M/s. AFCONS INFRASTRUCTURE LTD., MUMBAI V. ACIT - 8(1), MUMBAI

ITA 1371/MUM/2006

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3997 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 26-10-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 27-02-2006
• Court: TRIBUNAL
• Department Lawyers: JASBIR CHA UHAN
• Assessee Lawyers: NITIESH JOSHI
• Keywords: Depreciation; Difference of opinion; Reason to believe; Change of opinion
• Section: 147; 139

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI L BENCH , ,, , , , , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & RAM LAL NEGI,JUDICIAL MEMBER /.ITA NO.1486, 2631,3643 & 3644/MUM/2006, / ASSESSMENT YEAR-1997-98 TO 2000-2001 ACIT-RANGE-8(1) ROOM NO.210, AAYAKAR BHAVAN M.K. ROAD,MUMBAI-400 020. VS. M/S. AFCONS INFRASTRUCTURE LTD. AFCONS HOUSE, 16, SHAH INDL. ESTATE, VEERA DESAI ROAD, AZAD NAGAR, P.O., P.B. NO.11978 ANDHERI (W),MUMBAI-400 053. PAN:AAACA 9067 G ( / APPELLANT) ( / RESPONDENT) /.ITA NO.1371, 2324 ,3251 & 3252/MUM/2006, /ASSESSMENT YEAR-1997-98 TO 2000-2001 M/S. AFCONS INFRASTRUCTURE LTD. MUMBAI-400 053. PAN:AAACA 9067 G VS. ACIT-RANGE-8(1) MUMBAI-400 020. ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY : SHRI NITIESH JOSHI / REVENUE BY : SHRI JASBIR CHAUHAN / DATE OF HEARING : 08.02.2016 / DATE OF PRONOUNCEMENT : 12.02.2016 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER BENCH - CHALLENGING THE ORDERS OF THE CS.IT(A)-MUMBAI,THE A SSESSING OFFICERS(AO.S)AND THE ASSESSEE HAVE FILED CROSS APPEALS FOR THE ABOVE MEN TIONED FOUR ASSESSMENT YEARS (AY.S.).AS THE ISSUES INVOLVED IN THE APPEALS ARE COMMON,SO,WE ARE ADJUDICATING ALL THE APPEALS BY A COMMON ORDER. ITA NOS.1486 & 2631/MUM/2006 (A.YS.1997-98 , 98-99 ) (DEPARTMENTS APPEAL): ITA NOS.1371 & 2324/MUM/2006 (A.YS.1997-98 TO 98-99 ) (ASSESSEES APPEAL) : 2. ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF CIVI L CONSTRUCTION AND UNDERTAKES CONSTRUCTION OF ROADS,BRIDGES, PILE FOUNDATIONS AND MARINE WORKS.THE DETAILS OF DATES OF FILING OF RETURNS OF INCOME,DATE OF ASSESSMENT ORDERS,DATE S OF ISSUE OF 148 NOTICES,ASSESSED INCOMES AS PER SECTION 143(3)R.W.S.147 CAN BE TABULATED AS UNDER: ASSESSMENT YEAR DT. OF FILING OF ORIGINAL RETURN DT. OF ISSUE OF NOTICE U/S. 148 ASSESSED INCOME U/S.143 (3) R.W.S.147(RS.) 1997-98 28.11.1997 25.03.2004 16,99,27,000/- 1998-99 30.11.1998 25.03.2004 15,14,47 ,000/- 1999-2000 30.12.1999 10.03.2004 19,99,00,000/- 2000-01 30.11.2000 10.03.2004 20,52,36,000/- FIRST WE WOULD TAKE THE APPEALS FILED BY THE AO.S.F OR THE AY.S.1997-98 AND 1998-99.THE AO HAD ISSUED NOTICES U/S. 148 