The ACIT, Gandhidham Circle, GANDHIDHAM V. Kiran Shipping Agencies Pvt. Ltd., GANDHIDHAM

ITA 1002/RJT/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94073 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-05-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 29-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: MJ RANPURA
• Keywords: Reopening of assessment; Depreciation; Business expenditure; Difference of opinion; Assessment record; Block assessment; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 133A; 148; 10; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA NO S . 1 0 02, 1003 & 1004 / RJT /20 1 0 (ASSESSMENT YEAR S : 200 1 - 0 2, 02 - 03 & 03 - 04 ) ASS ISTAN T COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM APPELLANT VS. KIRAN SHIPPING AGENCIES PVT. LTD., PLOT NO.8, SECTOR NO.8, GANDHIDHAM, KUTCH RESPONDENT & C.O. NO S . 19, 20 & 21 / RJT /20 1 1 ( ASSESSMENT YEAR S : 2001 - 02, 02 - 0 3 & 03 - 04 ) KIRAN SHIPPING AGENCIES PVT. LTD., PLOT NO.8, SECTOR NO.8, GANDHIDHAM, KUTCH APPELLANT VS. ASSISTANT COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM RESPONDENT PAN: AAA CK0043K I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 2 / BY REVENUE : SH RI AVINASH KUMAR, D.R. / BY ASSESSEE : SHRI M. J. RANPURA , C.A. / DATE OF HEARING : 2 7 .0 5 .2015 / DATE OF PRONOUNCEMENT : 26 .0 6 .2015 ORDER PER BENCH SINCE, ALL T HESE REVENUES AP PEAL S AND ASSESSEES CROSS OBJECTION S ARE ARISING OUT FROM THE ORDER S OF CIT(A) - II , RAJKOT , DATED 2 5 . 0 2 .20 1 0 FOR ALL THREE YEARS , S O THEY ARE BEING DISPOSED OF BY COMMON ORDER FOR SAKE OF CONVENIENCE. 2. IN ITA NO. 1 0 02 / RJT /20 1 0 FOR A.Y. 2001 - 02 , REVENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUND: A) THE LD. CIT(A) HAS ERRED IN LAW IN TREATING THE REOPENING PROCEEDINGS INITIATED U/S.147 AS BAD IN LAW AND THE ASSESSMENT PASSED U/S.143(3) R.W.S. 147 AS NULL AND VOID. 2. 1 IN C.O. NO. 19 / RJT /20 11 FOR A.Y . 2001 - 02, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUND S : 1.0 THE GROUNDS OF CROSS - OBJECTIONS MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - II, RAJKOT [HEREINAFTER REFERRED TO AS THE CIT (A)] ERRED ON FACTS AS IN LAW IN NOT DECIDING THE GROUND RELATED TO DISALLOWANCE OF CARGO HANDLING CHARGES OF RS.84,46,525/ - . THE LD. CIT(A) MAY KINDLY BE DIRECTED TO DECIDE THE ISSUE ON MERITS. I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 3 3. ASSESSEE , DURING YEAR UNDER CONSIDERATION, WA S ENGAGED IN THE BUSINESS OF CLEARING, FORWARDING AND STORAGE OF LIQUID CARGO. IT FILED ITS RETURN OF INCOME FOR A.Y. 01 - 02 DECLARING A TOTAL INCOME AT RS.35,06,893/ - . SUBSEQUENTLY, AN ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED DETERMINING TOTAL INCOME OF ASSE SSEE AT RS.35,28,140/ - . SUBSEQUENTLY, A SURVEY U/S. 133A OF THE ACT WAS CARRIED OUT ON 04.05.2007 AT THE OFFICE PREMISES OF ASSESSEE AND ITS GROUP CONCERN. DURING COURSE OF SURVEY, THE STATEMENT OF ONE OF THE DIRECTORS, SHRI MAHESH N. GUPTA WAS RECORDED. HE WAS ASKED TO CLARIFY THE NATURE OF PAYMENTS MADE TO ONE M/S. MOIRA STEELS LIMITED (HEREINAFTER CALLED MOIRA STEELS), INDORE, AND ALSO THE BUSINESS EXIGENCY INVOLVED THEREIN. ON THE BASIS OF STATEMENT RECORDED, ASSESSING OFFICER REOPENED THE CASE BY ISSUING A SHOW CAUSE NOTICE U/S. 148 OF THE ACT ON 12.12.2008. THEREAFTER, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, GANDHIDHAM, COMPLETED ASSESSMENT U/S.143(3) R.W.S. 147 OF THE ACT ON 22.12.2008. WHILE DOING SO, HE DISALLOWED A SUM OF RS.84,46,525 / - REPRESENTING CARGO HANDLING CHARGES PAID TO MOIRA STEELS. 3.1 BEING AGGRIEVED WITH THE SAID ORDER OF ASSESSING OFFICER, ASSESSEE PREFERRED AN APPEAL BEFORE FIRST APPELLATE AUTHORITY, WHEREIN AFTER TAKING INTO CONSIDERATION THE SUBMISSION ON BEHALF OF ASSESSEE AND AVERMENTS OF ASSESSING OFFICER ON THE POINT OF VALIDITY OF REOPENING, CIT(A) OBSERVED THAT REASON RECORDED BY ASSESSING OFFICER ON 13.09.2007 BEFORE REOPENING I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 4 THE COMPLETED ASSESSMENT BY ISSUING NOTICE U/S.148 ARE EXTRACTED BELOW: 'A SURVEY UNDER SECTION 1 33 A OF THE I. T. ACT WAS CARRIED OUT AT THE OFFICE PREMISES OF THE ASSESSEE ON 4.5.2007. THIS ASSESSEE IS ASSESSED TO TAX WITH THIS CIRCLE. DURING THE COURSE OF SURVEY PROCEEDINGS, SCANNING OF LEDGER OF 'CARGO HANDLING CHARGES AND EXPENSES' F OR THE ACCOUNTING YEARS, 2000 - 01 TO 2002 - 03 REVEALED THAT THE ASSESSEE COMPANY HAD DEBITED EXPENDITURE TO THE TUNE OF RS.2,37,17,765/ - TO M/S. M OIRA STEEL LT D., I NDORE AS UNDER : - ACCOUNTING YEAR AMOUNT (RS.) 2000 - 01 84,86,525/ - 2001 - 02 49,68,700/ - 2 002 - 03 1,03,02,540/ - TOTAL 2,37,17,765/ - TAKING THE ABOVE F ACTS INTO ACCOUNT, STATEMENT OF SHRI MAHESH N. GUPTA, CHAIRMAN OF THE ASSESSEE COMPANY WAS RECORDED DURING THE COURSE OF SURVEY. IN THE STATEMENT, HE WAS CATEGORICALLY ASKED TO EXPLAIN HOW THE S ERVICES WERE RENDER ED BY M/ S. M OIRA STEEL LT D., INDORE TO THE ASSESSEE COMPANY. HE WAS ALSO ASKED TO FURNISH THE DETAILS SUCH AS THE NAME OF THE PERSONS TO WHOM THE JOB OF RENDERING SERVICES AS WELL AS PLACE WHERE THE SERVICES TO BE RENDERED B Y M/ S. M OIRA STEEL LTD. TO THE ASSESSEE COMPANY. HE WAS ALSO ASKED TO FURNISH NECESSARY DETAILS/EVIDENCES TO JUSTIFY THE SERVICES PROVIDED BY M /S. M OIRA STEEL LTD. H E WAS FURTHER ASKED TO STATE WHETHER ANY AGREEMENT WAS ENTERED INTO WITH M/ S. MOIRA STEEL LTD. AS REGA RDS THE HANDLING CHARGES HE HAD MERELY STATED THAT M / S. MOIRA STEEL LTD ., INDORE HAD CARRIED OUT THE WORK REL ATE D TO CARRYING OUT THE IMPORTED MATERIAL FROM CARGO TO LI QUID STORAGE T ERMINAL THROUGH DIFFERENT AGENCIES. HE ALSO CLAIMED THAT IT DID THE WORK OF SUPERVISION AND LIASONI N G . HE FURTHER CLAIMED THAT THEY HAD INTRODUCED T HE CUSTOMERS AND LOOKED AFTER THE COLLECTION FROM THEM. WITH REGARD TO AL L THESE WORK HE STATED THAT THEY HAD BEEN PAID COMMISSION. AS REGARDS THE DEPUTING OF THE PERSON TO PARTICUL AR PLACE, HE MERELY STATED THAT HE DID NOT REMEMBER ANYTHING ABOUT THIS. HE I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 5 HAD FURTHER ADMITTED THAT THE ASSESSEE COMPANY DID NOT HAVE ANY WRITTEN EVIDENCE TO SUBSTANTIATE THAT THEY HAD CARRIED OUT THE WORK. HE HAD ALSO ADMITTED THAT NO WRITTEN AGREEMENT IN THIS REGARD WAS MADE OR ENTERED INTO. WITH REGARD TO ANY OTHER DOCUMENTARY EVIDENCES IN RELATION TO THE SERVICES RENDERED BY M/ S. MOIRA STEEL LTD. HE INSTEAD OF FURNISHING THE EVIDENCES MERE LY STATED THAT WH ATEVER BILLS RAISED BY M / S. MOIRA STEEL LTD . WERE MISPLACED AS THEY HAD SHIFTED THEIR OFFICE RECENTLY. HE WAS REQUESTED TO FURNISH THE NAME OF THE PARTIES FOR WHOM THE WORK RELATED TO HANDLING, SUPERVISION AND LIASONI N G WAS CARRIED OUT. IN THIS CONTEXT, HE AGAIN STATED THAT AS THE FILE WAS MISPLAC ED, THE DETAILS IN THIS REGARD COULD NOT BE FURNISHED AT THE TIME OF SURVEY. IN VIEW OF THE ABOVE FACTS EMERGING FROM THE STATEMENT GIVEN BY SHRI MAHESH N. GUPTA AND THE OUTCOME OF SURVEY PROCEEDINGS, IT IS APPARENT THAT THE ASSESSEE COMPANY IS NOT HAVI NG ANY MATERIAL EVIDENCE TO SUGGEST THAT M/S. M OIRA STEEL LTD . HAD ACTUALLY RENDERED THE SERVICES AGAINST EXPENDITURE/PAYMENTS CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE. IT IS A