRASTRUCTURE COMPANY V. INCOME TAX OFFICER WARD - 9 (2)

SCA/12129/2014

AI Insights

The case revolves around the reopening of an income tax assessment for Aavkar Infrastructure Company for the assessment year 2009-2010. The Income Tax Officer issued a notice under section 148 of the Income Tax Act, 1961, seeking to reopen the assessment based on the alleged underassessment of income related to land transactions and claims under section 80IB(10) of the Act. The petitioner contested the notice, arguing that the issues had been thoroughly examined in the original assessment, and the reopening constituted a mere change of opinion. The court examined various precedents and the specifics of the case, ultimately deciding in favor of the petitioner, emphasizing that the Assessing Officer had previously applied his mind to the issues and could not reopen the assessment based on a different angle of the same facts.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 694639 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 02-11-2015
• Assessment Year: misc
• Other Referred Cases: Cliantha Research Ltd. v. Deputy Commissioner of Income-Tax, Ahmedabad Circle - I, H.K. Buildcon Ltd. v. Income-tax Officer, Sarla Rajkumar Verma v. Assistant Commissioner of Income-tax, Sai Consulting Engineers Pvt. Ltd. v. Deputy Commissioner of Income-Tax, J.V. Agrawal v. Income-tax Officer, Heavy Metal & Tubes Ltd. v. Deputy Commissioner of Income-Tax, Ahmedabad, Circle - 4, Commissioner of Income-tax v. Fag Bearing India Ltd., Parixit Industries (P) Ltd. v. Assistant Commissioner of Income-tax, Lanxess ABS Limited v. Deputy Commissioner of Income-Tax, Vodafone Essar Gujarat Ltd. v. Assistant Commissioner of Income-tax, National Dairy Development Board v. Deputy Commissioner of Income-Tax, United Phosphorus Ltd. v. Additional Commissioner of Income-Tax, Gala Gymkhana (P) Ltd. v. Assistant Commissioner of Income Tax, Aquagel Chemicals P. Ltd. v. Assistant Commissioner of Income Tax, Sun Pharmaceuticals Industries Limited v. Deputy Commissioner of Income-Tax, Gruh Finance Limited v. Joint Commissioner of Income Tax (Assessment)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NITIN MEHTA
• Assessee Lawyers: R K PATEL
• Keywords: Capital Gains; Change of opinion; Deduction under Section 80IB(10); Reopening of assessment; Jurisdiction to reopen assessment
• Section: 148; 143(3); 143(2); 45(2); 80IB(10)

Judgement Text

"C/SCA/12129/2014 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO.12129 of 2014 FOR APPROVAL AND SIGNATURE: HONOURABLE MS. JUSTICE HARSHA DEVANI and HONOURABLE MR. JUSTICE A.G.URAIZEE ============================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment? 2 To be referred to the Reporter or not? 3 Whether their Lordships wish to see the fair copy of the judgment? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder? ============================================= AAVKAR INFRASTRUCTURE COMPANY....Petitioner(s) Versus INCOME TAX OFFICER WARD - 9 (2) & 1....Respondent(s) ============================================= Appearance: MR RK PATEL, ADVOCATE for the Petitioner(s) No.1 MR NITIN K MEHTA, SR. STANDING COUNSEL for the Respondent(s) No.1 - 2 ============================================= CORAM: HONOURABLE MS. JUSTICE HARSHA DEVANI and HONOURABLE MR. JUSTICE A.G.URAIZEE Date : 02/11/2015 ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE HARSHA DEVANI) 1. This petition under Articles 226 and 227 of the Page 1 of 19 C/SCA/12129/2014 JUDGMENT Constitution of India is directed against the notice dated 31st March, 2014 issued by the first respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), whereby the assessment of the petitioner for the assessment year 2009-2010 is sought to be reopened. 2. The petitioner, a firm, filed its return of income for assessment year 2009-2010 along with the relevant supporting annexures and statements of income. Notice under section 143(2) of the Act came to be issued by the Assessing Officer pursuant to which replies came to be filed by the petitioner from time to time. The assessment order came to be framed under section 143(3) of the Act after making disallowance of a portion of the claim under section 80IB(10) of the Act. Subsequently, by the impugned notice, the assessment is sought to be reopened, which has given rise to the present petition. 