OF THE ACT.HE OBSERVED THAT THE ASSESSEE HAD CLAIMED DEDUCTION OF LEASE RENT OF ASSETS WHICH WERE BASICALLY IN THE NA TURE OF FINANCING TRANSACTION,THAT IT HAD 1486/06 & ORS/AFCONS(8APPLS) 2 CLAIMED DEDUCTION OF 1131.31 LAKHS,THAT THE LEASE T RANSACTIONS WERE NOT GENUINE, THAT THE ASSESSEE WAS ENTITLED TO CLAIM THE INTEREST PAID ON FINANCIAL TRANSACTION,THAT IT HAD CLAIMED THE REPAYMENT OF PRINCIPAL AMOUNT ALONG WITH THE INTERE ST AS THE DEDUCTIBLE EXPENSES IN RESPECT OF LEASE RENT PAID,THAT THE ASSESSEE HAD CLAIMED EXCES S DEDUCTION ON ACCOUNT OF PAYMENT OF PRINCIPAL AMOUNT.HE ISSUED A NOTICE U/S.148 OF THE ACT.THE ASSESSEE OBJECTED THE RE- OPENING.AFTER CONSIDERING THE AVAILABLE MATERIAL,TH E AO HELD THAT ONLY THE INTEREST COMPONENT EMBEDDED INTO LEASE RENTALS WAS ALLOWABLE EXPENDITURE,THAT INTEREST COMPONENT WORKED OUT TO RS.443.02 LAKHS,THAT PRINCIPAL COMPON ENT OUT OF LEASE RENTAL PAID,AGGREGATING TO RS.688.29LAKHS WAS NOT ALLOWABLE. 3. AGGRIEVED BY THE ORDERS OF THE AO.S.,THE ASSESSEE P REFERRED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM IT WAS ARGUED THAT THE PROVISO TO EXPLANATION 2 TO SECTION 147 WAS APPLICABLE TO THE FACTS OF THE CASE S,THAT THE ORDERS PASSED BY THE AO.S.WERE NOT AS PER THE PROVISIONS OF THE ACT.AFTER CONSIDER ING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDERS,HE HELD THAT THE ORDERS PASSED BY THE AO.S.WERE CONTRARY TO THE PROVISIONS OF THE ACT.ALLOWING THE APPEALS FILED BY THE ASSESS EE,HE HELD THAT THE AO.S.HAD WRONGLY ISSUED NOTICE U/S.148 OF THE ACT FOR BOTH THE AY.S. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR)STATED THA T THE MATTERS COULD BE DECIDED ON MERTIS.THE AUTHORISED REPRESENTATIVE(AR)CONTENDED T HAT THE NOTICE U/S.148 WAS ISSUED AFTER FOUR YEARS,THAT THE AO HAD NOT MENTIONED AS TO HOW THE FAILURE OF THE ASSESSEE WAS RESPONSIBLE FOR ESCAPEMENT OF INCOME,THAT THE ASSES SEE HAD DISCLOSED ALL THE NECESSARY FACTS IN THE RETURN OF INCOME.HE RELIED UPON THE CASE OF HINDUSTAN LEVER(268ITR362)AND REFERRED TO THE PAGE 31,39,96 AND 104-6 OF THE PAPER BOOK. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE WOULD LIKE TO REPRODUCE THE REASONS RECORDED BY THE AO FOR RE-OPE NING THE ASSESSMENT AND SAME READ AS UNDER: 'ON PERUSAL OF THE RECORDS IT IS NOTICED THAT THE L EASE RENTALS AMOUNTING TO RS.1 1.31 CRORES WAS ALLOWED TO THE ASSESSEE FOR A. Y. I 997-98. FRO M THE LEASE AGREEMENT IT IS OBSERVED THAT THE ENJOYMENT OF THE PROPERTY TAKEN ON LEASE, THE L ESSEE APART FROM PAYING THE RENT HAD TO ENSURE ITS MAINTENANCE ON PROPER CONDITION. IN THE EVENT OF LOSS OR DESTRUCTION ALSO, IT WAS TO