DCIT, New Delhi V. M/s. Choice Clothing Co. Pvt. Ltd., New Delhi

ITA 1848/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3685 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 15-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: V K AGARWAL
• Keywords: Business income; Depreciation; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 80HHC; 147; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A. NO.1848/DEL/2011 ASSESSMENT YEAR : 2004-05 DY. C.I.T., VS. M/S CHOICE CLOTHING CO. PVT. LTD . CIRCLE 3(1), 3/36, IIND FLOOR, SHANTI NIKETAN, NEW DELHI NEW DELHI PAN NO.AAACC 3273E (APPELLANT) (RESPONDENT) APPELLANT BY : MS. Y. KAKKAR, SR. DR RESPONDENT BY : SHRI V.K. AGARWAL, CA ORDER PER K.G. BANSAL,AM: THE ONLY SUBSTANTIVE GROUND TAKEN BY THE REVENUE IN T HIS APPEAL IS TO THE EFFECT THAT THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN ANNULLING THE ORDER OF ASSESSMENT PASSED BY THE ASSESSING OFF ICER U/S 143(3) READ WITH SECTION 147 OF THE INCOME-TAX ACT, 1961, IGNORING THE FACT THAT MERE DISCLOSURE OF THE TRANSACTION AT THE TI ME OF MAKING ORIGINAL ASSESSMENT CANNOT BE SAID TO BE FULL AND TRUE D ISCLOSURE OF FACT WHERE ON THE BASIS OF SUBSEQUENT INFORMATION THE TRANSAC TION IS FOUND TO BE BOGUS. 2. THE FACTS OF THE CASE ARE THAT THE RETURN WAS FILED ON 01.11.2004 DECLARING TOTAL INCOME OF `2,82,27,863/-. THE ASSESSME NT WAS COMPLETED U/S 143(3)ON 29.09.2006 AT TOTAL INCOME OF `2,90,00,340/-. THEREAFTER, THE ASSESSING OFFICER RECORDED A NOTE ON TH E BASIS OF WHICH HE CAME TO THE CONCLUSION THAT HE HAD REASON TO BELIE VE THAT INCOME ON ACCOUNT OF THREE ISSUES ESCAPED ASSESSMENT. THEREFORE, NOTICE U/S 2 148 WAS ISSUED ON 17.06.2008. AFTER HEARING THE ASSESSEE, THE INCOME WAS DETERMINED AT `3,05,24,038/- ON 23.11.2009 IN TH E ORDER PASSED U/S 143(3) READ WITH SECTION 147. THE LEARNED CIT(A) ANNULLED THIS ORDER BY INTER ALIA MENTIONING THAT THE ASSESSMENT WAS R EOPENED BY USING THE SAME MATERIAL, WHICH WAS AVAILABLE BEFORE TH E ASSESSING OFFICER AT THE TIME OF MAKING ORIGINAL ASSESSMENT. AGG RIEVED BY THIS ORDER, THE REVENUE IS IN APPEAL BEFORE US. 3. THE LEARNED DR REFERRED TO THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT, WHICH READ AS UNDER:- RETURN DECLARING AN INCOME OF RS. 28727863/- WAS1F ILED ON 01-11-04. THE SAME WAS PROCESSED U/S 143(1) OF THE IT ACT 196 1 ON 11-08-05 AT THE RETURNED INCOME. THE CASE WAS SELECTED FOR SCRUTINY AND ORDER U/S 143(3) WAS PASSED ON 29/09/2006 AT AN ASSESSED