SETTLED LOW THAT THE ONUS HEAVILY LIES UPON THE ASSESSEE TO ESTABLISH THAT A PARTICULAR EXPENDITURE IS EXCLUSIVELY INCURRED FOR THE BUSINESS PURPOSE. HOWEVER, AS MENTIONED THE ASSESSEE COMPANY IS NOT IN POSSESSION OF MATERIAL EVIDENCE TO JUSTIFY ITS CLAIM OF EXPENDITURE. THIS HAS LED TO ESTABLISH THAT THE ASSESSEE COMPANY HAD DEBIT ED BOGUS EXPENDITURE TO THE EXTENT OF R S .2.37 CRORES AS NO DOCUMENTARY EVIDENCES WERE AVAILABLE/FOUND WITH THE ASSESSEE COMPANY. DURING THE YEAR UNDER REFERENCE THE ASSESSEE HAD DEBITED BOGUS EXPENDITURE OF RS.84,46, 525 / - AND UNDERSTATED ITS INCOME. IN V IEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THAT THE ASSESSEE HAS DEBITED BOGUS EXPENDITURE OF RS. 8 4,46,525 / - WHICH HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. IN VIEW OF THE ABOVE FACTS, I HAVE REASON TO BELIEVE THAT INC OME CHAR GEABLE TO TAX HAS BEEN ESCAPED FROM THE I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 6 ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE INCOME TAX ACT. 3.2 ASSESSEE CHALLENGED THE ASSESSING OFFICERS ACTION OF REOPENING PROCEEDING ON THE GROUND THAT DURING COURSE OF REGULAR ASSESSMENT PROCEEDING, ASSESSEE MADE TRUE AND FULL DISCLOSURES OF ITS INCOME AND EXPENDITURE, AND HENCE, THERE WAS NO REASON TO BELIEVE THAT THE INCOME ESCAPED ASSESSMENT. ALLEGED ESCAPED INCOME IN QUESTION WAS REGARDING PAYMENTS MADE TO MOIRA STEELS, TREATING THE SAME AS NON B USINESS EXPENDITURE ON THE GROUND THAT ASSESSEE FAILED TO ESTABLISH THE NATURE OF SERVICE RENDERED BY SAID CONCERN. IN THIS REGARD, STAND OF ASSESSEE HAS BEEN THAT DETAILS WERE ALREADY ON RECORD AND ASSESSMENT IN THE CASE OF ASSESSEE WAS COMPLETED U/S.158 BC AS WELL AS U/S.143(3) FOR THE YEAR UNDER CONSIDERATION. THUS, ENTIRE RECORDS WERE ALREADY IN THE POSSESSION OF DEPARTMENT. THERE WAS NO INFORMATION AVAILABLE WITH ASSESSING OFFICER IN ORDER TO FORM A BELIEF THAT INCOME ESCAPED ASSESSMENT. LEGAL STAND OF ASSESSEE HAS BEEN THAT SCOPE OF SECTION 147 DOES NOT CONFER JURISDICTION TO REOPEN A CLOSED PROCEEDING ON A MERE SUSPICION THAT ASSESSEE DID NOT FURNISH FULL AND TRUE PARTICULARS OF INCOME. REOPENING PROCEEDINGS WERE CONTENDED TO BE BAD IN LAW BECAUSE SAME WERE BEYOND TIME LIMIT PRESCRIBED. PROVISO TO SECTION 147 STIPULATES THAT WHERE AN ASSESSMENT UNDER SUB - SECTION (3) OF SECTION 143 WAS MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION WOULD BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS F ROM THE END OF RELEVANT ASSESSMENT YEAR, UNLESS I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 7 ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT BY REASON OF FAILURE ON THE PART OF ASSESSEE TO MAKE A RETURN U/S.139 OR IN RESPONSE TO NOTICE ISSUED U/S.142(1), OR SECTION 148 TO DISC LOSE FULL AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. 3.3 LEARNED AUTHORIZED REPRESENTATIVE BEFORE CIT(A) STATED THAT ASSESSMENTS FOR A.YS. 2001 - 02, 2002 - 03 AND 2003 - 04 WERE REOPENED ON THE BASIS OF MERE SUSPICION R AISED DURING COURSE OF SURVEY PROCEEDINGS WHICH TOOK PLACE ON 04.05.2007 I.E. A.Y. 2008 - 09. ASSESSING OFFICER ON THE BASIS OF THIS SUSPICION, MERELY EXTRAPOLATED THE FACTS IN EARLIER YEARS. DURING COURSE OF SURVEY , DIRECTOR OF ASSESSE COMPANY FAILED TO P ROVIDE QUANTITATIVE DETAILS OF PAYMENTS, AS SAME WERE NOT IN HIS MEMORY AND AS HE WAS HONOURED FOR AGREEMENT THAT TOOK PLACE FIVE YEARS AGO. ACCORDING TO LEARNED AUTHORIZED REPRESENTATIVE BEFORE CIT(A), THE ONLY REASON/ BELIEF/ SUSPICION RAISED BY ASSESSI NG OFFICER WAS ON THE BASIS OF EXTRAPOLATION OF EVENTS WHICH COULD NOT BE A GROUND FOR REOPENING OF ASSESSMENT. 3.4 IN CASE, THERE IS NO FAILURE ON PART OF ASSESSE TO MAKE A RETURN OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT IMPUGNED NOTICES BEING ISSUED AFTER FOUR YEARS WERE TO BE TREATED AS BARRED BY LIMITATION. THE COMMUNICATION BY ASSESSING OFFICER THAT REASON FOR REOPENING ASSESSMENT NOW WHERE STATED THAT ASSESSE FAILED TO DISCLOSE FULLY AND TRULY ALL I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 8 MATERIAL FACTS N ECESSARY FOR ASSESSMENT RELEVANT ASSESSMENT YEAR. ASSESSMENT UNDER A WRONG HEAD COULD NOT JUSTIFY REOPENING OF ASSESSMENT BEYOND THE PRESCRIBED PERIOD OF FOUR YEARS WHEN NONE OF THE CONDITIONS MENTIONED IN PROVISO TO SECTION 147 EXISTED. ASSESSEE ALSO REL IED ON THE DECISION OF HONBLE HIGH COURT IN CASE OF HARYANA ACRYLIC MANUFACTURING CO. VS. CIT REPORTED IN 308 ITR 38, WHEREIN HONBLE HIGH COURT HAS HELD AS UNDER: 'ONCE THE EXC EPTIO N C A RVED OUT BY PROVISO 10 SECTION 147 COMES INTO PLAY, THE CASE WOULD FALL OUTSIDE THE A MBIT OF SECTION 147. AS PER PROVISO TO SECTION 147, NO A CTION UNDER THIS SECTION CAN BE TAKEN AFTER EXPIRY OF FOUR YE A RS FROM THE END OF THE RELEVANT A SSESSMENT YEAR, UNLESS INTE R ALIA, INCOME CHA RGE A BLE TO TAX H A D ESC APED A SSESSMENT BY R EASON OF FAILURE OF T HE ASSESSE T O M A KE FULL AND TRUE DISCLOSURE OF ALL MATERIAL F ACT S N ECESS ARY FOR A SSESS M E NT . THERE BEIN G NO WHISPE R IN THE RE A SONS SUPPLIED TO ASSESSEE THAT INCOME ESCA PED ASSESSMENT BY REASON OF ASSESSEE'S F A ILURE TO MAKE A FULL A ND TR UE DISCLOSURE OF ALL MATERIALS FACTS NE CESS ARY FOR ASSESSMENT, NOTICE U/S. 148 ISSUED BEYOND FOUR YEA RS FROM THE END OF RELEV ANT A SSESSMEN T YEA R WAS BARRED BY LI M I TA TION UNDER PROVISO TO SECTION 147, HENCE WITHOUT JURISDICTION. ' 3.5 IN ABOVE BACKGROUND, LEARNED AUTHORIZED REPRESENTATIVE OF ASSESSE CHALLENGED THE REOPENING AND CONTENDED THAT REOPENING PROCEEDINGS WERE BARRED BY LIMITATION. IN THIS BACKGROUND, CIT(A) ALLOWED THE APPEAL OF ASSESSE. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE INTE R ALIA SUBMITTED THAT CIT(A) ERRED IN LAW IN TREATING REOPENING PROCEEDINGS INITIATED U/S.147 AS BAD IN LAW AND ASSESSMENT PASSED U/S. 143(3) R.W.S. 147 AS NULL AND VOID. ACCORDINGLY, I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 9 ORDER OF CIT(A) SHOULD BE SET ASIDE AND THAT OF ASSESSING OFFICER ON T HE ISSUE BE UPHELD. ON OTHER HAND, LEARNED AUTHORIZED REPRESENTATIVE S UPPORTED THE ORDER OF CIT(A). 3. 6 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT ASSESSING OFFICER FORMED A BELIEF THAT ASSESSE DID NOT FURNISH TRUE AND FULL PARTICULARS OF INCOME, ON THE BASIS OF SURVEY. FIRST APPELLATE AUTHORITY OBSERVED THAT THIS SURVEY DID NOT YIELD ANY INCRIMINATING MATERIALS, OR INFORMATION INDICATING THEREIN THAT PAYMENTS MADE BY ASSESSE TO MOIRA STEELS WERE BOGUS. THEREFORE, THER E WAS NO MATERIAL IN POSSESSION OF ASSESSING OFFICER TO FORM A BELIEF THAT ALLEGED EXAGGERATION / EXISTENCE OF EXPENDITURE LED TO ESCAPEMENT OF INCOME. HE ALSO OBSERVED THAT ASSESSE WAS SUBJECT MATTER OF SEARCH BY DEPARTMENT IN YEAR 2002 AND THAT ASSESSME NT OF ASSESSE WAS COMPLETED BY VIRTUE OF BLOCK ASSESSMENT PROCEEDINGS U/S. 158BC. IN THE SAID PROCEEDINGS NOTHING INCRIMINATING REGARDING THIS PAYMENT WAS NOTICED EITHER IN SEIZED MATERIAL OR IN ASSESSMENT RECORDS. THEREFORE, IT COULD NOT BE SAID T HAT SU RVEY YIELDED INFORMATION WHICH LED TO BELIEVE THAT ASSESSE DID NOT FURNISH FULL AND TRUE PARTICULARS OF INCOME. 