3. Mr. R.K. Patel, learned advocate for the petitioner invited the attention of the court to the reasons recorded for reopening the assessment to submit that the same clearly reveal that the Assessing Officer seeks to reopen the assessment on verification of the case record and that there is no new tangible material for the purpose of reopening the assessment. According to the learned counsel, at the time when the initial assessment came to be finalised under section 143(3) of the Act, the claim under section 80IB(10) of the Act was thoroughly examined from all possible angles, including under section 45 thereof, and a portion of such claim was disallowed, under the circumstances, the reopening of assessment is clearly based upon a change of opinion. It was Page 2 of 19 C/SCA/12129/2014 JUDGMENT pointed out that against the partial disallowance of the claim for deduction under section 80IB(10) of the Act, the petitioner had preferred appeal before the Commissioner of Income-tax (Appeals) who had decided the issue against the petitioner by an order dated 20th March, 2014 and the petitioner’s appeal against such order is pending before the Tribunal. In the meanwhile, the present notice has been issued under section 143(3) of the Act. Strong reliance was placed upon the decision of this court in the case of Cliantha Research Ltd. v. Deputy Commissioner of Income-Tax, Ahmedabad Circle - I, (2013) 35 taxmann.com 61 (Gujarat), wherein the court had recorded that in response to queries raised by the Assessing Officer, the petitioners had given detailed replies and produced voluminous material to support the claim of deduction. It could not, therefore, by any stretch of imagination be stated that such claim of deduction under section 80IB(8A) of the Act was not examined by the Assessing Officer in the original assessment. It may be that he did not raise specific query as regards the allowability of the claim on the premise that the petitioner was doing scientific research for and on behalf of the companies. The court, however, was of the opinion that merely for the failure of the Assessing Officer to raise such a question, would not authorise him to reopen the assessment even within a period of four years from the end of the relevant assessment year. Any such attempt on his part would be based on mere change of opinion. To reiterate, when a claim was processed at length and after calling for detailed explanation from the assessee, the same was accepted, merely because a certain element or angle was not in the mind of the Assessing Officer while accepting such a claim, cannot be a ground for issuing notice for reassessment. It was pointed Page 3 of 19 C/SCA/12129/2014 JUDGMENT out that the special leave petition filed by the revenue against the above decision has been dismissed by the Supreme Court. 3.1 Reliance was also placed upon the decision of this court in the case of H.K. Buildcon Ltd. v. Income-tax Officer, (2012) 21 taxmann.com 83 (Gujarat), wherein the court had noted that on the same set of facts and material available on record, the successor Assessing Officer had come to form a different opinion and recorded reasons thereupon without establishing any lapse on the part of the petitioner or any fresh information. The court reiterated the principles enunciated by the Supreme Court in the case of CIT v. Kelvinator of India Ltd., (2010) 320 ITR 561, and held that the reasons recorded indicated that the successor Assessing Officer had merely recorded a different opinion in relation to an issue to which the Assessing Officer, who had framed the original assessment, had already applied his mind and come to a conclusion. Reliance was placed upon a decision of this court in the case of Sarla Rajkumar Verma v. Assistant Commissioner of Income-tax, (2014) 43 taxmann.com 372 (Gujarat) for the proposition that where the Assessing Officer allowed the assessee’s claim for deduction under section 80IB(10) of the Act after making detailed enquiries, he could not initiate reassessment proceedings on the basis of the same material taking a view that the said claim was wrongly allowed. 3.2 Reliance was placed upon an unreported decision of this court in the case of Sai Consulting Engineers Pvt. Ltd. v. Deputy Commissioner of Income-Tax, Special Civil Application No.1118/2015 rendered on 29th April, 2015 wherein the court had followed the earlier decision of this court in the Page 4 of 19 C/SCA/12129/2014 JUDGMENT case of Cliantha Research Limited (supra). The decision of this court in the case of J.V. Agrawal v. Income-tax Officer, (2014) 220 Taxmann 32 (Gujarat), was cited for the proposition that “the reason to believe” and the “opinion” to be formed by the Assessing Officer for the purpose of exercise of powers under section 147 have to be guided by tangible material available with him at the time of proceeding to reopen and record reasons for reopening and that such material was not with him when he undertook the original assessment. Reliance was also placed upon the decision of this court in the case of Heavy Metal & Tubes Ltd. v. Deputy Commissioner of Income-tax, Ahmedabad, Circle - 4, (2014) 364 ITR 609 (Gujarat), for the proposition that reopening of assessment made on the very same claim on the basis of the same material, is a mere change of opinion and