INCOME OF R S. 29000340/-. THE PERUSAL OF THE RECORD REVEALS THE FOLLOWING. FI RSTLY, THE AO HAD MADE AN ADDITION OF RS 11040/- ON A/C OF COMPUTER & COMP UTER ACCESSORIES DURING THE YEAR UNDER CONSIDERATION. WHILE MAKING A SSESSMENT, AO HAD RESTRICTED THE DEPRECIATION ON COMPUTER ACCESSORIES FOR RS. 3 I 542/- @ 25% INSTEAD OF 60% AND MADE AN ADDITION OF RS. 1104 0/-. DEPRECIATION ON THESE ASSETS @25% IS ADMISSIBLE TO THE TUNE OF RS. 245485/- AS AGAINST RS. 561923 (572963-11040 BEING ALREADY DISALLOWED). HEN CE, EXCESS DEPRECIATION OF RS. 316938/- WAS ALLOWED TO THE ASS ESSEE. FURTHER, PERUSAL OF ASSTT. RECORD REVEALS THAT ASSE SSEE HAD CREDITED A SUM OF RS 1123109/- UNDER THE HEAD MISC. INCOME BUT WHILE CALCULATING DEDUCTION U/S 80HHC 90% OF THIS INCOME WAS NOT REDUCED FROM T HE TAXABLE PROFITS. HENCE EXCESS DEDUCTION U/S 80HHC WAS ALLOWED TO THE ASSESSEE TO THE TUNE OF RS 302889/-. FURTHER, AS PER TDS CERTIFICATES INTEREST INCOME WO RKED OUT AT RS 795641/- . WHEREAS THE SAME HAS BEEN CREDITED IN PROFIT & LO SS ACCOUNT AT RS 610727/-. AS PER PROVISION OF SECTION 199, CREDIT T O TDS IS ALLOWED ONLY TO THE EXTENT OF ASSESSABLE INCOME DECLARED BY THE ASSESSEE. SINCE THE ASSESSEE HAD DECLARED INTEREST INCOME OF RS 610727/ -, CREDIT FOR TDS ON BALANCE INCOME SHOULD BE WITHDRAWN. 3 PERUSAL OF BALANCE SHEET REVEALS THAT A SUM OF RS 4 4246595/- WAS APPEARING UNDER THE HEAD SUNDRY DEBTORS. IT IS ALSO NOTED THAT FOR CLAIMING DEDUCTION U/S 80HHC, INCOME IN FOREIGN EXCHANGE SHO ULD BE REMITTED IN INDIA WITHIN SIX MONTHS FROM THE END OF THE FINANCI AL YEAR. IN THE ABSENCE OF FOREIGN EXCHANGE REMITTANCE CERTIFICATE, IT COUL D NOT BE VERIFIED THAT REMITTANCE HAS BEEN BROUGHT IN INDIA WITHIN STIPULA TED PERIOD AND ASSESSEE HAD WRONGLY CLAIMED DEDUCTION U/S 80HHC. IN VIEW OF ABOVE FACTS OF THE CASE AND THE PROVISIO NS OF THE ACT IN THIS REGARD, I HAVE REASONS TO BELIEVE THAT INCOME ON AB OVE ACCOUNTS HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISIONS OF SECTION 147 AND NOTICE U/S 148 IS HEREBY ISSUED. 3.1 IT WAS SUBMITTED THAT THE ASSESSEE WAS ALLOWED DEDUCTI ON OF HIGHER AMOUNT OF DEPRECIATION ON COMPUTER PERIPHERA L. FURTHER, IT WAS ALLOWED DEDUCTION U/S 80HHC ON TWO COUNTS; NAMELY; - I) 90% OF MISCELLANEOUS INCOME WAS NOT REDUCED FROM TH E PROFITS OF THE BUSINESS; AND II) THE FACT THAT A SUM OF `4,42,46,595/- WAS NOT REM ITTED IN FOREIGN EXCHANGE TO INDIA WITHIN THE PRESCRIBED PERI OD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR WAS IGNORED. IT IS ALSO SUBMITTED THAT THE ASSESSEE WAS ALLOWED EXCESS CRE DIT IN RESPECT OF TAX DEDUCTED AT SOURCE. 