DCIT, Bangalore V. M/s Tayana Consult Pvt. Ltd., Bangalore

ITA 1566/BANG/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5257 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 08-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMESH KUMAR JT
• Keywords: Reopening of assessment; Capital asset; Search and seizure; Question of law; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 45(2); 143(3); 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.1566/BANG/2014 ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE. VS. M/S. TAYANA CONSULT PVT. LTD., NO.642, 4 TH MAIN, 2 ND STAGE, INDIRA NAGAR, BANGALORE 560 038. PAN: AABCG 8768P APPELLANT RESPONDENT APPELLANT BY : SHRI A. RAMESH KUMAR, JT.CIT(DR)(ITAT) RESPONDENT BY : SMT. SHEETAL BORKAR, ADVOCATE DATE OF HEARING : 15.06.2017 DATE OF PRONOUNCEMENT : 23.06.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1 . THE ORDER OF THE LD.CIT (A) IS OPPOSED TO TH E LAW AND FACTS OF THE CASE. 2. ON THE FACTS OF THE CASE AND ON LAW, THE LCL.CI T(A) ERRED IN HOLDING THAT THE REOPENING PROCEEDING INITIATED U/S 147 AS ITA NO.1566/BANG/2014 PAGE 2 OF 17 INVALID, WHEN THE SAME WAS INITIATED BASED ON THE C ONFIDENTIAL REPORT RECEIVED FROM THE INVESTIGATION WING, UNIT I I, BANGALORE. 3. ON THE FACTS OF THE CASE, THE LD. CIT(A) HAS ER RED IN NOT CONSIDERING THE FACT THAT THE RE-OPENING PROCEEDING WAS HELD AS VALID IN THE ASSESSEE'S OWN CASE FOR AY 2005-06 AND AY 2007- 08. 4. ON THE FACTS OF THE CASE AND ON LAW, THE LD.CIT (A) ERRED IN HOLDING THAT THE REOPENING PROCEEDING INITIATED U/S 147 IS CONFINED ONLY TO THE ISSUE RECORDED IN THE REASON F OR RE-OPENING THE ASSESSMENT, WHEN THE STATUE DOES NOT STIPULATE SO. 5. ON THE FACTS OF THE CASE AND ON LAW, THE LCL.CI T(A) ERRED IN DIRECTING THE DELETION OF ADDITION MADE ON ACCOU NT OF DISALLOWANCE OF SHORT CAPITAL LOSS, AS THE SAME WAS NOT THE SUBJECT MATTER OF RE-OPENING . 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT( A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND TH AT OF THE ASSESSING OFFICER MAY BE RESTORED. 7. THE APPELLANT CRAVES FOR PERMISSION TO ADD, MODI FY OR DELETE THE GROUNDS OF APPEAL MENTIONED ABOVE AT THE TIME OF HEARING THE CASE WITH A PRAYER TO RESTORE THE ORDER OF AO. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT REOPENING OF ASSESSMENT U/S. 147 WAS DONE AFTER FOUR YEARS FROM THE END OF IMPUGNED ASSE SSMENT YEAR. THE ASSESSMENT YEAR INVOLVED IS AY 2007-08, WHEREAS REO PENING WAS DONE VIDE NOTICE DATED 02.07.2012. THE LD COUNSEL FURTH ER INVITED OUR ATTENTION THAT THE AO HAS NOT RECORDED ANY SATISFACTION IN TH E REASONS RECORDED FOR REOPENING OF ASSESSMENT THAT INCOME HAS ESCAPED ASS ESSMENT BY REASON OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULL Y AND TRULY ALL MATERIAL FACTS ITA NO.1566/BANG/2014 PAGE 3 OF 17 NECESSARY FOR ITS ASSESSMENT FOR THE ASSESSMENT YEA R UNDER CONSIDERATION, THEREFORE ASSUMPTION OF JURISDICTION U/S. 147 OF TH E ACT IS NOT PROPER. THE LD. COUNSEL FURTHER PLACED RELIANCE UPON THE JUDGMENT O F HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. CHAITANYA PROPERTIES PVT. LTD. IN ITA NO.205/2015 DATED 16.02.2016 . 3. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T IT WAS NOT NECESSARY FOR THE AO TO RECORD A SATISFACTION IN TH IS REGARD, IF HE HAS RECORDED THE FACTS IN THE REASONS WHEREFROM INFEREN CE CAN BE DRAWN THAT INCOME HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE AO HAS NOT RECORDED SATISFACTION IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. FOR THE SAKE OF REFERENCE, WE EXTRACT THE REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT AS UNDER:- M/S. VECTRA CONSULTANCY PVT. LTD. (EARLIER CALLED AS VECTRA HOLDINGS PVT. LTD.) IS A CASE ASSESSED WITH DCIT, C IRCLE-12(5) OF THIS RANGE AND THIS OFFICER HAD RECENTLY COMPLETED ASSESSMENT 1I/S. 143(3) FOR AY 2009- 10. THE MAIN ISSUE THAT A ROSE IN THIS ASSESSMENT IS THE TRANSFER OF SHARES OF ITS SUBSIDI ARY CALLED M/S. JUPITER CAPITAL PVT. LTD. {JCPL). WHILE LONG TERM C APITAL LOSS OF RS. 4,38,86,718/- ON SALE OF THESE SHARES WAS SHOWN IN THE RETURN, THE ASSESSMENT WAS MADE BY COMPUTING LONG TERM CAPI TAL GAINS AT RS.235,82,14,413/-. AS PER THE DETAILS GATHERED DUR ING THE ASSESSMENT PROCEEDINGS IN. THE CASE OF M/S. VECTRA HOLDINGS PVT. ITA NO.1566/BANG/2014 PAGE 4 OF 17 LTD.(NOW CALLED AS VECTRA CONSULTANCY SERVICES PVT. LTD.), THIS COMPANY, DURING THE FINANCIAL YEAR 2005-06, HAD PUR CHASED 26,400 SHARES OF M/S. JCPL @, RS. 10/- PER SHARE. N O PREMIUM WHATSOEVER WAS PAID BY THIS COMPANY ON THESE SHARES IN THAT YEAR. HOWEVER, IN THE SAME YEAR, I.E., FY 2005-P6, M/S. JCPL ALLOTTED 5,20,565 SHARES, OF FACE VALUE RS.10/- EAC H, AT PREMIUM RS.4,990/- PER SHARE TO FIVE DIFFERENT COMPANIES. A MONG THEM, THE ABOVE ASSESSEE, M/S. TAYANA CONSULT PVT. LTD. H AD CONTRIBUTED TO THE SHARE CAPITAL OF JCPL IN THE FY 2005-06,IS AS UNDER:- ITA NO.1566/BANG/2014 PAGE 5 OF 17 ITA NO.1566/BANG/2014 PAGE 6 OF 17 5. THIS ASPECT WAS EXAMINED BY THE HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF CIT V. CHAITANYA PROPERTIES PVT. LTD. IN ITA NO.205 /2015 IN WHICH IT HAS BEEN CATEGORICALLY HELD THAT INITIATIO N OF REASSESSMENT PROCEEDINGS WILL HAVE TO BE HELD AS INVALID FOR THE REASON THAT REASONS RECORDED BY THE AO DID NOT SPELL OUT THAT ESCAPEMEN T OF INCOME WAS DUE TO ASSESSEE NOT FULLY AND TRULY DISCLOSING ALL MATERIA L FACTS NECESSARY FOR COMPLETION OF ASSESSMENT FOR THE RELEVANT ASSESSMEN T YEAR. THE RELEVANT OBSERVATIONS OF THE HON'BLE JURISDICTIONAL HIGH COU RT ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- 14.3 AS PER THE PROVISO TO SECTION 147 OF THE ACT, WHERE AN ASSESSMENT U/S. 143(3) OF THE ACT HAS BEEN MADE IN ANY ASSESSMENT YEAR AND IF AFTER EXPIRY OF FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, ACTION IS SOUGHT TO B E TAKEN U/S. 147 OF THE ACT, SUCH ACTION CAN BE ONLY IN CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH A SSESSMENT YEAR, BY REASON OF FAILURE ON THE PART OF THE ASSES SEE TO DISCLOSE ITA NO.1566/BANG/2014 PAGE 7 OF 17 TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THAT ASSESSMENT YEAR. HE DREW OUR ATTENTION TO THE REASONS RECORDED BY THE AO U/S. 147 OF THE ACT BEFORE ISSUE OF NOTICE U/S. 148 OF THE ACT AND SUBMITTED THAT IN THE REASONS SO RECORDED BY THE AO, THERE HAS BEEN NO ALLEGATION THAT THERE WAS ESCAPEMENT OF INCOME DUE TO FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT OF INCOME OF THE ASSESSEE FOR A.Y. 2002-03. 14.4 OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT AND ACIT V. HEWELETT PACKARD DIGITAL GLOBAL SOLUTIONS LTD., ITA NO.406 OF 2007, JUDGMENT DATED 19.09.2011, WHEREIN THE HONBL E KARNATAKA HIGH COURT AFTER MAKING A REFERENCE TO TH E DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUS TAN LEVER LTD. V. R.B. WADKAR (2004) 137 TAXMANN 479 (BOM) OB SERVED AS FOLLOWS:- 7. IT IS OBSERVED IN THE SAID JUDGMENT THAT THE REASON RECORDED BY THE ASSESSING OFFICER NO WHERE STATE TH AT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT OF THAT ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO DISCLOSE AND OPEN HIS MIND THRO UGH REASONS. HE HAS TO SPEAK THROUGH HIS REASONS. IT IS FOR THE ASSESSING OFFICER TO REACH THE CONCLUSION AS TO WHET HER THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THE CONCERNED ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HIM TO PUT HIS OPINION ON RECORD IN BLACK AND