impermissible. Reliance was also placed upon the decision of this court in the case of Commissioner of Income-tax v. Fag Bearing India Ltd., (2013) 33 taxmann.com 238 (Gujarat), where the assessee’s claim for exemption under section 10B was allowed after scrutinising it in detail. The court held that subsequently the Assessing Officer could not initiate reassessment proceedings merely on the basis of change of opinion that apportionment of expenses between two units of the assessee i.e. EOU and another eligible unit, was not proper. The decision of this court in the case of Parixit Industries (P) Ltd. v. Assistant Commissioner of Income-tax, (2012) 20 taxmann.com 750 (Gujarat) was cited for a similar proposition of law. Reliance was also placed upon an unreported decision of this court in the case of Lanxess ABS Limited v. Deputy Commissioner of Income-Tax rendered on 11th April, 2012 in Special Civil Application No.17530/2011. Page 5 of 19 C/SCA/12129/2014 JUDGMENT 3.3 The decision of this court in the case of Vodafone Essar Gujarat Ltd. v. Assistant Commissioner of Income- tax, (2012) 344 ITR 447 Gujarat, was cited wherein the original order passed by the Assistant Commissioner had merged into the order of the Commissioner of Income-Tax (Appeals). The Commissioner of Income-Tax (Appeals) considered the claim and order giving effect was passed wherein the third issue was considered. The order passed by the Commissioner of Income-Tax (Appeals) was reversed by the Tribunal on that issue. The court held that if the Department had any grievance against the order of the Tribunal, it should have filed appeal before the court challenging the said order. It could not give rise to reopening of the assessment as there was no failure or omission on the part of the petitioner nor could it be said that there is a change of opinion. Reliance was also placed upon a decision of this court in the case of National Dairy Development Board v. Deputy Commissioner of Income-Tax, (2013) 353 ITR 538 (Guj.), for the proposition that by virtue of the second proviso to section 147 of the Act, income involving matters which are the subject matters of any appeal, reference or revision has expressly been taken out of the purview of the said section. The court held that insofar as the income stated to have escaped assessment under the second ground was concerned, the same having been the subject matter of appeal would not fall within the ambit of section 147 of the Act and as such, the Assessing Officer lacked jurisdiction to reopen the assessment on the said ground. Reliance was placed upon an unreported decision of this court in the case of United Phosphorus Ltd. v. Additional Commissioner of Income-Tax rendered on 8th Page 6 of 19 C/SCA/12129/2014 JUDGMENT March, 2011 in Special Civil Application No.3352/2001 for a similar proposition of law. 3.4 Mr. Patel submitted that the claim under section 80IB(10) having been considered by the Assessing Officer and such claim to the extent the same was partly disallowed having been subject matter of appeal before the Commissioner (Appeals), stood merged with the order of the Commissioner (Appeals), under the circumstances, insofar as the said subject matter is concerned, the Assessing Officer lacked jurisdiction to reopen the assessment. Besides, the Assessing Officer on the same set of facts seeks to reopen the assessment which is a mere change of opinion and hence, the Assessing Officer lacks jurisdiction to reopen the assessment under section 147 of the Act. The impugned notice under section 148, therefore, stands vitiated. 4. Vehemently opposing the petition, Mr. Nitin Mehta, learned senior standing counsel for the respondent invited the attention of the court to the reasons recorded for reopening the assessment to submit that there was no change of opinion in the present case and that the issue had not been considered from the angle of section 45(2) of the Act. It was pointed out that one Babubhai J. Desai, a partner of the firm had transferred the land in question to his capital account in the assessee firm’s books on 7th December, 2006. The assessee firm had claimed expenditure of Rs.1,91,84,250/- towards purchase of the land in its balance sheet for the year ended 31st March, 2009. It was submitted that the aspect of capital gains arising in the hands of the petitioner firm had never been gone into at the time of framing the original assessment and Page 7 of 19 C/SCA/12129/2014 JUDGMENT that there is nothing on record to show that the Assessing Officer has considered this issue. It was submitted that this court in exercise of powers under Article 226 of the Constitution of India would not go into the factum of the ultimate outcome of the proceedings. The only question is whether there is any change of opinion in the facts of the present case. It was