3.2 IT IS ARGUED THAT EXCESS DEDUCTION OF DEPRECIATION AND CLAIM U/S 80HHC AMOUNT TO ESCAPEMENT OF INCOME UNDER SUB CLAUSE (IV) OF CLAUSE (C) OF EXPLANATION TO SECTION 147. SIMILARLY, GRANT OF EXCESS CREDIT FOR TDS ALSO AMOUNTS TO ESCAPEMENT OF INCOME UN DER SUB CLAUSE (III) OF THE EXPLANATION. IT IS FURTHER ARGUED THAT THE ASSESSING OFFICER DID NOT EXAMINE THESE ISSUES IN THE ORIGINAL ASSESSMENT, WH ICH WERE EXAMINED IN DETAIL IN THE REASSESSMENT PROCEEDINGS ONLY. THE ASSESSEE ALSO DID NOT MAKE FULL DISCLOSURE OF FACTS. THERE FORE, IT IS URGED THAT THE ASSESSMENT HAS BEEN VALIDLY REOPENED. 4 3.3 IN REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT EXCESS GRANT OF CREDIT IN COMPUTATION OF TAX DOES NOT AMOUNT TO ESCAPEMENT OF INCOME. THIS MATTER COULD HAVE BEEN TA KEN UP U/S 154. THE GRANT OF DEPRECIATION ON COMPUTER PERIPHERAL @6 0% OF THE COST OR THE WDV, AS THE CASE MAY BE, IS CORRECT IN LAW AND, TH EREFORE, THERE IS NO ESCAPEMENT OF INCOME ON THIS ISSUE. IT IS ALSO SUBMITT ED THAT THE ASSESSING OFFICER HAD DISCUSSED AT LENGTH THE NATURE OF IN TEREST INCOME OF `6,10,727/- AND HELD THAT THE SAME IS TAXABLE UNDE R THE RESIDUARY HEAD AND NOT AS THE BUSINESS INCOME. THE TAX AUDIT REP ORT WAS FILED BEFORE HIM, WHICH SHOWED THAT THE SALE PROCEEDS HAD BE EN RECEIVED WITHIN THE STATUTORY PERIOD AND, THEREFORE, THERE WA S NO ESCAPEMENT OF INCOME IN REGARD TO DEDUCTION U/S 80HHC. ACCORDINGL Y, IT HAS BEEN ARGUED THAT THE ASSESSMENT HAS BEEN REOPENED MERELY ON C HANGE OF OPINION WHICH IS NOT PERMISSIBLE IN LAW, THEREFORE, TH E LEARNED CIT(A) WAS RIGHT IN ANNULLING THE ASSESSMENT. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIO NS MADE BEFORE US. BRIEFLY SPEAKING THE CASE OF THE LEARNED D R IS THAT THE PROVISION CONTAINED IN SECTION 147 DOES NOT HAVE ANY W ORDS SUCH AS CHANGE OF OPINION. THEREFORE, THE WHOLE ISSUE HAS TO BE DECIDED ON THE BASIS OF REASONS TO BELIEVE. HOWEVER, THE CASE OF THE LEARNED COUNSEL IS THAT THE CONCEPT OF CHANGE OF OPINION STILL EXISTS AFTER AMENDING OF SECTION 147 AND, THEREFORE, UNLESS THERE A RE SOME FACTS FOR REOPENING THE ASSESSMENT FOUND AFTER COMPLETION OF ORIGINAL ASSESSMENT, THE SAME CANNOT BE REOPENED MERELY ON CHANGE OF OPINION. 