CONTINUE TO PAY THE LEASE RENT IF ASSET SURVIVED FO R LEASE PERIOD THE LESSEE HAD THE OPTION TO ACQUIRE THE ASSET AT A NOMINAL PRICE. ON THE OTHER HAND THE LESSOR COMES IN THE PICTURE EVEN AT THE TIME OF PURCHASE., ONLY TO MAKE THE PAYMENT THA T TOO ONLY WHEN AUTHORISED BY THE LESSEE TO DO SO. HENCE FOR ALL THE INTENTS AND PURPOSES, THE LESSEE IS THE OWNER OF THE ASSET AND THE LESSOR THE FINANCIER MAKING PAYMENT AT THE TIME OF PURCHASE. THE ARRANGEMENTS ONLY ENSURED THAT THE LESSER IN ALL CIRCUMSTANCES GETS BUCK THE MONEY ADVANCED AND NOTHING MORE. SUCH AN ARRANGEMENT CANNOT BE TREATED AS A GENUINE LEASE AG REEMENT BUT A FINANCING TRANSACTION. IN SUCH SITUATION ONLY THE INTEREST PAID ON LOAN TAKEN IS AN ALLOWABLE DEDUCTION AND NOT THE REPAYMENT OF THE PRINCIPAL AMOUNT'. A CURSORY GLANCE AT THE REASONS REVEAL THAT THOUGH THE ASSESSMENT WAS REOPENED AFTER A PERIOD OF FOUR YEARS,THE AO.S.HAD NOT MENTIONED AS TO HOW FAILURE OF THE ASSESSEE HAD RESULTED IN THE ESCAPEMENT OF INCOME.WE ARE OF THE OPINION THAT IF THE AO WANTS TO INVOKE THE PROVISIONS OF SECTION147 AFTER A PERIOD OF FOUR YEARS,HE HAS TO C OMPULSORILY ELABORATE THAT THERE WAS FAILURE ON PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY THE RELEVANT FACTS TO DECIDE THE TAXABILITY OF THAT PARTICULAR YEAR.THE COURTS ARE OF THE VIEW THA T NOT ONLY THE FACT OF FAILURE OF THE ASSESSEE HAS TO BE MENTIONED IT HAS TO BE EXPLAINED AS TO HO W ASSESSEE HAD FAILED AND HIS FAILURE ENDED IN UNDER ASSESSMENT/ESCAPEMENT OF INCOME.HERE,WE WO ULD LIKE TO REPRODUCE A PORTION OF JUDGMENT OF HINDUSTAN LEVER LTD. (SUPRA)AND SAME RE ADS AS UNDER: 1486/06 & ORS/AFCONS(8APPLS) 3 WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTIO N 143 OF THE INCOME-TAX ACT, 1961, HAS BEEN MADE FOR AN ASSESSMENT YEAR, NO ACTION CAN BE TAKEN UNDER SECTION 147 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSME NT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. THE REASONS RECORDED FOR ISSUING NOTICE PROVI DE THE LINK BETWEEN CONCLUSION AND EVIDENCE. THE REASONS RECORDED MUST BE BASED ON EVI DENCE. THE ASSESSING OFFICER IN THE EVENT OF CHALLENGE TO THE REASONS, MUST BE ABLE TO JUSTIF Y THE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MATERIAL NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY WAS NECESSARY FOR ASSESSME NT OF THAT ASSESSMENT YEAR, SO AS TO ESTABLISH THE VITAL LINK BETWEEN THE REASONS AND EV IDENCE. THAT VITAL LINK IS THE SAFEGUARD AGAINST ARBITRARY REOPENING OF THE CONCLUDED ASSESS MENT. THE REASONS RECORDED BY THE ASSESSING OFFICER CANNOT BE SUPPLEMENTED BY FILING AN AFFIDAVIT OR MAKING AN ORAL SUBMISSION. SIMILARLY,IN THE CASE OF GERMAN REMEDIES LTD.