submitted that the facts as emerging from the record clearly show that the entire aspect of capital gains was neither raised nor considered at the relevant time. Insofar as the contention that the claim under section 80IB of the Act having been examined by the Assessing Officer, the order of the Assessing Officer having merged with the Commissioner (Appeals), it was submitted that the issue of capital gains had never arisen out of the assessment order and hence, the same cannot be said to have merged with the appellate order for the purposes of section 147 or section 263 of the Act. It was submitted that in the present case, the assessment having been reopened within a period of four years, the only question that arises for consideration is whether an opinion was duly formed on the question of escapement and that the question as to whether there was a full and true disclosure is immaterial. 4.1 It was pointed out that the land in question had been transferred in the petitioner’s books of account on 7th December, 2006 and the cost of land was shown at Rs.1,91,84,250/-. However, the same was converted into stock- in-trade in the financial year 2008-09 relating to assessment year 2009-2010. Under the circumstances, the difference between the cost of investment and fair market value on the date of conversion was the capital gain accrued to the Page 8 of 19 C/SCA/12129/2014 JUDGMENT petitioner as per section 45(2) of the Act, which aspect has not been considered by the Assessing Officer at the time of framing the original assessment. In support of his submission, the learned advocate placed reliance upon the decision of this court in the case of Gala Gymkhana (P) Ltd. v. Assistant Commissioner of Income Tax, (2012) 211 Taxmann 447 (Guj.), wherein the court after examining the record of the case found that the question of treating entrance fees either as capital receipt or revenue receipt was not part of the queries raised by the Assessing Officer and, therefore, the angle of taxability of such a receipt being a receipt of revenue in nature, cannot be stated to be a part of the query raised by the Assessing Officer. The court observed that if the inquiry of the Assessing Officer was not with respect to the question of taxability of such a receipt, his action of not taxing such amount without assigning any reasons, cannot be seen as an act on his part of having formed an opinion with respect to non-taxability of such an amount. The court, accordingly, held that the notice cannot be said to be without jurisdiction or invalid. Reliance was also placed upon the decision of this court in the case of Aquagel Chemicals P. Ltd. v. Assistant Commissioner of Income Tax, (2013) 353 ITR 131, wherein the court in the facts of the said case had found that from the material on record, it could not be said that the Assessing Officer had specially called for information in relation to the issue in question. It was an undisputed position that there was no reference to the claim of depreciation in the assessment order and the only issue discussed therein pertained to disallowance under section 14A of the Act. The court held that insofar as the assessment order was concerned, it did not reflect any application of mind by the Assessing Officer to the Page 9 of 19 C/SCA/12129/2014 JUDGMENT claim of depreciation on coal fire boiler building while framing the assessment. The court, accordingly, held that the matter did not relate to change of opinion and upheld the reopening of assessment. 4.2 The decision of this court in the case of Sun Pharmaceuticals Industries Limited v. Deputy Commissioner of Income-Tax, (2013) 353 ITR 474 (Guj.) was cited for the proposition that inquiry at the stage of finding out whether the reassessment notice under section 148 of the Income Tax Act is valid is only to see whether there are reasonable grounds for the Income-Tax Officer to believe that income has escaped assessment and not whether the omission/failure and the escapement of income is established. Since the belief is that of the Income-Tax Officer, the sufficiency of reasons for forming the belief is not for the court to judge. Reliance was also placed upon the decision of this court in the case of Gruh Finance Limited v. Joint Commissioner of Income Tax (Assessment), (2000) 243 ITR 482, for the proposition that when no conscious consideration of the material was made, it would not create an embargo or ban on the competent officer to exercise powers under section 147 of the Act. 4.3 Insofar as the decisions on which reliance had been placed by the learned counsel for the petitioner, it was submitted that such decisions are not applicable to the facts of the present case, inasmuch as, in those cases, the court had recorded application of mind on the part of the Assessing Officer on the point at issue whereas in the facts of the present case, the Assessing Officer at the time of framing the original Page 10 of 19 C/SCA/12129/2014 JUDGMENT assessment has not applied his mind to the issue in question. It was, accordingly, urged that the petition be dismissed and the respondent be permitted to go ahead with the reassessment. 