3.6.1 AS STATED ABOVE, SURVEY TOOK PLACE ON 04.05.2007 WHICH FELL IN FINANCIAL YEAR 2007 - 08. THE ASSESSMENT YEAR UNDER CONSIDERATION IS A.Y. 2001 - 02 I.E., F.Y. 2000 - 01. DURING COURSE OF SURVEY, THE AUTHORIZED OFFICERS RAISED QUESTION BEFORE I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 10 THE DIRECTOR OF ASSESSE COMPANY TO EXPLAIN THE PURPOSE OF PAYMENTS MADE TO MOIRA STEEL. AFTER EXPLAINING THE SAME, HE WAS FURTHER ASKED TO FURNISH QUANTIT ATIVE DETAILS OF PAYMENTS, WHICH DIRECTOR FAILED TO COMPLY. ON THIS BASIS, ASSESSING OFFICER FORMED BELIEF THAT PAYMENTS WERE NOT ALLOWABLE AS ASSESSEES BUSINESS. IT IS PERTINENT TO NOTE THAT DIRECTOR WAS ASKED TO COMMENT UPON AN EVENT WHICH TOOK PLACE FIVE YEARS BACK. MERELY BECAUSE DIRECTOR OF ASSESSEE FAILED TO FURNISH QUANTITATIVE DETAILS OF SAID PAYMENT. IT COULD NOT BE SAID THAT ASSESSE COMPANY DID NOT FURNISH FULL AND TRUE PARTICULARS OF ITS INCOME. HON'BLE G UJARAT HIGH COURT IN CASE OF INDUCTO I SPAT ALLOYS LTD (23 DTR 286) HAS HELD THAT, UNDER THE PROVISO TO SECTION 147 A COMPLETED ASSESSMENT COULD BE DISTURBED FOR THE PURPOSES OF REASSESSMENT, ONLY IF ASSESSE COMMITTED ANY OF THE DEFAULTS MENTIONED THEREIN. WHETHER THE LEASE RENT WAS WRONGLY CLA IMED OR NOT WAS AN ISSUE ON WHICH ASSESSING OFFICER APPLIED HIS MIND AT THE TIME OF FRAMING ORIGINAL ASSESSMENT BY CALLING FOR NECESSARY INFORMATION AND AFTER CONSIDERING THE EXPLANATION, ACCEPTED THE STAND OF ASSESSE THAT LEASE RENT WAS ALLOWABLE AS BUSIN ESS EXPENDITURE. HON'BLE GUJARAT HIGH COURT FURTHER HELD THAT, IMPUGNED NOTICE UNDER SECTION 148 WAS ISSUED BEYOND THE STATUTORY PERIOD OF FOUR YEARS AS PROVIDED IN SECTION 147 OF THE ACT AND HENCE UNDER THE PROVISO THERETO THE BURDEN WAS ON THE REVENUE TO ESTABLISH THAT THE PETITIONER EITHER FAILED TO FURNISH RETURN OF INCOME, OR COMPLIED WITH THE STATUTORY NOTICE REFERRED IN THE PROVISIONS, OR FAILED TO DISCLOSE 'FULLY AND TRULY' ALL MATERIAL FACTS RELEVANT FOR I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 11 THE ASSESSMENT OF THE ASSESSMENT YEAR IN QUE STION. IN THIS BACKGROUND, CIT(A) OBSERVED THAT: (A) TO REOPEN A PROCEEDING BEYOND THE PERIOD OF FOUR YEARS, ASSESSING OFFICER MUST HAVE SUFFICIENT REASON TO BELIEVE THAT AN ASSESSES DID NOT FURNISH FULL AND TRUE PARTICULARS OF ITS INCOME, WHICH IN THE INSTANT CASE, IS NOT SO AND THAT (B) THE ONUS WA S UPON REVENUE TO SUBSTANTIATE ITS CLAIM THAT ITS INCOME OF ASSESSE ESCAPED ASSESSMENT. HAVING OBSERVED SO, SECOND ISSUE BECOMES RELEVANT, VIZ., WHETHER THE SAID EXPENDITURE WAS AN ALLOWABLE BUSINESS EXPEND ITURE OR NOT. ASSESSING OFFICER FAILED TO ADDRESS THESE TWO PRIMARY REQUIREMENTS FOR REOPENING AN ASSESSMENT BEYOND THE PE RIOD OF FOUR YEARS. ASSESSEE DID NOT WITHHOLD THE CLAIM OF EXPENDITURE AND EXPENDITURE WAS NOT MET FROM ANY UNEXPLAINED SOURCES. HEN CE, IT COULD NOT BE SAID THAT ASSESSE DID NOT FURNISH FULL AND TRUE PARTICULARS OF ITS INCOME. MOREOVER, ON GOING THROUGH THE CASE RECORDS, WHICH WERE CALLED FROM THE ASSESSING OFFICER AT RELEVANT POINT OF TIME , IT WAS FOUND BY CIT(A) THAT ASSESSING OFFIC ER ACCEPTED THE BOOK RESULTS DUE TO HIGHER GROSS PROFIT FROM YEAR TO YEAR. NOW, WHAT CONSTITUTES FAILURE ON THE PART OF ASSESSE TO MAKE FULL AND TRUE DISCLOSURE ? IN SUCH SITUATION, HONBLE DELHI HIGH COURT IN CASE OF HARYANA ACRYLIC MANUFACTURING CO . V S . CIT (308 ITR 38) OBSERVED AS UNDER: EXAMINING THE PROVISO TO SECTION 147, ONE FINDS THAT NO ADDITION CAN BE TAKEN UNDER SECTION 147 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IF I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 12 THE FOLLOWING CONDITIONS ARE SATISFIED : (A) AN ASSESSMENT UNDER SECTION 143(3) OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR; AND (B) UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSES : (I) TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB - SECTION (1) OF SECTION 142 OR SECTION 148: OR (II) TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. CONDITION (A) IS ADMITTE DLY SATISFIED IN AS MUCH AS THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3). CONDITION (B) DEALS WITH A SPECIAL KIND OF ESCAPEMENT OF INCOME, CHARGEABLE TO TAX. THE ESCAPEMENT MUST ARISE OUT OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A R ETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB SECTION (1) OF SECTION 142 OR 148. THIS IS CLEARLY NOT THE CASE HERE BECAUSE THE PETITIONER DID FILE THE RETURN. SINCE THERE, WAS NO FAILURE TO MAKE THE RETURN, THE ESCAPEMENT OF INCOME CA NNOT BE ATTRIBUTED TO SUCH FAILURE. THIS LEAVES ONE WITH THE ESCAPEMENT OF INCOME CHARGEABLE TO TAX WHICH ARISES OUT OF THE FAILURE ON THE PART OF THE ASSESSES TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. IF IT IS ALSO FOUND THAT THE PETITIONER HAD DISCLOSED MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT, THEN NO ACTION UNDER SECTION 147 COULD HAVE BEEN TAKEN AFTER THE FOUR YEAR PERIOD INDICATED ABOVE. SO THE KEY QUESTION IS WHETHER OR NOT THE PETITIO NER HAD MADE FULL AND TRUE DISC LOSURE OF ALL MATERIAL FACTS. REOPENING AFTER FOUR YEARS WAS BAD IN LAW AND NOT PERMISSIBLE UNDER THE INCOME TAX ACT, 1961, THAT TOO WHEN ALL THE FACTS RELATING TO ISSUE ON RECORD OF ASSESSING OFFICER AT THE TIME OF ORIGINA L ASSESSMENT. PROVISIONS OF SECTION 147 DID NOT CONFER JURISDICTION ON CHANGE OF OPINION ON INTERPRETATION OF A PARTICULAR PROVISION EARLIER ADOPTED BY ASSESSING OFFICER. AFTER I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 13 EXPIRY OF FOUR YEARS OF ASSESSMENT COMPLETED U/S. 143(3) COULD NOT BE REOPEN ED UNLESS THERE WAS OMISSION OR FAILURE ON THE PART OF ASSESSE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. HON'BLE HIGH COURT OF GUJARAT IN CASE OF SHETH BROTHERS VS. JCIT (2001) 251 ITR 270 ( G UJ) OBSERVED AS UNDER : 'AS THE ASSESSMENT WAS SOUGHT TO BE REOPENED AFTER A PERIOD OF FOUR YEARS AND THERE WAS ADMITTEDLY NO OMISSION OR FAILURE ON THE PART OF THE PETITIONER, THE ASSESSING OFFICER, I.E. THE RESPONDENT, COULD NOT ASSUME JURISDICTION UNDER SECTION 147 . THE ACT PROVIDES F OR THE MACHINERY IN CHAPTER XIV UNDER SECTION 147 TO 153 FOR THE ASSESSMENT OF ESCAPED INCOME IN CERTAIN CIRCUMSTANCES. THE FUNDAMENTALS UNDERLYING THESE PROVISIONS OF THE ACT IS TO SEE THAT THE ENTIRE INCOME OF AN ASSESSEE ASSEMBLE IN RESPECT OF A PARTICU LAR ASSESSMENT YEAR IS SUBJECTED TO THE SINGLE ASSESSMENT FOR THAT PARTICULAR YEAR FOR INCOME WHICH IS ASSESSABLE IN ONE ASSESSMENT YEAR CANNOT BE BROUGHT TO TAX IN ANOTHER ASSESSMENT YEAR FOR ANY REASON. THE ACT DOES NOT CONTEMPLATE PIECEMEAL ASSESSMENT; ONE ASSESSMENT IN RELATION TO A PORTION OF THE INCOME, AND ANOTHER IN RESPECT OF ANOTHER PORTION.' REOPENING OF ASSESSMENT WAS, THUS MERELY A FRESH APPLICATION OF MIND BY THE ASSESSING OFFICER TO THE SAME SET OF FACTS. IN SUCH CIRCUMSTANCES, NO NOTICE UN DER SECTION 148 COULD HAVE BEEN ISSUED. HON'BLE ALLAHABAD HIGH COURT, IN THE JUDGMENT IN THE CASE OF FORAMER VS. CIT(A) OBSERVED THAT THE NOTICE UNDER SECTION 147/148 ON THE BASIS OF MERE CHANGE OF OPINION BY THE INCOME TAX AUTHORITIES WAS NOT VALID AS HEL D BY THE SUPREME COURT IN INDIAN AND EASTERN NEWSPAPER SOCIETY VS. CIT (1979) 12 CTR (SC) 190; (1979) 119 ITR 996 (SC); GEMINI LEATHER STORES VS. ITO & ORS. 1975 CTR (SC) 1127; (1975) 100 ITR 1 (SC) AND JINDAL PHOTO FILMS LTD. VS. BY.CIT (1999) 154 CTR (DE L) 355; (1998) 234 ITR 17O (DEL) AND HAD HELD THAT THE LAW THAT AN ASSESSMENT COULD NOT BE REOPENED ON A CHANGE OF OPINION I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 14 WAS THE SAME BEFORE AND AFTER AMENDMENT BY DIRECT TAX LAWS (AMENDMENT) ACT, 1987' 3. 