5. BEFORE PROCEEDING FURTHER, WE MAY LOOK INTO THE MATTER REGARDING DEDUCTION OF DEPRECIATION ON COMPUTER PER IPHERALS AND GRANT OF EXTRA CREDIT OF TAX IN CONTRAVENTION OF THE PROV ISION CONTAINED IN 5 SECTION 199. IT HAS BEEN THE COMMON CASE OF BOTH THE PARTIES THAT AS PER THE DECISION OF JURISDICTIONAL HIGH COURT, BEING HONBLE DELHI HIGH COURT, DEDUCTION OF DEPRECIATION @60% IS ADMISSIBLE O N COMPUTERS AND COMPUTER PERIPHERALS. THEREFORE, THE ARGUMENT OF TH E LEARNED COUNSEL THAT THERE IS NO ESCAPEMENT OF INCOME ON THIS ISSUE IS CO RRECT. IN SO FAR AS CREDIT OF TAX IS CONCERNED, IT IS NOT AN ISSUE OF ESCAPEMENT OF INCOME. THE CASE OF THE LEARNED DR IS THAT GRANT OF EXCESS CREDIT AMOUNTS TO THE INCOME MADE THE SUBJECT OF EXCESSIVE REL IEF UNDER THE ACT. THE CORRECT POSITION IS THAT INCOME HAS NOT BEEN MADE SUBJECT TO EXCESSIVE RELIEF AS NO EXEMPTION, DEDUCTION OR RELIEF IS GIVEN FROM THE INCOME. THEREFORE, THE ARGUMENT OF THE LEARNED COU NSEL THAT THE GRANT OF EXTRA CREDIT FROM TAX DOES NOT AMOUNT TO ESCAPEMEN T OF INCOME IS ALSO UPHELD. 5.1 AS FAR AS DEDUCTION U/S 80HHC IS CONCERNED, TWO POI NTS ARISE. FIRSTLY, 90% OF THE MISCELLANEOUS INCOME WAS NOT REDUCE D FROM THE BOOK PROFITS AND SECONDLY THE DEDUCTION WAS ALLOWED IN RESPECT OF THE AMOUNT, WHICH WAS NOT BROUGHT INTO INDIA IN CONVERTI BLE FOREIGN EXCHANGE WITHIN THE PRESCRIBED TIME LIMIT. IN SO FAR AS BRINING FOR CONVERTIBLE FOREIGN EXCHANGE IN INDIA IS CONCERNED, THE LEARNED COUNSEL DREW OUR ATTENTION TO PAGE NO.31 OF THE PAPER BOOK, BEING FORM NO.10CCAC SIGNED BY SHRI S.N. DHAWAN AND COMPANY, CA S. HE ALSO DREW OUR ATTENTION TO PAGE NO.37 OF THE PAPER BOOK, BEING THE BALANCE SHEET AS ON 31.03.2004, WHICH SHOWS SUNDRY DEBTORS AT `3, 42,46,595/-. THE STATUTORY FORM SHOWS TOTAL TURN OVER OF THE BUSINESS AT ABOUT `21.36 CRORES AND ADJUSTED EXPORT TURN OVER AT ABOUT `21.33 CRORES. THE PROFITS OF THE BUSINESS AND THE ADJUSTED PROFITS OF T HE BUSINESS HAVE BEEN SHOWN AT `2,18,53,360/-. THE CASE OF THE L EARNED COUNSEL IS THAT AS ON 31.03.2004, SOME MONEY WAS YET TO BE RECEIV ED IN INDIA IN CONVERTIBLE FOREIGN EXCHANGE. HOWEVER, THE SAME WAS RECEIVED BY 28.10.2004, WHEN THE STATUTORY REPORT U/S 80HHC WAS PR EPARED. IN THE REASONS, THE ASSESSING OFFICER CONSIDERED ONLY THE BALANCE SHEET AND 6 NOT THE AUDIT REPORT. THEREFORE, ALL THE FACTS ON R ECORD WERE NOT TAKEN INTO ACCOUNT IN THIS REGARD. NO ERROR HAS BEEN POINT ED OUT IN THE REASONS IN RESPECT OF FIGURES MENTIONED IN THE STATUTORY REPORT. A STATEMENT WAS MADE AT BAR THAT THE POSITION TAKEN IN A UDIT REPORT IS FACTUALLY CORRECT. THEREFORE, IT IS CONTENDED