5. By the impugned notice dated 31st March, 2014, the respondent – Income Tax Officer seeks to reopen the assessment for the assessment year 2009-2010. Since the reopening is within a period of four years, the question of there being any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration would not be relevant. What is required to be examined is as to whether the reassessment is based upon a mere change of opinion as is sought to be contended on behalf of the petitioner. In this regard, a perusal of the record of the case reveals that at the relevant time while framing assessment under section 143(3) of the Act, the respondent had issued notice under section 142(1) of the Act calling for further details for assessment year 2009-2010, whereby he had inter alia called for further details regarding the supplementary partnership deed dated 1st September, 2007 whereby Shri Babubhai Desai had brought land as his capital. Various queries have been put with regard to the land brought as capital with supporting evidence and detailed working of profit/gain offered for income-tax when the land was brought as capital as also the income computation of Babubhai Desai for financial year 2006-07 and 2007-08. In response to the said notice, the petitioner by a communication dated 2nd September, 2011, had inter alia shown that Babubhai had shown short term capital gain of Rs.1,08,60,381/- in respect of the land in question and offered the same for tax in assessment year 2007-08. Subsequently, pursuant to an Page 11 of 19 C/SCA/12129/2014 JUDGMENT inquiry made by the Assessing Officer, the petitioner by a communication dated 15th November, 2014 had provided information stating that Shri Babubhai Desai had bought land admeasuring 46957 square metres, however, he had got final plot admeasuring 37763 square metres out of which he brought 30856.1 square metres of land as stock-in-trade. The balance land admeasuring 6906.9 square metres was retained by him. The price of the land is shown to be Rs.1,91,84,250/- and it is stated that the same is entered in the books. 6. At this stage, it would be germane to refer to the reasons recorded by the Assessing Officer for reopening the assessment:- “In this case, on verification of case record, for Asstt. Year 2009-10, it is noticed that as per Schedule-E of the balance-sheet for the year ended on 31/03/2009, the assessee has debited Rs.1,91,84,250/- as land purchased at Tragad under the head scheme expenses. It is further noticed that one person Shri Babubhai J. Desai is having 85% share in the said firm. It is further observed that Shri Babubhai J. Desai had transferred his land admeasuring 46957 sq. mts. @ Rs.500/- situated at Tragad bearing survey nos. 318, 327/1, 327/2 and sub plot No.3 to his capital account in the assessee firm’s books on 07/12/2006. While transferring his land at Tragad, Shir Babubhai J Desai has taken the value of land at Rs.1,91,84,250/- against the actual value of land at Rs.2,34,78,500/-. The said land becomes the capital of the firm from the date of transfer i.e. 07/12/2006. In view of this, the claim of the firm that it has made an expenditure of Rs.1,91,84,250/- towards purchase of land at Tragad under Scheme expenses in Schedule-E of its balance-sheet for the year ended on 31/03/2009 cannot be allowed. Thus, there is under assessment of income of the assessee to the extent of Rs.1,91,84,250/-. It is further noticed that the land situated at Tragad bearing Survey nos.318, 327/1, 327/2 and sub plot No.3 Page 12 of 19 C/SCA/12129/2014 JUDGMENT admeasuring 46957 sq. mtrs. becomes the property of the Firm by virtue of Shri Babubhai J Desai one of the partners of the Firm, bring this capital assets as his capital in the books of the assessee firm. The assessee Firm has developed the land under the project named Anand Vihar. The said land is transferred by the partner to the firm on 7/12/2006 and the firm has sold the same after developing, to different purchasers, in the previous year relevant to A.Y. 2009-10, the firm has sold this land to each Unit holder with super structure thereon and the profit arising out of such sale is considered by the Firm as business income and has claimed u/s. 80IB(10) of the I.T. Act, as fully exempt. As per sub section (2) of section 45 of the I.T. Act, which is reproduced below:- “Notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. The assessee should have paid short capital gain on the capital asset which is transferred as stock in trade and the profit arising out of this