WHITE. THE REASO NS RECORDED SHOULD BE CLEAR AND UNAMBIGUOUS AND SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE, HIS MIND. THE REASONS ARE THE MANIFESTATI ON OF THE MIND OF THE ASSESSING OFFICER. THE REASONS RECOR DED SHOULD BE SELF-EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE GUESSING FOR THE REASONS. REASONS PROVIDE THE LINK BETWEEN CONCLUSION AND EVIDENCE. THE ORDER PAS SED BY THE ASSESSING AUTHORITY DID NOT STATE ANYWHERE THA T THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH E ASSESSMENT OF THAT YEAR. ALL THAT HAS BEEN STATED IN THE ORDER IS THAT THE ASSESSEE HAS APPENDED THE NOTE AN D AT NO POINT OF TIME, THE ASSESSEE HAS DISCLOSED AS TO THE NEXUS BETWEEN THE AMOUNT OF RS. 10,06,617/- AND THE 10A UN IT. ITA NO.1566/BANG/2014 PAGE 8 OF 17 THE DISCLOSURE HAS TO BE FULL AND TRUE. BOTH THE CR ITERIA HAVE TO BE MET. IN THE ASSESSEES CASE, BY FAILING TO BRING OUT THE NEXUS BETWEEN THE 10A UNIT AND THE INTEREST INCOME, THE ASSESSEE HAS NOT DISCHARGED ITS RESPONS IBILITY OF FURNISHING FULL DISCLOSURE OF FACTS. AS SET OUT A BOVE, THE NOTE CLEARLY SETS OUT THE INTEREST INCOME EARNED BY THE STP UNIT AND THE CLAIM OF THE ASSESSEE FOR EXEMPTION UN DER SECTION 10A. IT IS NOT THE REQUIREMENT OF LAW THAT F URTHER THE ASSESSEE SHOULD SHOW THE NEXUS BETWEEN THE AMOU NT CLAIMED AND 10A UNIT. WHEN HE HAS CATEGORICALLY STAT ED THAT THE INTEREST, WHICH IS EARNED FROM STP UNIT, I S ELIGIBLE FOR EXEMPTION UNDER SECTION 10A, EVEN THAT NEXUS IS MANIFEST. THE ASSESSING AUTHORITY HAS NOT PROPERLY APPLIED HIS MIND TOWARDS THE STATUTORY PROVISIONS A ND HAS NOT TAKEN INTO CONSIDERATION THAT THE ORIGINAL ASSE SSMENT PASSED UNDER SECTION 143(3) WHICH WAS ALSO REOPENED ONCE AND ADJUSTMENT WAS MADE. IT IS FOR THE SECOND TIME, HE WAS RAISING ALL THESE OBJECTIONS. WHEN ADMITTEDL Y THE SECOND REOPENING OF THE ASSESSMENT IS BEYOND FOUR Y EARS, UNDER LAW, IT IS BARRED BY TIME AND THE FINDINGS RE CORDED BY THE TRIBUNAL IS LEGAL AND VALID AND DOES NOT SUF FER FROM ANY LEGAL INFIRMITY. IN THAT VIEW OF THE MATTER, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N IN THESE APPEALS. ACCORDINGLY, THE APPEALS ARE DISMISS ED. 14.5 OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS IN DIA PVT. LTD. VS. DCIT, 360 ITR 527 (GUJ) WHEREIN THE HONBL E GUJARAT HIGH COURT HELD: IT IS REQUIRED TO BE NOTED THAT IN THE PRESENT CA SE NOTICE U/S 148 OF THE ACT HAD BEEN ISSUED ON 27/4/2011 IN RELATION TO THE ASSESSMENT YEAR 2005-06. HENCE, ADMITTEDLY THE SAME HAD BEEN ISSUED AFTER EXPIRY OF A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. UNDER THE CIRCUMSTANCES, IN LIGHT OF THE PROVISO TO SECTION 147 OF THE ACT, IN CASE, WHERE ASSESSMENT HAS BEEN FRAMED UNDER SECTION 143(3) OF THE ACT, NO ACTION CAN BE TAKEN UNDER SECTION 147, UNLES S INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT, FOR THE ASSESSMENT YEAR. THERE WAS NOT EVEN A WHISPER TO THE EFFECT THAT INCOME HAS ESCAPED ASSES SMENT ON ACCOUNT OF ANY FAILURE ON THE PART OF THE ASSESS EE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ITS ITA NO.1566/BANG/2014 PAGE 9 OF 17 ASSESSMENT. EVEN WHILE CONSIDERING THE OBJECTIONS R AISED BY THE ASSESSEE AND REPLYING TO THE ASSESSEE, THERE WAS NO SUCH CASE PLEADED ON BEHALF OF THE REVENUE EVEN IN THE AFFIDAVIT-IN-REPLY FILED, THERE WAS NO ALLEGATION OF ANY SUCH FAILURE ON THE PART OF THE ASSESSEE. THE AO WAS NOT IN A POSITION TO SATISFY THE COURT WITH RESPECT TO COMPL IANCE / SATISFACTION OF THE REQUIREMENT OF THE PROVISO TO S ECTION 147 OF THE ACT. UNDER THE CIRCUMSTANCES, IT WAS APPA RENT THAT THE REQUIREMENT OF THE PROVISO TO SECTION 147 WAS NOT SATISFIED. SECONDLY, IN ABSENCE OF ANY SATISFACTION HAVING BEEN RECORDED BY THE ASSESSING