THAT T HERE WAS NO CONNECTION BETWEEN THE MATERIAL CONSIDERED BY THE ASSE SSING OFFICER AND ESCAPEMENT OF INCOME. IN RESPECT OF REDUCTION O F 90% OF THE MISCELLANEOUS INCOME, OUR ATTENTION HAS BEEN DRAWN TO PAGE NO.46 OF THE PAPER BOOK, WHICH FURNISHES THE DETAILS AS UNDER:- 3.MISCELLANEOUS INCOME INCLUDES THE FOLLOWING: PROVISION WRITTEN BACK `2,13,141/- QUOTA TRANSFER PREMIUM `4,88,505/- OTHER INCOME ` 2,092/- DISCOUNT RECEIVED ` 321/- SCRAP SALE `4,19,050/- 5.2 THIS INFORMATION WAS AVAILABLE WITH THE ASSESSING OFF ICER AS IT WAS CONTAINED IN NOTES TO THE ACCOUNT. THE INFORMATI ON WAS CONSIDERED BY THE ASSESSING OFFICER, AS IS CLEAR FROM THE DISCUSSION ON PAGE NOS. 1 TO 6 OF THE ORIGINAL ASSESSMENT ORDER. THE ONLY ADJUSTMENT MADE BY THE ASSESSING OFFICER IS IN RESPECT OF INTEREST IN COME, WHICH MEANS THAT HE WAS OF THE VIEW THAT MISCELLANEOUS INCOME FORMS PART OF OPERATING INCOME. OTHERWISE ALSO, THE DETAILS SHOW THAT THE INCOME AROSE OUT OF THE TRANSACTIONS OF THE BUSINESS. FURTHER, EVEN IF THE DEDUCTION WAS WRONGLY ALLOWED, THE MISTAKE COULD NOT BE RECTIFIED UNDER THE PROVISION OF SECTION 147. IN CONNECTION WI TH THESE MATTERS, IT WILL BE NECESSARY TO EXAMINE THE CASES RELIED UPON BY T HE RIVAL PARTIES. 5.3 IN THE CASE OF CALCUTTA DISCOUNT COMPANY VS. INCOM E TAX OFFICER, (1961) 41 ITR 191, THE CASE OF THE ASSESSEE BEF ORE THE ASSESSING OFFICER WAS THAT SALE OF SHARES CONSTITUTED CASUAL 7 TRANSACTIONS AND MERE CHANGE OF INVESTMENTS, AND THAT T HIS EXPLANATION HAD BEEN ACCEPTED FROM YEAR TO YEAR. H OWEVER, EXAMINATION OF ACCOUNTS SHOWED THAT THE COMPANY HAD B EEN SYSTEMATIC CARRYING ON TRADE IN PURCHASE AND SALE OF IN VESTMENTS. THE HONBLE COURT HELD THAT THE QUESTION HAD TO BE DECID ED ON A NUMBER OF CONSIDERATIONS SUCH AS FREQUENCY OF PURCHASE AND SALE, NA TURE OF SHARES, COMPARISON OF COST PRICE AND SALE PRICE AND SEVER AL OTHER FACTORS. IT WAS THE DUTY OF THE COMPANY TO DISCLOSE AL L FACTS, WHICH HAD A BEARING ON THE QUESTION. ONCE RELEVANT FACTS HAD BE EN DISCLOSED IT WAS FOR THE ASSESSING OFFICER TO DRAW APPROPRIATE CONCLU SION. NO DUTY IS CAST ON THE COMPANY TO ADMIT THE TRANSACTIONS TO BE OF THE NATURE OF TRADE. THUS, IT WAS HELD THAT IN ABSENCE OF ANY MATER IAL NON- DISCLOSURE, THE ASSESSMENT WAS WRONGLY REOPENED. IN THE C ASE OF RAM PRASAD VS. INCOME TAX OFFICER, (1995) 82 ITR 199 (ALL .), IT HAS BEEN HELD THAT THE SCOPE OF JUDICIAL REVIEW IN THE MATTER IS RATHER LIMITED. WHAT IS TO BE SEEN IS WHETHER THERE IS A