should have been charged to tax under the head “capital gains”, on the date of such transfer. The assessee has failed to do so.” 7. In connection with the reasons recorded by the Assessing Officer, the petitioner has raised objections whereby it has been submitted that the Assessing Officer had duly verified the claim of the petitioner for deduction under section 80IB(10) of the Act. The Assessing Officer had, during the assessment proceedings, called for explanation in respect of capital gains angle and eligibility of deduction under section Page 13 of 19 C/SCA/12129/2014 JUDGMENT 80IB of the Act. The Assessing Officer had scrutinised all the details of land pertaining to project, survey numbers, ownership for capital gains, taxation, etc. for eligibility of deduction under section 80IB(10) of the Act. Therefore, the reopening was based upon a mere change of opinion. 8. A perusal of the order disposing the objections reveals that the Assessing Officer has merely referred to various decisions without adverting to the facts of the case and has not discussed as to why the objections raised by the petitioner are not acceptable to him. In the entire order, there is no reference to the facts of the case and the merits of the objections raised by the petitioner. In the opinion of this court, the Assessing Officer does not appear to have understood the true purport of the decision of the Supreme Court in the case of GKN Driveshafts (India) Ltd. v. Income-Tax Officer and others, (2003) 259 ITR 19, wherein it has been held that on receipt of reasons, the noticee is required to file objection to issuance of notice and the Assessing Officer is bound to dispose of the same by a speaking order. A speaking order would mean an order dealing with objections raised by the assessee. In the present case, the Assessing Officer has clearly failed to deal with the objections raised by the petitioner as contemplated in the above decision. 9. Be that as it may, a perusal of the material on record as discussed hereinabove shows that the Assessing Officer, at the time of scrutiny assessment, verified the material on record and called for the explanation of the petitioner on several issues relating to the land in question, Page 14 of 19 C/SCA/12129/2014 JUDGMENT etc. After due verification of the material on record, the Assessing Officer did not deem it fit to make any disallowance as is proposed to be made by reopening the assessment. It is the case of the respondent that the Assessing Officer at the relevant time failed to examine the issue from the angle of land being converted from capital asset to stock-in-trade and accordingly, did not assess the capital gain under section 45(2) of the Act which accrued to the petitioner being the difference between the cost of investment and the fair market value on the date of such conversion. 10. In this regard, it may be germane to refer to the decision of this court in the case of Cliantha Research Limited v. Deputy Commissioner of Income-tax, (supra) wherein the court has held thus:- 18. In addition to such queries with respect to the entire claim, he also raised pointed queries with respect to sample storage income and miscellaneous income for which the petitioner had claimed deduction. 19. In response to such queries, the petitioners had given detailed replies and produced voluminous material to support the claim of deduction. It cannot be stated by any stretch of imagination that such claim of deduction under Section 80IB(8A) of the Act was not examined by the Assessing Officer in the original assessment. It may be that he did not raise specific query to allowability of the claim on the premise that the petitioner was doing scientific research for and on behalf of the companies. However, merely for the failure of the Assessing Officer to raise such a question, in our opinion, would not authorize him to reopen the assessment even within the period of 4 years from the end of the relevant assessment year. Any such attempt on his part would be based on mere change of opinion. To reiterate when a claim was processed at length and after calling for detailed explanation from the assessee, the same was accepted, merely because a Page 15 of 19 C/SCA/12129/2014 JUDGMENT certain element or angle was not in the mind of the Assessing Officer while accepting such a claim, cannot be a ground for issuing notice for reassessment. in the present case, as noticed hereinabove, while examining the claim under section 80IB(10) of the Act, the Assessing Officer has called for necessary details by issuing notice under section 142(2) of the Act which includes details with regard to the land brought in as capital by Babubhai Desai as well as other material. Under the circumstances, it is evident that all the material was there before the Assessing Officer, who after duly