OFFICER THAT THE INCOME HAS ESCAPED BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT WAS FAILURE AND THEREFORE, THE IMPUGNED NOTICE U/S 147 OF THE ACT, CANNOT BE SUSTAINED . IDENTICAL QUESTION CAME TO BE CONSIDERED BY THE DIVISION BENCH OF THIS COURT IN THE CASE OF KAN AK FABRICS VS. INCOME TAX OFFICER IN SPECIAL CIVIL APPL ICATION NO. 335 OF 2001 AND IN ABSENCE OF ANY SUCH SATISFAC TION BY THE ASSESSING OFFICER, THE DIVISION BENCH OF THIS CO URT HAS QUASHED AND SET ASIDE THE NOTICE OF REASSESSMENT U/ S 148. IN VIEW OF THE ABOVE AND FOR THE REASONS STATED ABO VE NOTICE OF REASSESSMENT U/S 148 QUASHED AND SET ASID E. (EMPHASIS SUPPLIED) 14.6 IT WAS THUS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT REOPENING OF THE ASSESSMENT SHOULD BE HELD TO BE BAD IN LAW, AS THE AO IN THE PRESENT CASE HAS NOT RECOR DED SPECIFICALLY THAT ESCAPEMENT OF INCOME WAS DUE TO T HE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE A.Y. 2005-06. IT WAS ALSO SUBMITTED THAT FACTUALLY THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY OF HIS ASSESSMENT FOR AY 05-06. IN THIS REGARD OUR ATTENTION WAS DRAWN TO THE FACT THAT ALL FACTS RELATING TO THE JOINT DEVELOPMENT AGREEMENT B ETWEEN THE ASSESSEE AND PEPL HAD BE DULY DISCLOSED AND EVE N CONSIDERED BY THE AO WHILE CONCLUDING THE ORIGINAL ASSESSMENT PROCEEDINGS. IT WAS EMPHASIZED THAT NO N EW MATERIAL WHATSOEVER HAS BEEN REFERRED TO IN THE REASONS RECORDED. ITA NO.1566/BANG/2014 PAGE 10 OF 17 15. THE LD. DR, ON THE OTHER HAND SUBMITTED THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TR ULY DISCLOSE MATERIAL FACTS AND IN THIS REGARD DREW OUR ATTENTIO N TO PARA-19 OF THE REASONS RECORDED WHEREIN THE AO HAS RECORDED TH E FACT THAT THE ASSESSEE HAS NOT FILED ANY INFORMATION TO THE E FFECT THAT THERE WAS INCIDENCE OF CAPITAL GAIN U/S. 45(2) OF THE ACT , AS PER THE RETURN OF INCOME. FURTHER REFERENCE WAS ALSO MADE T O EXPLN.1 TO SEC.147 OF THE ACT WHICH LAYS DOWN THAT MERELY FILI NG OF DOCUMENTS BEFORE AO FROM WHICH FACTS REGARDING ESCA PEMENT OF INCOME COULD BE GATHERED, WILL NOT NECESSARILY AMOU NT TO DISCLOSURE OF ALL FACTS BY AN ASSESSEE. FURTHER REFERENCE WAS MADE TO THE FACT THAT WHILE C OMPLETING THE ORIGINAL ASSESSMENT U/S.143(3) OF THE ACT THERE WAS NO DISCUSSION REGARDING APPLICABILITY OF SEC.45(2) OF THE ACT. R ELIANCE WAS PLACED ON PAGE-10 AND 11 OF THE CIT(A)S ORDER WHER EIN THE CIT(A) HAS UPHELD THE ACTION OF THE AO IN INITIATIN G PROCEEDINGS U/S.147 OF THE ACT. 16. THE LD. COUNSEL FOR THE ASSESSEE, IN REJOIND ER, POINTED OUT TO EXPLANATION 1 TO SECTION 147 OF THE ACT, WHICH READ S AS UNDER:- EXPLANATION 1. PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. 17. ACCORDING TO HIM, EXPLANATION 1 TO SECTION 147 WILL NOT BE APPLICABLE IN THE PRESENT CASE BECAUSE EXPLANATION ONLY LAYS DOWN THAT PRODUCTION BEFORE THE AO OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DU E DILIGENCE HAVE BEEN DISCOVERED BY THE AO WILL NOT NECESSARIL Y AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROV ISO. THE EXPRESSION WILL NOT NECESSARILY MEAN FOUND IN EXPLN.-1 AS ABOVE, WILL ONLY MEAN THAT ONE HAS TO LOOK INTO THE FACTS AND CIRCUMSTANCES OF THE GIVEN CASE TO COME TO A CONCLU SION, WHETHER THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO FU LLY AND TRULY DISCLOSE ALL NECESSARY FACTS FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. THE FACT THAT THE ASSESSEE FILED ALL DOCUMENT S AND ACCOUNTS AND OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COU LD WITH DILIGENCE HAVE BEEN DISCOVERED BY THE AO, WILL NOT BE CONCLUSIVE ITA NO.1566/BANG/2014 PAGE 11 OF 17 IN THE MATTER. ACCORDING TO HIM, ELABORATE DISCUSSI ON IN THE ORDER OF AO WHILE COMPLETING