6.2 WE FIND THAT HONBLE BOMBAY HIGH COURT IN CA SE OF IDEA CELLULAR LTD VS DCIT REPORTED IN 301 ITR 407, HAS HELD AS UNDER: THERE WAS NO FAILURE ON THE PART OF THE PETITIONER TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT OF THE RELEVANT ASSESSMENT YEAR. ACCOUNTING ENTRY FOR A MALGAMATION RESERVE WAS MENTIONED IN THE RETURN OF THE RELEVANT YEAR. AO RAISED SPECIFIC QUERIES CONCERNING THIS ENTRY ON SEVERAL OCCASIONS AND ALL THE QUERIES WERE ANSWERED. THUS, ALL MATERIALS WERE PLACED BEFORE THE AO AND THERE WAS NO SUPPRESSION OF ANY MATERIAL. THEREFORE, CONDITION PRECEDENT UNDER PROVISO TO SECTION 147 FOR REOPENING THE ASSESSMENT AFTER EXPIRY OF PERIOD OF FOUR YEARS IS NOT SATISFIED, THIS IS NOT A CASE, WHICH ATTRACTS EXPLANATION 1 TO SECTION 147. FURTHER, ONCE ALL THE MATERIAL WAS BEFORE THE AO AND HE CHOSE NOT TO DEAL WITH THE CONTENTIONS RAISED BY THE PETITIONER WHILE PASSING THE ASSESSMENT ORDER, IT CANNOT BE SAID THAT HE HAD NOT APPLIED HIS MIND TO THE RELEVANT ISSUES. THEREFORE REOPENING OF WAS NOT VALID.' THE PROVISIONS WITH REGARDS TO REOPENING OF ASSESSMENT ARE CLEAR AND NOT AMBIGUOUS. THE FIRST PROVISO TO SECTION 147 READS AS UNDER : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO AC TION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB - SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 15 IT IS VERY EVIDENT FROM THE PLAIN READING OF THE ABOVE PROVISION THAT REOPENING CAN BE MADE AFTER COMPLETION OF 4 YEARS WHEN ASSESSMENT IS COMPLETED U /S. 143(3), ONLY WHEN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BECAUSE OF FAILURE OF ASSESSEE TO FILE RETURN UNDER SECTION 139, OR IN RESPONSE TO NOTICE ISSUED UNDER SECTION 142(1) OR 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. IN CASE BEFORE US , ASSESSEE FILED I TS RETURN U/ S . 139 AN D THERE WAS FULL DISCLOSURE OF MATERIAL FACTS NECESSARY FOR HIS A SSESSMENT. EVEN THE CONFIRMATION FROM THE DEPOSITORS WERE FILED ALONG WITH RETURN OF INCOME AND THE SCRUTINY ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 25/3/2004 AS STATED ABOVE . W HILE F INALIZING ASSESSMENTS FOR A . YS . 2001 - 02 TO 2003 - 04, ASSESSING O FFICER HAS UNDERT A K EN FOLLOWING INVESTIGATION. A.Y. 2001 - 02 THE A.O. ISSUED SCRUTINY NOTICE FOR A. Y . 2001 - 02 ALONG WITH A QUESTIONNAIRE DATED 30.04.2002 ASKING THEREIN THE DETAILS OF EXPENSES AND THE CREDITORS, INCLUDING THE DETAILS OF EXPENSES PAID ON ACCOUNT OF HANDLING CHARGES. AGAIN THE AO ISSUED NOTICE U/S. 142(1) OF THE ACT TO PRODUCE THE DETAILS. IN RESPONSE TO THE ABOVE, THE APPELLANT FURNISHED DETAILS AS DESIRED BY THE AO AN D PRECISELY, VIDE PARA 6.0 OF HIS REPLY FURNISHED THE DETAILS OF MONTH - WISE STORAGE AND HANDLING CHARGES. AGAIN, DURING PERSONAL HEARING ON 10.12.2003, THE AO DIRECTED THE APPELLANT TO FURNISH FURTHER DETAILS OF STORAGE AND HANDLING CHARGES AND CONFIRMATIONS OF CREDITORS, WHICH INCLUDED THE ACCOUNT OF MOIRA STEE LS LTD. I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 16 THE APPELLANT FURNISHED THE ABOVE DETAILS ON 10.1.2004. A.Y. 2002 - 03 THE AO ISSUED A NOTICE U/S. 142(1) ON 10.05.2004, BY WHICH, UNDER QUESTION NO. 30, THE A.O. SOUGHT DETAILS OF PAYMENTS M A DE TOWARDS TRANSPORTATION AND STORAGE TERMINAL CHARGES. IN RESPONSE TO THIS, THE APPELLANT SUBMITTED DETAILS VIDE LETTER DATED 8.6.2004. THE AO THEN ISSUED A GENERAL LETTER AND A NOTICE U/S. 142(1) CALLING FOR FURTHER DETAILS, WHICH WERE SUPPLIED BY THE APPELLANT VIDE LETT ER DATED 20.1. 2005, INTER ALIA, CONTA INING THEREIN THE DETAILS OF PAYMENTS ALONG WITH COPY OF ACCOUNTS. THEREAFTER, THE A.O., BY A LETTER DATED 27.1.2005, SPECIFICALLY CALLED FOR CONFIRMATIONS FROM VARIOUS PARTIES TO WHOM THE APPELLANT MADE PAYMENTS, INCLUDING THE NAME OF MOIRA STEELS (WHICH APPEARED AT SR. NO. 6). IN RESPONSE TO THE SAME, THE APPELLANT BY A FORWARDING LETTER DATED 17.2.2005 FURNISHED THE DETAILS SO CALLED FOR AND THE SAME WAS VERIFIED AND ACCEPTED AND NO ADVERSE, INFERENCE WAS DRAWN IN T HE ASSESSMENT ORDER. A.Y. 2003 - 04 T HE AO ISSUED A SCRUTINY NOTICE FOR AY 2003 - 04 VIDE LETTER DATED 06. 04.2005 ASKING THEREIN THE DETAILS OF EXPENSES AND THE CREDITORS, WHICH INCLUDED THE DETAILS OF EXPANSES PAID ON ACCOUNT OF HANDLING CHARGES. AGAIN, THE AO, ON 27.02.2006, ASKED THE APPELL ANT TO FURNISH DETAILS OF HANDLING CHARGES AND ADDRESSES OF CREDITORS AND CONFIRMATIONS THEREOF. THE APPELLANT, VIDE, REPLY DTD.09.03.2006 FURNISHED THE REQUISITE DETAILS WHICH INCLUDED THE DETAILS OF EXPENSES, LEDGER ACCOUNTS AND CONFIRMATION OF MOIRA ST EEL LIMITED. I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 17 3. 6.3 THIS MATTER WAS THOROUGHLY SCRUTINIZED IN ALL THESE YEARS AND THE ISSUE REGARDING PAYMENTS MADE TO MOIRA STEELS WAS ALREADY CONSIDERED. ON MERIT, THERE SEEMS TO BE NO DOUBT IN THE MIND OF CONCERNED ASSESSING OFFICER REGARDING THIS PA YMENT AS A NON - BUSINESS EXPENDITURE DURING THE ORIGINAL PROCEEDINGS . IN THIS BACKGROUND, CIT(A) WAS JUSTIFIED IN HOLDING THAT THERE WA S NOTHING EVIDENT THAT COULD FORM A BELIEF THAT ASSESSE DID NOT SHOW FULL AND TRUE DISCLOSURES ABOUT THE PARTICULARS OF I TS INCOME. THE PROVISO TO SECTION 147 PROVIDED THAT AN ASSESSMENT, WHICH WA S COMPLETED UNDER SECTION 143(3) OR 147, I.E. A SCRUTINY ASSESSMENT, COULD BE REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR, ONLY IF INCOME ESCAPED A SSESSMENT DUE TO THE FAILURE ON THE PART OF ASSESSEE TO FILE A RETURN OF INCOME, OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. I T WAS ONLY WHEN THE CASE FELL UNDER THE PROVISO TO SECTION 147 THAT THE QUESTION OF NON - DISCLOSURE OF MATERIAL FACTS WOULD BECOME RELEVANT. IN SUCH CASES IF THE ASSESSEE MADE FULL DISCLOSURE OF MATERIAL FACTS, THEN EVEN IF SUCH INCOME ESCAPED ASSESSMENT, NO ACTION COULD BE INITIATED BY THE ASSESSING OFFICER UNDER SECTION 147. IN VIEW OF ABOVE, CIT(A) R IGHTLY CONCLUDED THAT REOPENING PROCEEDINGS INITIATED U/S. 147 ARE BAD IN LAW, AND ACCORDINGLY, ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE ACT WAS RIGHTLY HELD NULL AND VOID. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UP HOLD THE SAME. I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 18 3 . 6.4 IN VIEW OF OUR DECISION IN REVENUES APPEAL, C.O. NO. 19/RJT/2011 FOR A.Y. 2001 - 02 FILED BY ASSESSEE GO ES ACADEMIC. HOWEVER, ASSESSEE IS AT LIBERTY TO RAISE THE SAME AS AND WHEN SITUATION ARISES FOR SAME. HAVING OBSERVED SO, WE DISM ISS THE CROSS OBJECTION . 4 . IN ITA NO. 1003 / RJT /20 10 FOR A.Y. 2002 - 03, REVENUE HAS RAISED SIMILAR ISSUE IN A.Y. 2001 - 02. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS ANNULLED THE AS SESSMENT ORDER . S AME IS UPHELD. 4 . 1 IN VIEW OF OUR DECISION IN REVENUES APPEAL, C.O. NO. 20/RJT/2011 FOR A.Y. 2002 - 03 FILED BY ASSESSEE GOES ACADEMIC. SO, SAME IS DISMISSED AS DISCUSSED ABOVE . 5 . IN ITA NO. 1004/RJT/2010 FOR A.Y. 2003 - 04, REVENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUND: A) THE LD. CIT(A) HAS TREATED THE REOPENING PROCEEDINGS INITIATED U/S. 147 AS BAD IN LAW AND HAS HELD THE ASSESSMENT PASSED U/S.143(3) R.W.S. 147 AS NULL AND VOID. 5 . 