considering the same did not deem it fit to assess capital gain under section 45(2) of the Act. Under the circumstances, what the Assessing Officer now seeks to do is to examine the same material from a different angle. As held by this court in Cliantha Research Limited (supra), mere failure on the part of the Assessing Officer to raise a question would not authorise him to reopen the assessment even within a period of four years from the end of the relevant assessment year. Any such attempt on his part would be based on mere change of opinion. When a claim is processed at length after calling for due explanation from the assessee and the same is accepted, merely because a certain element or angle was not in the mind of the Assessing Officer while accepting such a claim, cannot be a ground for issuing notice of reassessment. 11. Insofar as the decision of this court in the case of Gala Gymkhana (P) Limited vs. Assistant Commissioner of Income-Tax (supra) on which reliance has been placed by the learned counsel for the respondent is concerned, in the facts of the said case, there was nothing to show that the Assessing Officer had examined the taxability of the entrance Page 16 of 19 C/SCA/12129/2014 JUDGMENT fees received from the members. The court, accordingly, held that the question of treating such entrance fees as either capital receipt or revenue receipt was not part of such a query and, therefore, angle of taxability of such receipt being a receipt of revenue in nature, could not be stated to be a part of the query raised by the Assessing Officer. The court further held that if the inquiry of the Assessing Officer was not with respect to the question of taxability of such a receipt, his action of not taxing such amount without assigning reasons, could not be seen as an act on his part of having formed an opinion with respect to non-taxability of such an amount. In the facts of the present case, the eligibility of deduction under section 80IB(10) has been duly examined by the Assessing Officer at the time of framing the original assessment. While considering the claim for deduction under section 80IB(10) of the Act, the Assessing Officer has called for details of the land in question which was brought as capital of Shri Babubhai Desai, the amount of land brought as capital and the value considered, the detailed working of profit/gain offered for income-tax when land was brought as capital asset, as well as copy of the return of income with computation of income of Shri Babubhai Desai for financial years 2006-07 and 2007-08. In response thereto, the petitioner has submitted copies of the revenue record pertaining to the lands in question, the purchase deed of the land, copy of the capital account of Shri Babubhai Desai for financial years 2006-07 and 2007-08, supplementary deed and copy of the capital account of Shri Babubhai Desai and his income tax return for the above years which clearly showed that capital gain on such lands amounting to Rs.1,08,60,381/- was offered for tax in assessment year 2007-08. Thus, the Assessing Officer, after Page 17 of 19 C/SCA/12129/2014 JUDGMENT calling for the above material, did not deem it fit to assess capital gain under section 45(2) of the Act nor has the aspect of capital gains been discussed in the assessment order. Therefore, it is evident that while examining the claim under section 80IB(10) of the Act, the Assessing Officer has also called for material relating to the lands in question and as to whether profit/gain was offered for income tax when the land was brought as capital, but has not assessed capital gain under section 45(2) of the Act in relation to conversion of the capital assets to stock in trade, under the circumstances, the reopening of assessment for the purpose of examining such issue is clearly based on a change of opinion. 12. In the light of what is discussed hereinabove, in the opinion of this court, the decision of this court in the case of Cliantha Research Limited v. Deputy Commissioner of Income-tax (supra) would be squarely applicable to the facts of the present case. Moreover, for the reasons stated hereinabove, it is evident that the Assessing officer seeks to reopen the assessment on a mere change of opinion based on the verification of the same set of facts and as such, the assumption of jurisdiction on the part of the Assessing Officer is without any authority of law. The impugned notice under section 148 of the Act, therefore, cannot be sustained. 13. For the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned notice dated 31st March, 2014 issued under section 148 of the Act (Annexure ‘H’ to the petition) is hereby quashed and set aside. Rule is made Page 18 of 19 C/SCA/12129/2014 JUDGMENT absolute accordingly with no order as to costs. (Harsha Devani, J.) ( A.G. Uraizee, J. ) hki Page 19 of 19 "