THE ORIGINAL ASSESSMENT WILL CLEARLY SHOW THAT THERE WAS A COMPLETE DISCLOSURE BY THE ASSESSE E OF ALL MATERIAL FACTS. ACCORDING TO HIM, THERE IS NOTHING BROUGHT ON RECORD TO SHOW THAT THERE WAS FAILURE ON THE PART O F ASSESSEE AS CONTEMPLATED BY THE PROVISO TO SECTION 147. PRIMARY FACTS HAVE BEEN DISCLOSED BY THE ASSESSEE AND THE LEGAL INFERE NCES TO BE DRAWN FROM SUCH PRIMARY FACTS LIES IN THE DOMAIN OF THE AO. THE ASSESSEE CANNOT THEREFORE BE SAID TO HAVE FAILED TO DISCLOSE FULLY AND TRULY MATERIAL FACTS. IN THIS REGARD, IT WAS SU BMITTED BY HIM THAT REASONS RECORDED ONLY MENTION THE FACT THAT AS SESSEE HAS NOT FILED ANY INFORMATION REGARDING CAPITAL GAINS U/S. 45(2) OF THE ACT IN THE RETURN OF INCOME FILED. ACCORDING TO HIM, TH IS ALLEGATION CANNOT TANTAMOUNT TO AN ALLEGATION BY THE AO THAT A SSESSEE HAS FAILED TO FULLY AND TRULY DISCLOSE ALL MATERIAL FAC TS. 18. ON THE REOPENING OF ASSESSMENT BEING MERELY O N A CHANGE OF OPINION, THE LEARNED COUNSEL FOR THE ASSESSEE SU BMITTED THAT WHILE COMPLETING THE ORIGINAL ASSESSMENT THE AO WAS FULLY AWARE OF THE FACT THAT THE LAND AT WHITEFIELD WAS CONVERT ED INTO STOCK IN TRADE DURING THE PREVIOUS YEAR RELEVANT TO AY 05-05 AND THE FACT THAT THE SAID PROPERTY WAS SUBJECT MATTER OF A JOIN T DEVELOPMENT AGREEMENT WITH PRESTIGE ESTATES AND PROPERTIES LTD. IT WAS HIS CONTENTION THAT THE AO WHILE COMPLETING THE ASSESSM ENT DID NOT DEEM IT PROPER TO CONSIDER THE ACT OF THE ASSESSEE ENTERING INTO A DEVELOPMENT AGREEMENT IN RESPECT OF THE PROPERTY AS RESULTING TO A TRANSFER GIVING RAISE TO CHARGE OF CAPITAL GAIN U /S.45(2) OF THE ACT. IT WAS POINTED OUT BY HIM THAT IN THE REASONS RECORDED THE AO HAS NOT REFERRED TO ANY MATERIAL WHICH HAD COME INTO HIS POSSESSION SUBSEQUENT TO THE PASSING OF THE ORDER U /S.143(3) OF THE ACT BASED ON WHICH HE ENTERTAINED BELIEF THAT D EVELOPMENT AGREEMENT RESULTED IN A TRANSFER AND THEREBY PROVIS IONS OF SEC.45(2) OF THE ACT BECAME APPLICABLE. THERE BEING NO MATERIAL WHICH HAS COME TO THE POSSESSION OF THE AO SINCE TH E CONCLUSION OF THE ORIGINAL ASSESSMENT PROCEEDINGS, IT WAS NOT POSSIBLE FOR THE AO TO CHANGE OR FORM A DIFFERENT OPINION ON THE SAM E SET OF FACTS AND RESORT TO REOPENING OF A COMPLETED ASSESSMENT. ACCORDING TO HIM, DOING SO WILL RESULT IN THE AO REVIEWING HIS O WN ORDER WHICH IS NOT LEGALLY PERMISSIBLE. ACCORDING TO HIM EVEN ASSUMING THAT THERE WAS A FAILURE ON THE PART OF TH E AO IN THIS REGARD, THE APPROPRIATE ACTION CAN ONLY BE UNDER SE CTION 263 OF THE ACT. IT WAS HIS SUBMISSION THAT THE LAW IS WELL SETTLED THAT TO ASSUME JURISDICTION U/S. 147 OF THE ACT, THERE SHOU LD BE REASON TO ITA NO.1566/BANG/2014 PAGE 12 OF 17 BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED A SSESSMENT. SUCH REASON TO BELIEVE CANNOT BE ON A MERE CHANGE O F OPINION. THIS POSITION IS WELL SETTLED BY THE DECISION OF TH E HONBLE SUPREME COURT IN THE CASE OF CIT V. KELVINATOR OF I NDIA LTD., 320 ITR 561 (SC). ATTENTION WAS ALSO DRAWN TO A DECISIO N OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. HARDWARE TRADING CO., 248 ITR 673 (KARN) LAYING DOWN IDENTIC AL PROPOSITION. 19. THE LD. DR SUBMITTED THAT IN THE ORIGINAL ORDE R OF ASSESSMENT, THE AO HAD NOT MADE ANY DISCUSSION WITH REGARD TO APPLICABILITY OF SECTION 45(2) OF THE ACT AND THERE FORE IT CANNOT BE SAID THAT THERE WAS ANY EXPRESSION OF OPINION IN TH E ORDER ORIGINALLY PASSED U/S.143(3). IT WAS HIS SUBMISSION THAT THERE CANNOT BE ANY CHANGE OF OPINION IN THE GIVEN CIRCUM STANCES. 20. WITH REGARD TO THE CONTENTION OF THE LD. DR RE GARDING CHANGE OF OPINION, LD. COUNSEL FOR THE ASSESSEE BRO UGHT TO OUR NOTICE THE FOLLOWING OBSERVATIONS OF THE HONBLE SU PREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD.:- ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE TO S. 