1 AS STATED ABOVE, ASSESSEE IS ENGAGED IN BU SINESS OF CLEARING, FORWARDING AND STORAGE OF LIQUID CARGO. IT FILED ITS RETURN OF INCOME FOR A.Y. 03 - 04 ON 01.12.2003 DECLARING A TOTAL INCOME AT RS.52,74,990/ - . SUBSEQUENTLY, AN ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 29.03.2006, DETERMINING TOTAL INCOME OF ASSESSEE AT RS.53,60,527/ - . AS I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 19 STATED ABOVE, SURVEY U/S. 133A OF THE ACT WAS CARRIED OUT ON 04.05.2007 AT THE OFFICE PREMISES OF ASSESSEE AND ITS GROUP CONCERN. DURING COURSE OF SURVEY, THE STATEMENT OF ONE OF THE DIRECTORS, SHRI MAHESH N . GUPTA WAS RECORDED. HE WAS ASKED TO CLARIFY THE NATURE OF PAYMENTS MADE TO ONE M/S. MOIRA STEELS LIMITED, INDORE, AND ALSO THE BUSINESS EXIGENCY INVOLVED THEREIN. ON THE BASIS OF STATEMENT RECORDED, ASSESSING OFFICER REOPENED THE CASE BY ISSUING A SHOW CAUSE NOTICE U/S. 148 OF THE ACT ON 12.12.2008. THEREAFTER, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, GANDHIDHAM, COMPLETED ASSESSMENT U/S.143(3) R.W.S. 147 OF THE ACT ON 22.12.2008. WHILE DOING SO, HE DISALLOWED A SUM OF RS. 1,03,02, 5 40 / - REPRESENTI NG CARGO HANDLING CHARGES PAID TO MOIRA STEELS. 5 .2 BEING AGGRIEVED WITH THE SAID ORDER , ASSESSEE PREFERRED AN APPEAL BEFORE FIRST APPELLATE AUTHORITY, WHEREIN ON THE POINT OF FINALITY OF ASSESSMENT, CIT(A) OBSERVED AS UNDER: VALIDITY OF REOPENING : (A ) THE RE ASONS RECORDED BY THE A.O. ON 24/10/2007 BEFORE REOPENING THE COMPLETED ASSESSMENT BY ISSUING NOTICE U/S. 148 ARC EXTRACTED BELOW : 'A SURVEY UNDER SECTION 133A OF THE I. T. ACT WAS CARRIED OUT AT THE OFFICE PREMISES OF THE ASSESSEE O N 4.5.2007. THIS ASSESSEE IS ASSESSED TO TAX WITH THIS CIRCLE. DURING THE COURSE OF SURVEY PROCEEDINGS, SCANNING OF LEDGER OF 'CARGO HANDLING CHARGES AND EXPENSES' FOR THE ACCOUNTING YEARS, 2000 - 01 TO 2002 - 03 REVEALED THAT THE ASSESSED COMPANY HAD DEBITED EXPENDITURE TO THE TUNE OF RS.2,37,17,765/ - TO M/S. MOIRA STEEL LTD., INDORE AS UNDER : - I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 20 ACCOUNTING YEAR AMOUNT (RS.) 2000 - 01 84,46,525/ - 2001 - 02 49,68,700/ - 2002 - 03 1,03,02,540/ - TOTAL 2,37,17,765/ - TAKING THE ABOVE FACTS INTO ACCO UNT, STATEMENT OF SHRI MAHESH N. GUPTA, CHAIRMAN OF THE ASSESSEE COMPANY WAS RECORDED DURING THE COURSE OF SURVEY. IN THE STATEMENT, HE WAS CATEGORICALLY ASKED TO EXPLAIN HOW THE SERVICES WERE RENDERED BY M/S. MOIRA STEEL LTD., INDORE TO THE ASSESSEE COMP ANY. HE WAS ALSO ASKED TO FURNISH THE DETAILS SUCH AS THE NAME OF THE PERSONS TO WHOM THE JOB OF RENDERING SERVICES ON WALL AS PLACE WHERE THE SERVICES TO BE RENDERED BY M/S. MOIRA STEEL LTD. TO THE ASSESSEE COMPANY. HE WAS ALSO ASKED TO FURNISH NECESSA RY DETAILS / EVIDENCES TO JUSTIFY THE SERVICES PROVIDED BY M/S. MOIRA STEEL LTD. HE WAS FURTHER ASKED TO STATE WHETHER ANY AGREEMENT WAS ENTERED INTO WITH M/S. MOIRA STEEL LTD., INDORE HAD CARRIED OUT THE WORK RELATED TO CARRYING OUT THE IMPORTED MATERIAL FROM CARGO TO LIQUID STORAGE TERMINAL THROUGH DIFFERENT AGENCIES. HE ALSO CLAIMED THAT IT DID THE WORK OF SUPERVISION AND LIASONING. HE FURTHER CLAIMED THAT THEY HAD INTRODUCED THE CUSTOMERS AND LOOKED AFTER THE COLLECTION FROM THEM. WITH REGARD TO OFF TH ESE WORK HE STATED THAT THEY HAD BEEN PAID COMMISSION. AS REGARDS THE DEPUTING OF THE PERSON TO PARTICULAR PLACE, HE MERELY STATED THAT HE DID NOT REMEMBER ANYTHING ABOUT THIS. HE HAD FURTHER ADMITTED THAT, THE ASSESSEE COMPANY DID NOT HAVE ANY WRITTEN EVI DENCE TO SUBSTANTIATE THAT THEY HAD CARRIED OUT THE WORK. HE HAD ALSO ADMITTED THAT NO WRITTEN AGREEMENT IN THIS REGARD WAS MADE OR ENTERED INT O. WITH REGARD TO ANY OTHER DOCUMENTARY EVIDENCES IN RELATION TO THE SERVICES RENDERED BY M/S. MOIRA STEEL LTD. H E INSTEAD OF FURNISHING THE EVIDENCES MERELY STATED THAT WHATEVER BILLS RAISED BY M/S. MOIRA STEEL LTD. WERE MISPLACED AS THEY HAD SHIFTED THEIR OFFICE RECENTLY. HE WAS REQUESTED TO FURNISH THE NAME OF THE PARTIES FOR WHOM THE WORK RELATED TO HANDLING, SUP ERVISION AND LIASONING WAS CARRIED OUT. IN THIS CONTEXT, HE AGAIN STATED THAT AS THE FILE WAS MISPLACED, THE DETAILS IN THIS REGARD COULD NOT BE FURNISHED AT THE TIME OF SURVEY. I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 21 IN VIEW OF THE ABOVE FACTS EMERGING FROM THE STATEMENT GIVEN BY SHRI MAHESH N . GUPTA AND THE OUTCOME OF SURVEY PROCEEDINGS, IT IS APPARENT THAT THE ASSESSEE COMPANY IS NOT HAVING ANY MATERIAL EVIDENCE TO SUGGEST THAT M/S. MOIRA STEEL LTD. HAD ACTUALLY RENDERED THE SERVICES AGAINST EXPENDITURE/PAYMENTS CLAIMED TO HAVE BEEN MADE BY T HE ASSESSEE. IT IS A SETTLED LAW THAT THE ONUS HEAVILY LIES UPON THE ASSESSEE TO ESTABLISH THAT A PARTICULAR EXPENDITURE IS EXCLUSIVELY INCURRED FOR THE BUSINESS PURPOSE. HOWEVER, AS MENTIONED THE ASSESSEE COMPANY IS NOT IN POSSESSION OF MATERIAL EVIDENCE TO JUSTIFY ITS CLAIM OF EXPENDITURE. THIS HAS LED TO ESTABLISH THAT THE ASSESSEE COMP A NY HAD DEBITED BOGUS EXPENDITURE TO THE EXTENT OF RS.2.37CRO RES AS NO DOCUMENTARY EVIDENCES WERE AVAILABLE/FOUND WITH THE ASSASSEE COMPANY. DURING THE YEAR UNDER REFEREN CE THE ASSESSEE HAD DEBITED BOGUS EXPENDITURE OF RS. 1,03,02 ,540/ - AND UNDERSTATED ITS INCOME. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THAT THE ASSESSEE HAS DEBITED BOGUS EXPENDITURE OF RS. 1,03,02 ,540/ - WHICH HAS ESCAPED ASSESSMENT WITHIN THE MEA NING OF SECTION 147 OF THE ACT. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE AC T . THEREFORE , I AM SATISFIED THAT THIS IS A FIT CASE TO RE - OPEN AND ISSUANCE OF NOTICE U/S.148 OF THE ACT . (B) BEFORE ME, THE A.R. OF THE APPELLANT CHALLENGED THE AO'S ACTION OF REOPENING THE PROCEEDINGS ON THE GROUND THAT, DURING THE COURSE OF REGULAR ASSESSMENT PROCEEDINGS, THE APPELLANT MADE 'TRUE AND FULL' DISCLOSURES OF ITS IN COME A ND EXPENDITURE, AND HENCE , THERE WAS NO REASON TO BELIEVE THAT INCOME E SCAPED ASSESSMENT. THE ALLEGED ESCAPED IN COME IN QUESTION WAS REGARDING THE PAYMENTS MADE TO MOIRA STEELS, TREATING THE SAME AS NON - BUSINESS EXPENDITURE ON THE GROUND THAT THE APPELLANT FAILED TO ESTAB LISH THE NATURE OF SERVICE RENDERED BY THE SAID CONCERN. THE A.R. SUBMITTED THAT THE DETAILS WERE ALREADY ON RECORD AND THE ASSESSMENT IN THE CASE OF THE APPELLANT WAS I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 22 COMPLETED U/S. 158BC AS WELL AS U/S. 143(3) FOR THE YEAR UNDER CONSIDERATION. THUS, THE ENTIRE RECORDS WERE ALREADY IN THE POSSESSION OF THE DEPARTMENT. THERE WAS NO INFORMATION AVAILABLE WIT H THE A.O. IN ORDER TO FORM A BELIEF THAT THE INCOME ESCAPED ASSESSMENT. (BA) ANOTHER LEG OF ARGUMENT PLACED BY THE A.R. OF TH E APPELLANT WAS THAT, TH E ASSESSMENTS FOR A.YS. 2001 - 02, 2002 - 03 AND 2003 - 01 WERE REOPENED ON THE BASIS OF A MERE SUSPICION RAISED DURING THE COURSE OF SURVEY PROCEEDINGS WHICH TOOK PLACE ON 4.5.2007 I.E., AY 2008 - 09. THE A.O., ON THE BASIS OF THIS SUSPICION, MERELY EXTRAPOLATED THE FACTS TO EARLIER YEARS. IT WAS ARGUED THAT, DURING THE COURSE OF SURVEY, THE DIRECTOR OF THE APPELLANT COMPANY JUST FAILED TO PROVIDE QUANTITATIVE DETAILS OF THE PAYMENTS, AS THE SAME WAS NOT IN HIS MEMORY, AND AS