(287 I TR 494),THE HONBLE BOMBAY HIGH COURT HAS HELD AS FOLLOW: THAT FAILURE ON THE PART OF THE ASSESSEE TO DISCLOS E FULL AND TRUE MATERIAL HAD NOT BEEN ALLEGED. IN THE CIRCUMSTANCES, THE NOTICE HAVING BE EN ISSUED BEYOND FOUR YEARS FROM THE LAST DATE OF THE RELEVANT ASSESSMENT YEAR WITHOUT ALLEGI NG ANY FAILURE TO DISCLOSE FULL AND TRUE MATERIAL FACTS WAS LIABLE TO BE SET ASIDE. WHILE GR ANTING APPROVAL TO THE NOTICE IT WAS OBLIGATORY ON THE PART OF THE COMMISSIONER TO VERIF Y WHETHER THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULL AND TRUE RELEVANT FACTS IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT OF INCOME OF THAT ASSESSMENT YEAR. IT WA S ALSO OBLIGATORY ON THE PART OF THE COMMISSIONER TO CONSIDER WHETHER OR NOT POWER TO RE OPEN WAS BEING INVOKED WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR T O WHICH THE PROCEEDINGS RELATED. NONE OF THESE ASPECTS HAD BEEN CONSIDERED BY HIM. THE NOTIC ES AND CONSEQUENTLY THE ORDER JUSTIFYING REASONS RECORDED WERE UNSUSTAINABLE. IT IS SAID THAT THE PROVISO TO THE SECTION 147 WAS INCORPORATED TO PREVENT MISUSE OF RE-OPENING THE ASSESSMENTS BY THE AO.S AFTER PERIOD OF FOUR YE ARS.TAX LAWS ENVISAGE THAT COMPLETED ASSESSMENT SHOULD NOT BE DISTURBED WITHOUT SOLID RE ASONS.WE HOLD THAT THE PROVISO CASTS ONUS ON THE AO TO PROVE FAILURE OF THE ASSESSEE AND THAT IF THE AO FAILS TO DO SO,THEN ASSESSMENT PASSED BY HIM IN PURSUANCE OF RE-OPENING NOTICE,LOO SES LEGAL VALIDITY AND SANCTITY.AT THIS JUNCTURE, WE WOULD LIKE TO CONSIDER THE MATTER OF T ECUMSEH PRODUCTS INDIA PVT. LTD. (361 ITR 429)OF THE HONBLE AP HIGH COURT WHICH DEALS WITH I SSUE OF THE RE-OPENING OF ASSESSMENT AFTER EXPIRY OF PERIOD OF FOUR YEARS.THE HONBLE CO URT HAS HELD AS UNDER: BEFORE ANY NOTICE IS ISSUED AFTER THE EXPIRY OF FO UR YEARS, THE OFFICER CONCERNED MUST BE SATISFIED THAT THERE HAD BEEN AN ESCAPEMENT IN ASSE SSMENT OF INCOME, WHICH IS CHARGEABLE TO TAX AND THAT THIS IS BECAUSE OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OF THE INCOME-TAX ACT, 1961, OR IN RESP ONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 FOR NOT DISCLOSIN G THE MATERIAL FACTS.THESE CONDITIONS MUST BE REFLECTED IN THE NOTICE ITSELF. IN THE ABSENCE O F THE CONDITIONS, EXERCISE OF JURISDICTION IN ISSUANCE OF THE NOTICE UNDER THE PROVISION IS PATEN TLY ILLEGAL. SIMILARLY,IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD.(360ITR527)THE HONBLE GUJARAT HIGH COURT HAD ALSO DEALT WITH THE IDENTICAL ISSUE.IN TH AT MATTER THE ASSESSEE HAD CHALLENGED THE VALIDITY OF THE NOTICE ISSUE U/S.148 AFTER THE EXPI RY OF FOUR YEARS.DECIDING THE WRIT PETITION IN FAVOUR OF THE ASSESSEE,THE HONBLE COURT HELD AS FO LLOW: ...THERE WAS NOT EVEN A WHISPER TO THE EFFECT THAT INCOME HAD ESCAPED ASSESSMENT ON ACCOUNT OF ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCL OSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT.IN THE ABSENCE OF AN Y SATISFACTION HAVING BEEN RECORDED BY THE ASSESSING OFFICER THAT THE INCOME HAD ESCAPED B Y REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSUMPTION OF JURISDICTION UNDER SECTION 147 WAS NOT VALID AND, THEREFORE,NOTICE UNDER SECTION 148 COULD NOT BE SUSTAINED. 1486/06 & ORS/AFCONS(8APPLS) 4 FROM THE ABOVE DISCUSSION,IT IS CLEAR THAT WHERE TH E PROVISIONS OF SECTION 147 ARE BEING INVOKED AFTER THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IN ADDITION TO THE AO HAVING REASON TO BELIEVE THAT AN Y INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT, IT MUST ALSO BE ESTABLISHED AS A FACT T HAT SUCH ESCAPEMENT OF ASSESSMENT HAD BEEN OCCASIONED BY EITHER THE ASSESSEE FAILING TO MAKE A RETURN UNDER SECTION 139 EITHER, ETC., OR BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YE AR. UNDISPUTED FACTS OF THE PRESENT CASES ARE THAT THE ASSESSEE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT,THAT THE AO HAD NOT MENTIONED ,IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENTS,THAT BECAUSE OF THE FAILURE OF THE ASSESSEE TO DISCLOSE THE MATERIAL FACTS TRULY AND FULLY INCOME HAD ESCAPED ASSESSMENT.AS THE BASI C AND FIRST PRE-REQUISITE FOR ISSUING THE NOTICE IS NOT FULFILLED,SO,THE ASSESSMENT ORDERS PA SSED IN PURSUANCE OF SUCH NOTICES HAVE TO HELD TO BE INVALID.CONSIDERING THE FACTS AND CIRCUM STANCES OF BOTH THE CASES,WE ARE OF THE OPINION THAT THE ORDERS OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY. SO, UPHOLDING HIS ORDERS FOR BOTH THE YEARS I.E.1997-98 AND 1998-99,WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. 6. WE HAVE HELD THAT THE REASSESSMENTS FOR THE ABOVE M ENTIONED AY.S.ARE INVALID.SO,THE APPEALS FILED BY THE ASSESSEE FOR THE AY.S.1997-98 AND 1998-99 ARE NOT BEING ADJUDICATED TREATING THE SAME OF ACADEMIC NATURE. ITA/3251 & 3252/MUM/2006-AY.S.1999-00,2000-01 ASSES SEES APPEAL: ITA/3643 &3644/MUM/2006-AY.S 1999-00,2000-01 DEPART MENTS APPEAL: 7. WHILE DECIDING THE APPEALS FOR THE AY.S.1999-00AND 2000-01,THE FAA UPHELD THE RE- OPENING OF THE ASSESSMENTS FOR THOSE YEARS.HE HELD THAT THE AO HAD INITIATED THE RE- ASSESSMENT PROCEEDINGS WITHIN A PERIOD OF FOUR4 YRS FROM THE END OF THE RELEVANT AY, THAT THE PROVISO TO SECTION 147 OF THE ACT WAS NOT APPLICABL E, THAT THE AO HAD VALIDLY ISSUED NOTICES U/S. 148 OF THE ACT. HE FURTHER HELD THAT ASSESSEE WAS ENTITLED FOR DEDUCTION OF THE WHOLE LEASE RENT , THAT IT WAS ENTITLED FOR RELIEF FOR BOTH THE AY.S UNDER CONSIDERATION. 