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX LAWS(AMENDMENT) ACT, 1987, REOPENING COULD BE DONE UNDER ABOVE TWO CONDITIONS AND FULFILLMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE AO TO MAKE A BACK ASSESSMENT, BUT IN S.147 OF THE ACT (W.E .F. 1ST APRIL, 1989), THEY ARE GIVEN A GO BY AND ONLY ONE CO NDITION HAS REMAINED, VIZ., THAT WHERE THE AO HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. THEREFORE, P OST 1ST APRIL, 1989, POWER TO REOPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WOR DS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFRAID, S . 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. WE MUST AL SO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWE R TO REVIEW AND POWER TO REASSESS. THE AO HAS NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS. BUT REASSESSM ENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN PRE-CONDI TION AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED, A S CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLAC E. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' A S AN ITA NO.1566/BANG/2014 PAGE 13 OF 17 IN-BUILT TEST TO CHECK ABUSE OF POWER BY THE AO. HEN CE, AFTER 1ST APRIL, 1989, AO HAS POWER TO REOPEN, PROVID ED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUS ION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REAS ONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BEL IEF. HE LAID EMPHASIS ON THE FACT THAT THERE WAS ABSEN CE OF TANGIBLE MATERIAL IN POSSESSION OF THE AO TO COME T O CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT . ACCORDING TO HIM, THE PRESENT ACTION OF THE AO IS C LEARLY A CASE OF RESORT TO REASSESSMENT PROCEEDINGS MERELY ON CHA NGE OF OPINION. 21. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. AS WE HAVE ALREADY SEEN THE ASSESSEE HELD THE WHITEFIELD PROPERTY AS INVESTMENT AND CONVERTED THE SAME AS STOCK-IN-TRADE OF BUSINESS DURING THE PREVIOUS YEAR RELEVANT TO AY 05-06. THIS FACT HAS ALSO BEEN RECORDED BY THE A O IN THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE ACT. S EC.45(2) OF THE ACT PROVIDES THAT THE PROFITS OR GAINS ARISING FROM THE TRANSFER BY WAY OF CONVERSION BY THE OWNER OF A CAPITAL ASSET I NTO, OR ITS TREATMENT BY HIM AS STOCK-IN-TRADE OF A BUSINESS CA RRIED 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. THE TAXABLE EVENT FOR APPLICATI ON OF SEC.45(2) OF THE ACT IS CONVERSION OF CAPITAL ASSET INTO STOC K-IN-TRADE OF BUSINESS. THE POINT OF TIME AT WHICH TAX IS LEVIED IS THE YEAR IN WHICH THE STOCK-IN-TRADE IS SOLD. WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT, THE AO DID NOT THINK IT FIT TO INVOKE PROVISIONS OF SEC.45(2) OF THE ACT EITHER BE CAUSE HE OVERLOOKED THE APPLICABILITY OF THOSE PROVISIONS OR BECAUSE HE THOUGHT THAT THE POINT OF TIME AT WHICH TAX IS TO B E LEVIED U/S.45(2) OF THE ACT, VIZ., SALE OF THE STOCK-IN-TR ADE HAD NOT OCCURRED DURING THE PREVIOUS YEAR. IT IS CLEAR FROM A PERUSAL OF THE ORDER U/S. 143(3) OF THE ACT DATED 31.12.2007 THAT AO WAS FULLY AWARE OF THE FACT THAT PROPERTY AT WHITEFIELD WHICH WAS HELD AS INVESTMENT GOT CONVERTED INTO STOCK-IN-TRADE DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06. IT IS ALSO CLEAR FRO M THE ORDER U/S. 143(3) OF THE ACT THAT AO WAS FULLY CONSCIOUS OF TH E FACT THAT PROPERTY AT WHITEFIELD HAVING BEEN GIVEN UNDER JOIN T DEVELOPMENT AGREEMENT TO PEPL ON5.2.2005. IN THE SA ID ASSESSMENT ORDER, THE AO DESPITE KNOWING THE FACT T HAT PROPERTY ITA NO.1566/BANG/2014 PAGE 14 OF 17 AT WHITEFIELD WAS STOCK-IN-TRADE OF THE BUSINESS OF THE ASSESSEE AND THAT IT WAS SUBJECT MATTER OF JOINT DEVELOPMENT