HE WAS GRILLED FOR AN EVENT THAT TOOK PLACE SOME FIVE YEARS AGO. (BAA) THE A.R. DREW SUPPORT FOR THE ABOVE PROPOS I TION FROM THE DECISION OF THE CIT VS GUPTA ABHUSHAN P. LTD. (312 ITR 166) WHEREIN THE HONBLE HIGH COURT OF DELHI HELD THAT: 'T HE REASONS RECORDED, FIRST OF ALL, INDICATE THAT THE SURVEY WAS CONDUCTED UNDER SECTION 133A IN THE BUSINESS PREMISES OF THE APPELLANT ON 7 TH MARCH, 2 002, WHICH FALL S WITHIN THE FINANCIAL YEAR 2001 - 02 RELATING TO THE ASSESSMENT YEAR 2002 - 03. THE YEARS IN QUESTION IN THE PRESENT AP PEALS ARE ASSESSMENT YEARS 1999 - 2000, 2000 - 01 AND 2001 - 02 . IT IS OBVIOUS THAT THE SURVEY WAS NOT CONDUCTED IN TH E YEARS IN QUESTION......... THIS IS MERELY A REASON TO SUSPECT AND CANNOT BE THE SAME AS A REASON TO BELIEVE WHICH IS NECESSARY PRECONDITION FOR ANY ACTION U/S. 147.THE CONCLUSION OF THE AO, BASED ON WHAT WAS NOTICED IN THE COURSE OF THE SURVEY, CANNOT BE EXTRAPOLATED TO OTHER YEARS. THE PURPORTED BELIEF OF THE A.O., ON THIS ASPECT OF THE MATTER, WAS NOT A BELIEF AT ALL BUT WAS MERELY A SUS PICION. SUCH SUSPICION COULD NOT T AKE THE PLACE OF A BELIEF AND THAT TOO A BELIEF WHICH WAS BASED ON REASONS. F ROM THE ABOVE DISCUSSION, IT IS APPARENT THAT THE TRIBUNAL HAD I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 23 CORRECTLY APPRECIATED THE LAW ON THE SUBJECT AND HAS ARRIVED AT THE CORRECT CONC LUSIONS. IN THE APPELLANTS CASE, THE ONLY REASON / BELIEF/ SUSPICION RAISED BY THE AO WAS ON THE BASIS OF EXTRAPOLATION OF EVENTS, WHICH COULD NOT BE A GROUND FOR REOPENING OF ASSESSMENTS, THE A.R. CONTENDED. (BB) THOUGH THE POWER CONFERRED UNDER S. 14 7 FOR REOPENING THE CONCLUDED ASSESSMEN T ARE VERY WIDE, THE SAID POWER CANNOT BE EXERCISED MECHANICALLY OR ARBITRARILY. THE EXPRESSION 'REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT' MEANS ENTERTAINING A REASONABLE BELIEF THAT A PARTICULAR INCOME WENT UNNOTICED BY THE AO AND HENCE ESCAPED ASSESSMENT. EVEN AFTER THE INTRODUCTION OF THE CONCEPT OF THE DEEMED ESCAPEMENT OF INCOME BY EXPLANATION. 2 TO SECTION 147 W.E.F. 1 ST APRIL, 1989, THE BELIEF THAT THE INCOME HAS ESCAPED ASSES SMENT ENTERTAINED BY THE AO MUST BE A PRUDENT BELIEF AND NOT MERE CHANGE OF OPINION. THUS, THE ASSESSMENT ORDER PASSED AFTER DETAILED DISCUSSION CANNOT BE REOPENED WITHIN A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE AO HAS R EASON TO BELIEVE THAT DUE TO SOME INHERENT DEFECT IN THE ASSESSMENT, THE INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED OR ASSESSED AL TOO LOW A RAT E OR EXCESSIVE RELIEF IS GRANTED OR EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE UNDER THE ACT HAS BEEN COMPUTED. (BC) FOR HIS CONTENTION THAT THE ASSESSMENT CANNOT BE REOPENED ON MERE CHANGE OF OPINION, THE A.R. PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENT: THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS KELVINATOR OF INDIA (2010) 187 TAXMAN 312, WHILE QUOTING FROM THE JUDGEMENT OF THE HON'BLE HIGH COURT OF DELHI (256 ITR 1), OBSERVED THAT 'WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF SECTION 143(3) OF THE ACT, A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 24 APPLICATION OF MIND. IT WAS HELD THAT IF IT BE HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN THE PROCEEDING WITHOUT ANYTHING FURTHER, TH E SAME WOULD AMOUNT TO GIVING PREMIUM TO AN AUTHORITY EXERCISING QUASI JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. IT WAS HELD THAT SECTION 147 OF THE ACT DOES NOT POSTULATE CONFERMENT OF POWER UPON THE ASSESSING OFFICER TO INITIATE REASSESSMENT P ROCEEDINGS UPON A MERE CHANGE OF OPINION, HELD THAT; THOUGH THE POWER TO REOPEN UNDER THE AMENDED SECTION 147 IS MUCH WIDER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS REASON TO BELIEVE FAILING WHICH SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE AO TO REOPEN ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION', WHICH CANNOT BE PER SE REASON TO REOPEN. ONE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW A ND POWER TO REASSESS. THE AO HAS NOT POWER TO REVIEW; HE HAS T HE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILMENT OF CERTAIN PRE - CONDITION AND IF THE CO NCEPT OF 'CHANGE OF OPINION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN INBUILT TEST TO CHECK ABUSE OF POWER BY THE AO'. HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF J P BAJPAI (HUF) VS CIT R E PORTED IN 269 IT R 40 (ALL), HELD THAT 'AS THE PRIMARY AND NECESSARY F ACTS RELATING TO THE SAID ENTRIES WERE ALREADY IN THE KNOWLEDGE OF THE AO, HENCE, BY NO STRETCH OF IMAGINATION IT CAN BE SAID THAT T HERE WAS NON - DISCLOSURE IN RESPECT OF THE SAID ENTRIES. RESPONSIBILITY OF THE APPELLANT IS LIMITED TO DISCLOSURE OF ALL PRIM ARY FACTS AND NOTHING BEYOND THAT. IF THE CONCLUSION DRAWN BY THE AO FROM THE PRIMARY FACTS DISCLOSED BY THE APPELLANT ARE ERRONEOUS, THE ASSESSING AUTHORITY I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 25 CANNOT REOPEN THE ASSESSMENT MERELY ON THE BASIS OF A CHANGE OF OPINION. IT IS OBVIOUS THAT THE IM PUGNED NOTICES UNDER SECTION 148 WERE ISSUED ONLY ON THE BASIS OF CHANGE OF OPINION ON THE PART OF THE AO.' HONBLE HIGH COURT OF BOMBAY IN THE CASE OF GERMAN REMEDIES LTD. VS. DCIT (285 ITR 26), HELD THAT THE ASSESSMENT ORDER PASSED AFTER DETAILED D ISCUSSION CANNOT BE REOPENED WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE AO HAS REASON TO BELIEVE THAT DUE TO SOME INHERENT DEFECT IN THE ASSESSMENT, THE INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED OR ASSESSE D AT TOO LOW A RATE OR EXCESSIVE RELIEF IS GRANTED OR EXCESS LOSS OR DEPRECIATION ALLOWANCE OR ANY OT HER ALLOWANCE UNDER THE ACT HAS BEEN COMPUTED'. HONBLE HIGH COURT OF DELHI IN THE CASE OF TECHSPAN INDIA (P) LTD. VS ITO (283 ITR 212), HELD THAT - 'ON CE THE ASSESSMENT WAS COMPLETED AND DEDUCTION U/S.10A WAS ALLOWED TO T HE ASSESSEE AFTER A DETAILED INQUIRY AND TAKING NOTE OF THE FACT THAT THE ASSESSEE WAS NOT MAINTAINING SEPARATE BOOKS OF ACCOUNT FOR ITS TWO DIVISIONS, REOPENING OF ASSESSMENT FOR THE PU RPORTED REASON THAT DEDUCTION U/S. 10A HAS BEEN ALLOWED IN EXCESS CANNOT BE SUSTAINED AS SUCH PROCEEDINGS WERE INITIALED MERELY ON THE BASIS OF CHANGE OF OPINION ON THE SAME SET OF FACT S . I HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS OF THE AR OF THE AP PELLANT AND ALSO PERUSED THE FACTS OF THE ABOVE CITED JUDICIAL PRONOUNCEMENTS. THE FACTS BEFORE ME ARE THAT, THE A.O. FORMED A BELIEF THAT THE APPELLANT'S ASSESSMENT GOT ESCAPED ASSESSMENT ON THE BASIS OF THE SURVEY. I NCIDENTALLY, I NOTICED THAT THIS SURV EY DID NOT YIELD ANYTHING INCRIMINATING MATERIALS, OR INFORMATION INDICATING THEREIN I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 26 THAT THE PAYMENTS MADE BY THE APPELLANT TO MOIRA STEELS WERE BOGUS, THEREFORE, THERE WAS NO MATERIAL IN POSSESSION OF THE A.O. TO FORM A BELIEF THAT THE ALLEGED EXAGGERATI ON / EXISTENCE OF EXPENDITURE LED TO ESCAPEMENT OF INCOME. I ALSO FIND THAT, THE APPELLANT WAS SUBJECT MATTER OF SEARCH BY THE DEPARTMENT IN THE YEAR 2002 AND THAT THE ASSESSMENT OF THE APPELLANT WAS COMPLETED BY VIRTUE OF BLOCK ASSESSMENT PROCEEDINGS U/S. 158BC. IN THE SAID PROCEEDINGS NOTHING INCRIMINATING REGARDING T HIS PAYMENT WAS NOTICED EITHER IN THE