6. BEFORE US,THE AR ARGUED THAT WHILE RE-OPENING THE A SSESSMENTS THE AO HAD MENTIONED THE SAME REASONS THAT WERE RECORDED FOR THE EARLIER YEA RS,THAT IT WAS A CASE OF CHANGE OF OPINION,THAT WHILE ISSUING THE NOTICE FOR THE AY.19 99-2000 THE AO HAD MENTIONED THE LEASE RENTAL FIGURE OF 1997-98,THAT THE ASSESSEE HAD DISC LOSED ALL THE RELEVANT MATERIAL,THAT IT HAD GIVEN BREAK UP OF LEASE RENT,THAT THERE WAS NO ESCA PEMENT OF INCOME,THAT INTEREST COMPONENT AND DEPRECIATION WOULD BE MORE THAN THE PRINCIPAL C OMPONENT OF THE LEASE TRANSACTION.HE RELIED UPON THE CASE OF PRIMA PAPER AND ENGINEERI NG INDUSTRY(364 ITR 222).FOR THE AY. 2001-02, HE ADVANCED THE SIMILAR ARGUMENTS.HE FURTH ER STATED THAT TOTAL LEASE RENT(RS.12.71 CRORES)WAS LESS THAN DEPRECIATION (RS.12.89 CRORES) AND INTEREST(RS.3.55 CRORES) AMOUNT,THAT THERE WAS NO ESCAPEMENT OF INCOME FOR THAT YEAR ALS O. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT WHILE FILING THE RETURNS FOR BOTH THE AY.S.THE ASSESSEE H AD FURNISHED ALL THE DETAILS OF THE LEASE RENTALS IN THE COMPUTATIONS OF INCOME(PG.33 PB FOR AY.1999-00 AND PG.103 OF THE PB FOR AY.2000-01.)BESIDES,ACCOUNTING POLICY WITH REGARD T O THE RENTAL INCOME AND BREAKUP OF RENT WAS ALSO MADE AVAILABLE TO THE AO.S.(PG.41,111&129 OF THE PB.FOR AY.1999-2000).SIMILAR DETAILS WERE THERE FOR THE AY.2000-01.THUS,DURING T HE ORIGINAL ASSESSMENT PROCEEDINGS,THE ASSESSEE HAD SUPPLIED ALL THE NECESSARY DETAILS FOR BOTH THE AY.S.IN OTHER WORDS, ,NO NEW MATERIAL HAD COME IN POSSESSION OF THE AO TO DISTUR B THE COMPLETED ASSESSMENT.HE HAD CHANGED HIS OPINION ABOUT THE TREATMENT TO BE GIVEN RENTAL INCOME.IN OUR OPINION,IN ABSENCE 1486/06 & ORS/AFCONS(8APPLS) 5 OF SOME COGENT MATERIAL AO CANNOT INITIATE PROCEEDI NGS U/S.147 OF THE ACT.WE ALSO FIND THAT IF THE ORDER OF THE FAA WAS TO BE IMPLEMENTED THERE WOULD NOT BE ANY ESCAPEMENT OF INCOME FOR ANY OF THE YEARS.IN BOTH THE YEARS THE DEPRECIA TION AND INTEREST WOULD BE MORE THAN THE RENTAL INCOME,IF THE TRANSACTION WITH REGARD TO LEA SED ASSETS WAS TO BE TREATED FINANCIAL TRANSACTION.WITH REGARD TO THE ARGUMENT THAT THE AO HAD NOT FORMED ANY OPINION,AS HE HAD NOT DISCUSSED ANYTHING IN THE ASSESSMENT ORDER,WE W OULD LIKE TO MENTION THAT IN THE MATTER OF PRIMA PAPER AND ENGINEERING INDUSTRY(SUPRA)THE HON BLE JURISDICTIONAL HIGH COURT HAS HELD AS UNDER: IT IS WELL SETTLED THAT THE POWER TO REOPEN AN ASSE SSMENT IS NOT A POWER OF REVIEW AND MERE CHANGE OF OPINION WOULD NOT JUSTIFY REOPENING OF AN ASSESSMENT. THIS WOULD APPLY EVEN WHEN ASSESSMENT SOUGHT TO BE REOPENED IS WITHIN FOUR YEA RS FROM THE END OF THE ASSESSMENT YEAR. REVENUE DOES NOT DISPUTE THE FACT THAT THE ISSUE WI TH REGARD TO WHICH THE REOPENING IS SOUGHT TO BE DONE WAS THE SUBJECT MATTER OF DISCUSSION AND DELIBERATION BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL PROCEEDINGS LEADING TO THE ORDE R DATED 29 TH APRIL, 2003. IN THESE CIRCUMSTANCES, IT IS AN UNDISPUTED POSITION THAT TH E ASSESSING OFFICER DID HAVE OCCASION TO APPLY HIS MIND TO THE DEDUCTION CLAIMED BY THE RESP ONDENT-ASSESSEE BEFORE ALLOWING THE SAME. THE OBJECTION OF THE REVENUE THAT THERE WAS N O OPINION FORMED DURING THE ORIGINAL ASSESSMENT PROCEEDING AS THE ORDER DATED 29 TH APRIL, 2003 DID NOT DEAL WITH THE SAME IS UNSUSTAINABLE. THE MERE FACT THAT THE ASSESSMENT OR DER DOES NOT DISCUSS THE ISSUE OF DEDUCTION UNDER SECTION 80IA (4) OF THE ACT WOULD NOT LEAD TO THE CONCLUSION THAT THE ASSESSING OFFICER HAD MADE NO OPINION WITH REGARD TO THE ISSUE. THE T RIBUNAL HAS REACHED A FINDING OF FACT THAT QUESTION WITH REGARD TO CLAIM FOR DEDUCTION UNDER S ECTION 80IA OF THE ACT WAS RAISED BY THE ASSESSING OFFICER AND RESPONDED TOO BY THE RESPONDE NT-ASSESSEE. THIS POSITION IS ALSO NOT DISPUTED BY THE REVENUE.MERELY BECAUSE THE ISSUE IS NOT DISCUSSED IN THE ASSESSMENT ORDER WOULD NOT LEAD TO A CONCLUSION THAT NO OPINION WAS FORMED AS TO SUBJECT OF THE QUERY. CONSIDERING THE ABOVE,WE ARE OF THE OPINION THAT TH E RE-OPENING WAS NOT BASED ON VALID REASONS AND THERE WAS NO ESCAPEMENT OF INCOME FOR B OTH THE YEARS.AFTER DELIBERATING UPON THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASES,WE AR E REVERSING THE ORDERS OF THE FAA.EFFECTIVE GROUND OF APPEAL,FOR BOTH THE AY.S.AR E DECIDED IN FAVOUR OF THE ASSESSEE.AS THE RE-OPENING HAS BEEN TREATED INVALID FOR THESE Y EARS ALSO,SO,WE ARE NOT ADJUDICATING THE APPEALS OF THE AO.S.,AS,SAME TURN OUT TO BE ACADEMI C IN NATURE. AS A RESULT,APPEALS FILED BY THE AO FOR THE AY.1997 -98 AND 1998-99 ARE DISMISSED AND APPEALS OF THE ASSESSEE FOR THE AY.S.1999-00 AND 20 00-01 ARE ALLOWED. . .1997-98 1998-99 . .1999-00 2000-01 . ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH FEBRUARY, 2016. 12 , 2016 SD/- SD/- ( /RAM LAL NEGI) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 12.02. 2016 . . . .. . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 1486/06 & ORS/AFCONS(8APPLS) 6 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.