AGREEMENT, BY WHICH PROPERTY WAS TO BE DEVELOPED AS A RESIDENTIAL COMPLEX, DID NOT CONSIDER THE JDA DATED 5.2.2005 AS GIVING RISE TO A TRANSFER WITHIN THE MEANING OF SECTION 45(2) OF THE ACT. IN THE REASONS RECORDED BY THE AO BEFORE ISSUE OF NOTICE U/S. 148 OF THE ACT, THE AO HAS COME TO THE CONCLUSION THAT BY VIRTUE OF JDA DATED 5.2.2005, THERE WAS A TRANSFER OF THE CAPITAL ASSET GIVING RISE TO CAPITAL GAINS U/S. 45(2) OF THE ACT. IN THIS REGARD , THE AO HAS RELIED ON TWO IMPORTANT FACTORS VIZ., (I) ASSESSEE HAS EXECUTED POA IN FAVOUR OF DEVELOPER AND THE FACT THAT ASSESS EE RECEIVED REFUNDABLE AND NONREFUNDABLE DEPOSITS UNDER THE JDA , AND (II) THE FACT THAT SEVERAL COURTS HAVE HELD THAT CAPITAL GAINS IS LIABLE TO TAX ON ACCOUNT OF JDA ENTERED INTO BY THE LAND OWNE RS WITH THE BUILDER ON HANDING OVER OF THE POSSESSION OF THE PR OPERTY FOR JOINT DEVELOPMENT. IN COMING TO THE AFORESAID CONCLUSION, THE AO HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE BOMB AY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA V . CIT, 260 ITR 491 (BOM) RENDERED ON 13.2.2007, WHICH WAS MUCH BEFORE WHEN THE AO CONCLUDED THE ORIGINAL ASSESSMENT PROCE EDINGS U/S. 143(3) OF THE ACT ON 31.12.2007. THE OTHER DECISION REFERRED TO BY THE AO IN THE REASONS RECORDED IS CIT V. T.K. DA YALU, 202 TAXMAN 531. THIS DECISION WAS RENDERED ON 20.6.2011 , AFTER THE CONCLUSION OF THE ORIGINAL ASSESSMENT PROCEEDINGS. THE DECISION RENDERED SUBSEQUENT TO THE ORIGINAL ASSESSMENT PROC EEDINGS WILL NOT MEAN THAT ASSESSEE DID NOT FULLY AND TRULY DISC LOSE MATERIAL FACTS. IF REASSESSMENT PROCEEDINGS ARE INITIATED ON THE BASIS OF A SUBSEQUENT JUDICIAL DECISION, THEN THAT WOULD ALSO BE A CASE OF CHANGE OF OPINION, AS WAS HELD BY THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF SESA GOA LTD. V. JCIT, 294 ITR 101 (BOM) ON WHICH RELIANCE WAS PLACED BY LD. COUNSEL FOR THE ASSESSEE. 22. IN THE PRESENT CASE, THE FACTS ON RECORD AND R EASONS RECORDED CLEARLY SHOW THAT ALL FACTS WERE AVAILABLE BEFORE THE AO WHEN HE COMPLETED THE ORIGINAL ASSESSMENT PROCEEDIN GS U/S. 143(3) OF THE ACT. THERE IS NO TANGIBLE MATERIAL WH ICH HAS COME TO THE POSSESSION OF THE AO JUSTIFYING INITIATION O F REASSESSMENT PROCEEDINGS. ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE VIEW THAT INITIATION OF REASSESSMENT PROCEEDINGS HAS BEEN MERELY ON THE BASIS OF CHANGE OF OPINION AND I N VIEW OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE C ASE OF KELVINATOR OF INDIA LTD. (SUPRA), INITIATION OF REA SSESSMENT PROCEEDINGS HAS TO BE HELD AS NOT PROPER. ITA NO.1566/BANG/2014 PAGE 15 OF 17 23. WE ARE ALSO OF THE VIEW THAT INITIATION OF REAS SESSMENT PROCEEDINGS WILL HAVE TO BE HELD AS INVALID FOR THE REASON THAT REASONS RECORDED BY THE AO DO NOT SPELL OUT THAT ES CAPEMENT OF INCOME WAS DUE TO THE ASSESSEE NOT FULLY AND TRULY DISCLOSING ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF ASSESSME NT FOR THE RELEVANT ASSESSMENT YEAR. IN THIS REGARD, WE ARE AL SO OF THE VIEW THAT ALLEGATIONS IN PARA 19 OF THE REASONS RECORDED DO NOT SPELL OUT THE BELIEF THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS. IN FAC T, THE ASSESSEE HAD DISCLOSED ALL FACTS IN THE ORIGINAL ASSESSMENT PROC EEDINGS U/S. 143(3) OF THE ACT. 24. WITH REGARD TO RELIANCE PLACED BY THE LD. DR ON EXPLANATION TO SECTION 147, WE ARE OF THE VIEW THAT EXPLANATION 1 ONLY LAYS DOWN THAT FACTS AND CIRCUMSTANCES OF EACH CASE WILL HAVE TO BE LOOKED INTO TO ASCERTAIN AS TO WHETHER THERE WAS FA ILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE MATERIA L FACTS. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESS EE, THE EXPRESSION WILL NOT NECESSARILY IN EXPLANATION 1 WILL ONLY MEAN THAT FACTS AND CIRCUMSTANCES OF EACH CASE WILL HAVE TO BE SEEN AS TO WHETHER PRODUCTION OF BOOKS OF ACCOUNT AND OTHER EVIDENCE BEFORE THE AO WILL AMOUNT TO FULL AND TRUE DISCLOSU RE OF MATERIAL FACTS. IN THE PRESENT CASE, AS WE HAVE ALREADY SEEN , EVIDENCE WAS PRODUCED BEFORE THE AO IN THE COURSE OF THE ORIGINA L ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT AND THE SAME WAS PERUSED BY THE AO AND HE HAD NOT CHOSEN TO DRAW ANY CONCLUSION THAT THERE WAS A TRANSFER BY THE ASSESSEE TO PEPL. THE FACT TH AT ASSESSEE WAS FOLLOWING COMPLETION METHOD OF ACCOUNTING FOR INCOM E FROM THE JDA, HAS ALSO BEEN ACKNOWLEDGED BY THE AO. IN THE G IVEN CIRCUMSTANCES, WE ARE OF THE VIEW THAT EXPLANATION 1 CANNOT BE RESORTED TO BY THE REVENUE. EXPLANATION-1 TO SEC.14 7 CANNOT BE READ IN A MANNER SO AS TO OVERRIDE PROVISO TO SEC.1 47 OF THE ACT. 25. BEFORE US, THE LD. DR HAD PLACED RELIANCE ON THE ORDER OF THE CIT(APPEALS) ON THE ISSUE OF VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. IN OUR VIEW, THE LD. CIT(APPEALS) HAS MERELY PROCEEDED ON THE BASIS THAT INCOME ARISES ON EXECUT ING JOINT DEVELOPMENT AGREEMENT TO THE ASSESSEE. HE HAS NOT A DDRESSED THE ISSUE WITH REGARD TO APPLICABILITY OF PROVISO TO SE CTION 147 OF THE ACT OR THE QUESTION WHETHER REASSESSMENT PROCEEDING S WERE INITIATED MERELY ON CHANGE OF OPINION. ITA NO.1566/BANG/2014 PAGE 16 OF 17 26. WE ARE, THEREFORE, OF THE VIEW THAT IN THE GIV EN FACTS AND CIRCUMSTANCES OF THE CASE, INITIATION OF REASSESSME NT PROCEEDINGS U/S 147 OF THE ACT IS HELD TO BE ILLEGAL AND CONSEQ UENTLY, ORDER PASSED U/S. 147 OF THE ACT IS CANCELLED ON THIS GRO UND. 4. AS SUCH, WHETHER IT WAS A CASE OF CHANGE OF OPIN ION OR THE NON- DISCLOSURE OF TRUE AND CORRECT FACTS, IF CONSIDERED IN LIGHT OF THE REPORT, ONE MAY SAY THAT SUCH MAY FALL IN THE ARENA OF QUESTION OF FACT WHICH MAY INCLUDE THE CONSIDERATION OF THE EAR LIER PROCEEDINGS OF THE ASSESSMENT. THE TRIBUNAL HAVING FOUND THAT T HE RELEVANT MATERIAL INCLUDING THAT OF TRANSFER BY THE ASSESSEE TO PEPL WAS ON RECORD AND THEREFORE IT WAS NOT A CASE WHERE THERE WAS NON- DISCLOSURE OF TRUE AND CORRECT FACTS. THE AFORESAID FINDING, IN OUR VIEW, COULD BE SAID TO BE RATHER PERTAINING TO THE QUESTIONS OF FACT TO BE EXAMINED ON THE BASIS OF THE MATERIAL ON RECORD WHICH WOULD FALL OUTSIDE THE JUDICIAL SCRUTINY IN THE PRESENT APPEAL . 5. ON THE QUESTIONS OF LAW, THE TRIBUNAL HAS GONE BY THE DECISION OF THE APEX COURT IN CASE OF COMMISSIONER OF INCOME TAX VS. KELVINATOR OF INDIA LTD., REPORTED AT (2010) 320 IT R 561 IN ADDITION TO OTHER DECISIONS OF KARNATAKA HIGH COURT. IN OUR VIEW, IF THE TRIBUNAL HAS TAKEN THE VIEW BASED ON THE DECISION O F THE APEX COURT AND ALSO OF THE JURISDICTIONAL HIGH COURT I.E., HIG H COURT OF KARNATAKA, WE DO NOT FIND THAT ANY SUBSTANTIAL QUES TIONS OF LAW WOULD ARISE FOR CONSIDERATION, AS SOUGHT TO BE CANV ASSED. 6. IN THE LIGHT OF THE AFORESAID JUDGMENT OF THE HO N'BLE JURISDICTIONAL HIGH COURT, WE ARE OF THE VIEW THAT THE IMPUGNED IS SUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID JUDGMENT . WE, THEREFORE, FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONA L HIGH COURT, HOLD THAT REOPENING OF ASSESSMENT IS INVALID. ACCORDINGLY, A SSESSMENT FRAMED CONSEQUENT THERETO DESERVES TO BE QUASHED. WE ACCO RDINGLY CONFIRM THE ORDER OF CIT(APPEALS). SINCE THE ASSESSMENT IS KNOC KED DOWN, WE FIND NO JUSTIFICATION TO DEAL WITH THE ISSUES ON MERIT. ITA NO.1566/BANG/2014 PAGE 17 OF 17 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF JUNE, 2017. SD/- SD/- ( A.K. GARODIA) (SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDI CIAL MEMBER BANGALORE, DATED, THE 23 RD JUNE, 2017. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.