SEIZED MATERIAL OR IN THE ASSESSMENT RECORDS. THEREFORE, IT COULD NOT BE SAID THAT THE SURVEY YIELDED INFORMATION, WHICH LED TO BELIEVE THAT THE APPELLAN T DID NOT FURNISH 'FULL AND TRUE' PARTICULARS OF ITS INCOME. (CA) IT IS SEEN THAT THE SURVEY TOOK PLACE ON 4.5.2007, WHICH FELL IN FINANCIAL YEAR 2007 - 08. THE ASSESSMENT YEAR UNDER CONSIDERATION IS AY 2003 - 04 I.E., FY 2002 - 03. DURING THE COURSE OF SURVEY, THE AUTHORIZED OFFICERS RAISED QUESTION BEFORE THE DIRECTOR OF THE APPELLANT COMPANY TO EXPLAIN THE PURPOSE OF THE PAYMENTS MADE TO MOIRA STEELS. AFTER EXPLAINING THE SAME, HE WAS FURTHER ASKED TO FURNISH QUANTITATIVE DETAILS OF THE PAYMENTS, WHICH THE DI RECTOR FAILED TO HONOUR. ON THIS BASIS, THE AO FORMED A BELIEF THAT THE PAYMENTS WERE NOT ALLOWABLE, AS THE SAME WERE NOT INCIDENTAL TO THE APPELLANT'S BUSINESS. UNDER THE CIRCUMSTANCE, IT HAS TO BE BORNE IN MIND THAT, THE DIRECTOR WAS ASKED TO COMMENT UPO N AN EVENT WHICH TOOK PLACE AROUND 4 TO 5 YEARS BACK. MERELY BECAUSE THE DIRECTOR OF THE APPELLANT FAILED TO FURNISH QUANTITATIVE DETAILS OF THE SAID PAYMENT, IT COULD NOT BE SAID THAT THE APPELLANT COMPANY DID NOT FURNISH FULL AND TRUE PARTICULARS OF ITS INCOME. THE CASE OF THE APPELLANT IS SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THE CASE OF GUPTA ABHUSAN P LTD. (SUPRA), WHEREIN HONBLE COURT HELD THAT, THE CONCLUSION OF THE ASSESSING OFFICER, BASED ON WHAT WAS NOTICED IN THE COURSE OF THE SURVEY, COULD NOT BE EXTRAPOLATED TO OTHER YEARS. (CB) ANOTHER IMPORTANT ASPECT WHICH CANNOT BE OVERLOOKED IS THAT, WHILE FINALIZING THE ASSESSMENTS FOR AYS 2001 - 02 TO 2003 - 04, THE A.O. UNDERTOOK THE FOLLOWING COURSE OF ACTION : - I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 27 A.Y . 2001 - 02 - THE A.O. IS SUED SCRUTINY NOTICE FOR A.Y. 2001 - 02 ALONG WITH A QUESTIONNAIRE DATED 30.04.2002 ASKING THEREIN THE DETAILS OF EXPENSES AND THE CREDITORS, INCLUDING THE DETAILS OF EXPENSES PAID ON ACCOUNT OF HANDLING CHARGES. - AGAIN THE AO ISSUED NOTICE U/S. 142(1) OF THE ACT TO PRODUCE THE DETAILS. - IN RESPONSE TO THE ABOVE, THE APPELLANT FURNISHED DETAILS AS DESIRED BY THE AO AND PRECISELY, VIDE PARA 6.0 OF HIS REPLY FURNISHED THE DETAILS OF MONTH - WISE STORAGE, AND HANDLING CHARGES. - AGAIN, DURING PERSONAL HEARIN G ON 10.12.2003, THE AO DIRECTED THE APPELLANT TO FURNISH FURTHER DETAILS OF STORAGE AND HANDLING CHARGES AND CONFIRMATIONS OF CREDITORS, WHICH INCLUDED THE ACCOUNT OF MOIRA STEELS LTD. - THE APPELLANT FU RNISHED THE ABOVE DETAILS ON 10. 1.2004. A.Y . 200 2 - 03 - THE AO ISSUED A NOTICE U/S. 142(1) ON 10. 5. 2004, BY WHICH, UNDER QUESTION NO. 30, THE A.O SOUGHT DETAILS OF PAYMENTS MADE TOWARDS TRANSPORTATION AND STORAGE TERMINAL CHARGES. IN RESPONSE TO THIS, THE APPELLANT SUBMITTED DETAILS VIDE LETTER DATED 8.6.2004. - THE AO THEN ISSUED A GENERAL LETTER AND A NOTICE U/S, 142(1) CALLING FOR FURTHER DETAILS, WHICH WERE SUPPLIED BY THE APPELLANT VIDE LETTER DATED 20.1.2005, INTER ALIA, CONTAINING THEREIN THE DETAILS OF PAYMENTS ALONG WITH COPY OF ACCOUNTS. I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 28 TH EREAFTER, THE A.O. BY A LETTER DATED 22.1.2005, SPECIFICALLY CALLED FOR CONFIRMATIONS FROM VARIOUS PARTIES TO WHOM THE APPELLANT MADE PAYMENTS INCLUDING THE NAME OF MOIRA STEELS (WHICH APPEARED AT SR. NO. 6). IN RESPONSE TO THE SAME, THE APPELLANT BY A FO RWARDING LETTER DATED 7.2.2005 FURNISHED THE DETAILS SO CALLED FOR AND THE SAME WAS VERIFIED AND ACCEPTED AND NO ADVERSE INFERENCE WAS DRAWN IN THE ASSESSMENT ORDER. A.Y. 2003 - 04 - THE AO ISSUED A SCRUTINY NOTICE FOR AY 2003 - 04 VIDE LETTER DATED 06.04.20 05 ASKING THEREIN THE DETAILS OF EXPENSES AND THE CREDITORS, WHICH INCLUDED THE DETAILS OF EXPENSES PAID ON ACCOUNT OF HANDLING CHARGES. - AGAIN, THE AO, ON 27.02.2006, ASKED THE APPELLANT TO FURNISH DETAILS OF HANDLING CHARGES AND ADDRESSES OF CREDITORS AND CONFIRMATIONS THEREOF'. - THE APPELLANT, VIDE REPLY DTD.09.03.2006 FURNISHED THE REQUISITE DETAILS WHICH INCLUDED THE DETAILS OF EXPENSES, LEDGER ACCOUNTS AND CONFIRMATION OF MOIRA STEEL LIMITED. (CC) THE ABOVE FACTS, CULLED OUT FROM THE CASE RECORD FILES, CLEARLY SHOWED THAT THE ISSUE REGARDING THE PAYMENT MADE TO MOIRA STEELS WAS ALREADY CONSIDERED BY THE AO FOR ALL THE RELEVANT ASSESSMENT YEARS. HAD THERE BEEN AN IOTA OF DOUBT IN THE MIND OF THE AO, HE WOULD HAVE, DEFINITELY DRAWN AN ADVERSE INFERE NCE. TAKING A LEAF OUT OF THE HON'BLE DELHI HIGH COURT'S DECISION IN THE CAS E OF TECHSPAN INDIA (P) LTD (283 ITR 212), THE HON'BLE JUDGES HAD EMPHASIZED THAT, THE POWER TO REOPEN AN ASSESSMENT WAS CONFERRED BY THE LEGISLATURE NOT WITH THE INTENTION TO ENAB LE THE ITO TO REOPEN THE FINAL DECISION MADE AGAINST THE REVENUE IN RESPECT OF QUESTIONS THAT DIRECTLY AROSE FOR DECISION IN EARLIER PROCEEDINGS. IF THAT WERE NOT THE LEGAL POSITION IT WOULD RESULT IN PLACING AN UNRESTRICTED POWER OF REVIEW IN THE HANDS OF T HE ASSESSING AUTHORITIES DEPENDING ON THEIR I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 29 CHANGING MOODS. IT WAS ALSO HELD THAT, IF AN EXPENDITURE, OR DEDUCTION WAN WRONGLY ALLOWED WHILE COMPUTING THE TAXABLE INCOME OF THE APPELLANT, THE SAME COULD NOT BE BROUGHT TO TAX BY REOPENING THE ASSESSMENT M ERELY ON ACCOUNT OF THE AO SUBSEQUENTLY FORMING AN OPINION THAT EARLIER HE HAD ERRED IN ALLOWING THE EXPENDITURE OR THE DEDUCTION.' (CD) THERE ARE PLETHORA OF JUDICIAL PRONOUNCEMENTS, WHICH AIR THE ABOVE VIEW AND AFTER RELATED OPINIONS. THEY ARE CITED BE LOW, IN A NUTSHELL * M. J. PHARMACEUTICALS LTD. V. DCIT [2008] 297 ITR 119 (BOM.) REASSESSMENT PROCEEDING BASED ON CHANGE OF OPINION IS NOT VALID.' * CIT V. FEATHER FOAM ENTERPRISES (P) LTD. [2008] 296 ITR 342 (DEL.) 'WHERE THE EXPLANATION OF ASS ESSEE HAS BEEN ACCEPTED IN ORIGINAL ASSESSMENT, SUBSEQUENT REJECTION OF EXPLANATION FOR THE PURPOSE OF REASSESSMENT AMOUNTS TO CHANGE OF OPINION.' * CIT V. BHANJI LAVJI [1971] 79 ITR 582 (SC) 'WHEN THE PRIMARY FACTS NECESSARY FOR ASSESSMENT ARE FULLY A ND TRULY DISCLOSED, THE ITO WILL NOT BE ENTITLED ON CHANGE OF OPINION TO COMMENCE PROCEEDINGS FOR REASSESSMENT. SIMILARLY, IF HE HAS RAISED A WRONG LEGAL INFERENCE FROM THE FACTS DISCLOSED, HE WILL NOT, ON THAT ACCOUNT, BE COMPETENT TO COMMENCE REASSESSMEN T PROCEEDINGS. ' * ITO V. NAWAB MIR BARKATALI KHAN BAHADUR [1974] 97 ITR 239 (SC) 'HAVING SECOND THOUGHTS ON THE SAME MATERIAL, AND OMISSION TO DRAW THE CORRECT LEGAL PRESUMPTION DURING I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 30 ORIGINAL ASSESSMENT DO NOT WARRANT THE INITIATION OF A PROCEEDING U /S 147.' * SIRPUR PAPER MILLS LTD. V. ITO [1978] 114 ITR 404 (AP) 'INCOME - TAX DEPARTMENT CANNOT BE PERMITTED TO BRING FRESH LITIGATIONS BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW VERSION WHICH THEY PRESENT AS THAT SHOULD BE THE INFERENCE OR PRO PER INFERENCE EITHER OF THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCES.' * NAWABGANJ SUGAR MILLS CO. LTD, V. CLI [1980] 123 ITR 28 7 (DELHI) THERE SHOULD BE SOMETHING POSITIVE TO SHOW THAT THERE WAS IN FACT SUCH FORMATION OF OPINION AT THE ORIGI NAL ASSESSMENT STAGE. IF INITIALLY NO OPINION WAS FORMED, THE QUESTION OF CHANGE THEREIN COULD NOT BE SAID TO TAKE PLACE. * CIT V. GEORGE