LIVE LINK BETW EEN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT AND BELIEF REGARD ING ESCAPEMENT OF INCOME. IF THE ANSWER IS IN AFFIRMATIVE , THE COURTS WILL NOT GO INTO THE SUFFICIENCY OF REASONS. IN THE CASE OF PHOOL CHAND BAJRANG LAL AND ANOTHER VS. INCOME TAX OFFICER AND A NOTHER, (1993) 203 ITR 456 (SUPREME COURT), IT WAS FOUND AFTER COMP LETION OF ORIGINAL ASSESSMENT THAT THE BORROWING OF `50,000/- IN CASH FROM A CALCUTTA COMPANY WAS NOT A LOAN BUT ONLY A COVER FOR A BOGUS T RANSACTION. SUCH A CASE COULD NOT HAVE BEEN MADE OUT ON THE BASIS OF FACTS AVAILABLE WITH THE INCOME TAX OFFICER AT THE TIME O F ORIGINAL ASSESSMENT. AFTER ACQUIRING INFORMATION, WHICH WAS SPECI FIC AND RELIABLE IN NATURE, RELATING TO CONCLUDED ASSESSMENT, W HICH EXPOSED THE FALSITY OF STATEMENT BY THE ASSESSEE AT THE TIME OF O RIGINAL ASSESSMENT A DISTINCT SITUATION AROSE. THUS, WHERE A TRANSA CTION ITSELF WAS FOUND TO BE BOGUS ON A SUBSEQUENT INQUIRY, THE MERE DISCLOSURE OF THE TRANSACTION IN THE ORIGINAL ASSESSMENT IS NOT TRUE AN D FULL DISCLOSURE 8 OF FACTS. IN THE CASE OF BAWA ABHAI SINGH VS. DCIT, ( 2002) 253 ITR 83 (DELHI), IT HAS BEEN HELD THAT THE DECISION OF ESCAPEM ENT OF INCOME WAS TAKEN BY THE ASSESSING OFFICER ON THE BASIS OF THE REP ORT OF DVO IN RESPECT OF WHICH REFERENCE WAS MADE BEFORE ASSESSMENT BUT WHICH WAS RECEIVED AFTER ASSESSMENT. THE REPORT CONSTITUTED IN FORMATION FOR THE PURPOSE OF SECTION 147. IN THE CASE OF RAKESH AGAR WAL (THROUGH LEGAL HEIR) VS. ACIT (1997) 225 ITR 496 (DELHI), THE ASSESSING OFFICER NOTED TWO FACTS IN THE REASONS, NAMELY (I) THE RENT WAS KEPT LOW FOR THE REASON THAT THE ASSESSEE WAS COMPENSATED BY GIVING INT EREST-FREE SECURITIES OF `13,50,500/- BY TWO COMPANIES, WHICH CAM E TO LIGHT IN THE PROCEEDINGS OF SUBSEQUENT YEAR IN WHICH HIGHER RENTAL INCOME WAS DISCLOSED BY THE ASSESSEE HIMSELF- AND (II) THE VALUATION OF PERQUISITE PROVIDED BY HOTEL BANJARA LIMITED HAD NOT BEEN CORR ECTLY SHOWN. THE COURT CAME TO THE CONCLUSION THAT THE PROCEEDINGS WER E VALIDLY REOPENED AS THE INCOME HAD ESCAPED INCOME DUE TO THE FAILURE OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NE CESSARY FOR HIS ASSESSMENT, WHICH CAME TO THE NOTICE OF THE ASSESSING OFFIC ER AFTER PROCESSING THE RETURN U/S 143(1)(A). 5.4 ON THE OTHER HAND, LEARNED COUNSEL RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVI NATOR OF INDIA LTD., (2002) 256 ITR 1 (FULL BENCH). IN THIS CASE, IT HAS B EEN HELD THAT TWO CONDITIONS WERE REQUIRED TO BE SATISFIED; - (I) ASSESSING OFFICER SHOULD HAVE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT; AND (II) SUCH ESCAPEMENT HAD OCCURRED BY REA SON OF OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. REFE RRING TO THE OLD PROVISION, IT WAS MENTIONED THAT THE WORDS REASON TO BELIEVE FIND PLACE IN CLAUSES (A) AND (B) OF SECTION 147. THEREFO RE, FORMATION OF REASON TO BELIEVE AND RECORDING OF REASONS WERE IMPE RATIVE BEFORE A COMPLETED ASSESSMENT COULD BE REOPENED. THIS IS SO EVEN AFTER 9 AMENDMENT OF THE PROVISION. IF THE CONTENTION OF TH E REVENUE THAT AN ASSESSMENT CAN BE REOPENED WHEN NO FRESH FACT HAS COME ON RECORD, IT WOULD CONFER ARBITRARY POWER ON THE ASSESSING OFFICER, WHO COULD DIFFER FROM HIS PREDECESSOR AT THE SLIGHTEST PRETEXT. THE ASSESSME NT CAN ALSO BE REOPENED REPEATEDLY. IT WAS HELD THAT THE ENTIRE STATUTE SHOULD BE READ AS A WHOLE. THEREFORE, THE ASSESSMENT CANNOT BE RE OPENED MERELY ON CHANGE OF OPINION. THIS DECISION HAS BEEN A PPROVED BY THE HONBLE SUPREME COURT. FURTHER, IN THE CASE OF CIT VS. MODIPON LIMITED, IN I.T.A. NO.533 OF 2011 DATED 21.03.2011, A COPY OF WHICH HAS BEEN PLACED BEFORE US, THE HONBLE DELHI HIGH COURT MENTIONED THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS O F INFORMATION AVAILABLE IN THE PROFIT AND LOSS ACCOUNT AND THE TAX AUDIT REPORT. THE HONBLE COURT REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LIMITED, 32 0 ITR 561, AND HELD THAT THE ASSESSMENT CANNOT BE REOPENED MERELY ON CHANGE OF OPINION. 5.5 REVERTING TO THE FACTS OF THIS CASE, THE DETAILS OF MISCELLANEOUS INCOMES WERE AVAILABLE IN THE ANNUAL ACCOUNTS AND THE SE HAVE BEEN REPRODUCED BY US IN AN EARLIER PARAGRAPH. FURTHER, THE TAX AUDIT REPORT DID NOT MAKE ANY ADJUSTMENT IN RESPECT OF OUTSTANDING SUNDRY DEBTORS FINDING PLACE IN THE BALANCE SHEET. NO MISTAKE HAS BE EN POINTED OUT IN THE DETAILS OF MISCELLANEOUS INCOME OR THE TAX AUDIT R EPORT IN SO FAR AS RECORDED REASONS ARE CONCERNED. THE CASE OF THE LEARN ED DR IS THAT MERELY FURNISHING ACCOUNTS DOES NOT AMOUNT TO FULL AND TRUE DISCLOSURE AS CONTEMPLATED U/S 147. ON THE OTHER HAND, THE CASE OF THE LEARNED COUNSEL IS THAT ALL PRIMARILY FACTS HAVE BEEN DISCLOSED AND CONSIDERED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT. HAVIN G CONSIDERED VARIOUS CASE LAWS CITED BY RIVAL PARTIES, IT IS FOUND TH AT THE DECISION IN THE CASE OF CALCUTTA DISCOUNT COMPANY LIMITED STANDS IN FAVOUR OF THE ASSESSEE AS MATERIAL FACTS HAVE BEEN DISCLOSED. IT IS NO D OUBT TRUE THAT SUFFICIENCY OF REASONS CANNOT BE LOOKED INTO, BUT IT WAS HELD IN THE 10 CASE OF RAM PRASAD THAT THERE MUST BE A LIVE LINK BETW EEN THE REASONS AND ESCAPEMENT OF INCOME. WE FIND THAT SUCH A LINK I S MISSING IN THIS CASE BECAUSE THE ASSESSING OFFICER HAD ALLOWED DEDUCTION AFTER EXAMINING THE DETAILS FILED IN THIS BEHALF ALBEIT AFT ER EXCLUDING 90% OF INTEREST INCOME. THEREFORE, THIS CASE DOES NOT ADVANCE THE ARGUMENTS OF THE REVENUE. IN THE CASE OF PHOOL CHAND BAJRANG LAL AND ANOTHER, INFORMATION WAS ACQUIRED SUBSEQUENTLY THAT THE ALLEGED LOAN OF `50,000/- WAS A BOGUS TRANSACTION. NO SUCH FINDING OF ANY BOGUS TRANSACTION HAS BEEN RECORDED IN THIS CASE. IN THE CASE OF BAWA ABHAI SINGH, THE REPORT OF THE DVO, RECEIVED AFTER ASSESSMENT , WAS HELD TO BE INFORMATION. NO INFORMATION HAS COME TO THE POSSESSI ON OF THE ASSESSING OFFICER IN THIS CASE. IN THE CASE OF DECEASED RA KESH AGARWAL, THE ASSESSING OFFICER HAD COME IN POSSESSION OF SOM E INFORMATION FROM THE PROCEEDINGS OF SUBSEQUENT ASSESSMENT YEARS, WHICH DEFINITELY INDICATED ESCAPEMENT OF INCOME. NO SUCH INFORMATION HAS BEEN CULLED OUT BY THE ASSESSING OFFICER IN THIS CASE FROM THE RECORD OF THE PREVIOUS OR SUBSEQUENT YEARS. THUS, IT IS A CASE WHERE ALL THE INFORMATION WAS AVAILABLE AT THE TIME OF ORIGINA L ASSESSMENT. NO FALSITY WAS POINTED OUT IN THE REASONS IN THE INFORMATI ON FURNISHED BY THE ASSESSEE. FURTHER, NO SUCH CASE HAD BEEN MADE OUT TH AT THE ASSESSEE WITHHELD SOME INFORMATION OR FURNISHED SUCH INFOR MATION, WHICH WAS FOUND TO BE BOGUS SUBSEQUENTLY. THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3). IN SUCH CIRCUMSTANCES, THE DE CISION IN THE CASE OF KELVINATOR OF INDIA LIMITED, BEING A BINDING PRECEDENT, IS APPLICABLE, NAMELY THAT IS A COMPLETED ASSESSMENT CANNOT BE REOPENED MERELY ON CHANGE OF OPINION BECAUSE REASONS TO BELIEVE PRE SUPPOSE EXISTENCE OF SOME MATERIAL ON RECORD TO SHOW THAT INCOME HAD ESCAPED ASSESSMENT. THIS DECISION WAS APPROVED BY HONB LE SUPREME COURT AND FOLLOWED IN THE CASE OF MODIPON LI MITED. RESPECTFULLY FOLLOWING THESE DECISIONS, IT IS HELD THAT THERE WAS NO 11 CIRCUMSTANCE OR FACT ON RECORD, WHICH COULD JUSTIFY R EOPENING THE ASSESSMENT. 6. IN RESULT, THE APPEAL IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 24.06. 2011. SD/- SD/- ( RAJPAL YADAV ) ( K.G. BA NSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 24.06.2011. NS COPY FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).