WILLIAMSON (ASSAM) LTD. [2002] 258 ITR 126 (GAU) (CG) IT WAS ALREADY BROUGHT ON THIS APPELLATE ORDER THAT, DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, A DETAILED INQUIRY WAS CONDUCTED BY THE AO. NOW ON THE SAME MATERIAL A DIFFERENT VIEW WAS SOUGHT TO BE TAKEN AND THAT IS NOTHING BUT A MERE 'CHANGE OF OPINION AND THAT WOULD NOT TANTAMOUNT TO E SCAPEMENT OF INCOME. MERE CHANGE OF OPINION WOULD NOT CONFER JURISDICTION UPON THE AO TO INITIATE PROCEEDINGS U/S. 147. HENCE, IN VIEW OF THE ACTUAL FACTUAL FINDINGS IN THE APPELLANT'S CASE COUPLED WITH SEVERAL JUDICIAL VERDICTS, I HOLD THAT REOPENING AN A SSESSMENT ON AN ISSUE CONSIDERED EARLIER IN THE PROCEEDINGS U/S. 143(3) WOULD AMOUNT TO CHANGE OF OPINION AND ON A CHANGE OF OPINION THE ASSESSMENT PROCEEDINGS CANNOT BE REOPENED. THE RECENT DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT(A) VS KE LVINATOR OF INDIA (SUPRA), IS RELIED UPON BY ME IN HOLDING THAT THE AO DEEMED TO HAVE APPLIED HIS MIND AS FACTS WERE VERY MUCH ON RECORD. NOT ONLY THAT, I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 31 REOPENING U/S. 147 ON CHANGE OF OPINION IS NOT PERMISSIBLE EVEN WITHIN FOUR YEARS. 5 . 3 SAME HAS BEE N OPPOSED BEFORE US ON BEHALF OF REVENUE INTER ALIA STATED THAT CIT(A) WAS NOT JUSTIFIED IN TREATING REOPENING PROCEEDINGS INITIATED U/S.147 AS BAD IN LAW AND NOT JUSTIFIED IN ANNULLING THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S. 147. ACCORDINGLY, ORDER OF CIT(A) BE SET ASIDE AND TH A T ON ASSESSING OFFICER ON THE ISSUE BE RESTORED. ON OTHER HAND, LEARNED AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A). 5 . 4 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT ASSESSING OFFIC ER FORMED A BELIEF THAT ASSESSE GOT ESCAPED ASSESSMENT ON THE BASIS OF SURVEY. THE SAID SURVEY DID NOT YIELD ANYTHING INCRIMINATING MATERIALS, OR INFORMATION INDICATING THEREIN THAT PAYMENTS MADE BY ASSESSE TO M/S. MOIRA STEELS WERE BOGUS. THEREFORE, THE RE WAS NO MATERIAL IN POSSESSION OF ASSESSING OFFICER TO FORM A BELIEF THAT ALLEGED EXAGGERATION / EXISTENCE OF EXPENDITURE LED TO ESCAPEMENT OF INCOME. AS STATED ABOVE, ASSESSE WAS SUBJECT MATTER OF SEARCH BY DEPARTMENT IN YEAR 2002 AND THAT ASSESSMENT O F ASSESSE WAS COMPLETED BY VIRTUE OF BLOCK ASSESSMENT PROCEEDINGS U/S. 158BC. IN SAID PROCEEDINGS , NOTHING INCRIMINATING REGARDING THIS PAYMENT WAS NOTICED EITHER IN SEIZED MATERIAL OR IN ASSESSMENT RECORDS. THEREFORE, IT COULD NOT BE SAID THAT SURVEY YI ELDED INFORMATION WHICH LED I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 32 TO BELIEVE THAT ASSESSE DID NOT FURNISH FULL AND TRUE PARTICULARS OF INCOME. 5 .4.1 AS STATED EARLIER , SURVEY TOOK PLACE ON 04.05.2007 WHICH FELL IN FINANCIAL YEAR 2007 - 08. THE ASSESSMENT YEAR UNDER CONSIDERATION IS A.Y. 200 3 - 0 4 I.E., F.Y. 200 2 - 03 . DURING COURSE OF SURVEY, THE AUTHORIZED OFFICERS RAISED QUESTION BEFORE THE DIRECTOR OF ASSESSE COMPANY TO EXPLAIN THE PURPOSE OF PAYMENTS MADE TO M/S. MOIRA STEEL. AFTER EXPLAINING THE SAME, HE WAS FURTHER ASKED TO FURNISH QUANTIT ATIVE DETAILS OF PAYMENTS, WHICH DIRECTOR FAILED TO COMPLY. ON THIS BASIS, ASSESSING OFFICER FORMED TO BELIEF THAT PAYMENTS WERE NOT ALLOWABLE AS ASSESSEES BUSINESS. IT IS PERTINENT TO NOTE THAT DIRECTOR WAS ASKED TO COMMENT UPON AN EVENT WHICH TOOK PLA CE FOUR TO FIVE YEARS BACK. THE MERE LAPSE ON PART OF DIRECTOR WHO FAILED TO FURNISH QUANTITATIVE DETAILS OF SAID PAYMENT. IT COULD NOT BE SAID THAT ASSESSE COMPANY DID NOT FURNISH FULL AND TRUE PARTICULARS OF ITS INCOME. 5 . 4.2 WHILE FINALIZING ASSESSM ENT FOR 2001 - 02 TO 2003 - 04, ASSESSING OFFICER UNDER TOOK FOLLOWING COURSE OF ACTION AS DETAILED ABOVE WHILE DEALING A.Y. 2001 - 02 IN PARA 3.6 OF THIS ORDER. IN THIS BACKGROUND, CIT(A) WAS JUSTIFIED IN OBSERVING THAT ISSUE REGARDING PAYMENT MADE TO M/S. MOIR A STEELS WAS ALREADY CONSIDERED BY THE ASSESSING OFFICER AS DISCUSSED ABOVE . I N CASE THERE WAS ANY DOUBT IN HIS MIND TO KEEP WRONG ADVERSE INFERENCE ON THE POINT. T HE POWER TO REOPEN AN I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 33 ASSESSMENT WAS CONFERRED BY THE LEGISLATURE NOT WITH THE INTENTION TO ENABLE THE ASSESSING OFFICER TO REOPEN THE FINAL DECISION MADE AGAINST THE REVENUE IN RESPECT OF QUESTIONS THAT DIRECTLY AROSE FOR DECISION IN EARLIER PROCEEDINGS. IF THAT WERE NOT THE LEGAL POSITION IT WOULD RESULT IN PLACING AN UNRESTRICTED POWER OF REV IEW IN THE HANDS OF THE ASSESSING AUTHORITIES DEPENDING ON THEIR WHIMS. IF AN EXPENDITURE, OR DEDUCTION WAS WRONGLY ALLOWED WHILE COMPUTING THE TAXABLE INCOME OF ASSESSEE, THE SAME COULD NOT BE BROUGHT TO TAX BY REOPENING THE ASSESSMENT MERELY ON ACCOUNT O F ASSESSING OFFICER SUBSEQUENTLY FORMING AN OPINION THAT EARLIER HE HAD ERRED IN ALLOWING THE EXPENDITURE OR THE DEDUCTION, WHERE EXPLANATION OF ASSESSEE HAS BEEN ACCEPTED IN ORIGINAL ASSESSMENT, SUBSEQUENT REJECTION OF EXPLANATION FOR THE PURPOSE OF REASS ESSMENT AMOUNTS TO CHANGE OF OPINION. WHEN THE PRIMARY FACTS NECESSARY FOR ASSESSMENT WE RE FULLY AND TRULY DISCLOSED, ASSESSING OFFICER IS NOT ENTITLED ON CHANGE OF OPINION TO COMMENCE PROCEEDINGS FOR REASSESSMENT. SIMILARLY, IF HE HAS RAISED A WRONG LEG AL INFERENCE FROM THE FACTS DISCLOSED, HE WILL NOT, ON THAT ACCOUNT, BE COMPETENT TO COMMENCE REASSESSMENT PROCEEDINGS. HAVING SECOND THOUGHTS ON THE SAME MATERIAL, AND OMISSION TO DRAW THE CORRECT LEGAL PRESUMPTION DURING ORIGINAL ASSESSMENT DO NOT WARRA NT THE INITIATION OF A PROCEEDING U/S 147. IT IS APPARENT FROM THE RECORD THAT DURING COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, A DETAILED INQUIRY WAS CONDUCTED BY ASSESSING OFFICER . AS DISCUSSED ABOVE, N OW ON THE SAME MATERIAL A DIFFERENT VIEW WAS SOUG HT TO BE TAKEN AND THAT IS I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 34 NOTHING BUT A MERE 'CHANGE OF OPINION AND THAT WOULD NOT TANTAMOUNT TO ESCAPEMENT OF INCOME. MERE CHANGE OF OPINION WOULD NOT CONFER JURISDICTION UPON ASSESSING OFFICER TO INITIATE PROCEEDINGS U/S. 147 AS HAS BEEN DONE IN THIS CASE . HENCE, IN VIEW OF FACTUAL FINDINGS IN ASSESSEES CASE , CIT(A) WAS RIGHT IN HOLDING THAT REOPENING AN ASSESSMENT ON AN ISSUE CONSIDERED EARLIER IN THE PROCEEDINGS U/S. 143(3) WOULD AMOUNT TO CHANGE OF OPINION AND ON A CHANGE OF OPINION THE AS SESSMENT PROCEEDINGS CANNOT BE REOPENED. IN VIEW OF THIS, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO ALLOWED THE APPEAL OF ASSESSEE ON PRELIMINARY ISSUE . SAME IS UPHELD. 6 . IN VIEW OF OUR DECISION IN REVENUES APPEAL, C.O. NO. 21/RJT /2011 FOR A.Y. 2003 - 04 FILED BY ASSESSEE GOES ACADEMIC. SO, ASSESSEES C.O. AS WELL AS APPEAL OF REVENUE ARE DISMISSED. 7 . AS A RESULT, ALL THREE APPEAL S FILED BY REVENUE AND ALL CORRESPONDING CROSS OBJECTION S FILED BY ASSESSEE ARE DISMISSED. PRONOUNCE D IN THE OPEN COURT ON THIS THE 26 TH DAY OF JUNE , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT : DATED 26 /0 6 /2015 TRUE COPY S K S INHA COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) I T A NO S . 1 0 02, 1003 & 1004/R/10 & C.O. NO S . 19, 20 & 21 /R/1 1 , A.Y S . 01 - 02, 02 - 03 & 03 - 04 [ ACIT VS. KIRAN SHIPPING AGENCIES ] PAGE 35 4. THE CIT CONCERNED. 5. THE DR., ITAT, RAJKOT 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT