GREEN HOTELS & ESTATES P. LTD, MUMBAI V. ASST CIT CEN CIR 23, MUMBAI

ITA 3783/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5740 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: SANJAY B SAWANT
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Earning of tax free income; Bad and doubtful debts; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 50C; 14A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA NO. 3783/MUM/2013 (ASSESSMENT YEAR: 2007-08) GREENFIELD HOTELS & ESTATES P. LTD. ACIT, CENTRAL C IRCLE 23 CONSTRUCTION HOUSE 'B', 2ND FLOOR AAYAKAR BHAVAN, M .K. ROAD 623, LINKING ROAD, KHAR (W) VS. MUMBAI 400020 MUMBAI 400052 PAN - AAACG0561F APPELLANT RESPONDENT APPELLANT BY: SHRI SANJAY B. SAWANT RESPONDENT BY: MS. SONIA KUMAR DATE OF HEARING: 28.01.2014 DATE OF PRONOUNCEMENT: 31.01.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE COMPANY IS DIRECTED AGA INST THE ORDER PASSED BY THE CIT(A)-40, MUMBAI AND IT PERTAINS TO A.Y. 2007-08. 2. DISALLOWANCE MADE BY THE AO UNDER SECTION 14A OF TH E INCOME TAX ACT, BY REOPENING THE ASSESSMENT, BY ISSUANCE OF NO TICE UNDER SECTION 148 OF THE ACT, IS THE SUBJECT MATTER OF DISPUTE BEFORE THIS TRIBUNAL. VIDE GROUND NO. 1 ASSESSEE CONTENDS THAT PROVISIONS OF SECTION 148 ARE INITIATED ON MERE CHANGE OF OPINION ON SAME SET OF FACTS, WHICH ARE A LREADY AVAILABLE WITH THE AO, HENCE REASSESSMENT IS BAD IN LAW. VIDE GROUND N O. 2 THE ASSESSEE CONTENDS THAT NO CASE WAS MADE OUT FOR INVOKING PRO VISIONS OF SECTION 14A OF THE ACT IN AS MUCH AS THE AO HAS NOT RECORDED HI S SATISFACTION AS TO HOW THE EXPENDITURE DECLARED BY THE ASSESSEE AGAINST OT HER INCOME IS RELATABLE TO THE EXEMPT INCOME, I.E. DIVIDEND INCOME. 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEAL ARE STAT ED IN BRIEF. IN THE YEAR UNDER CONSIDERATION THE ASSESSMENT WAS ORIGINA LLY COMPLETED UNDER SECTION 143(3) OF THE ACT ON 08.12.2009. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE AO APPEARS TO HAVE NOTIC ED THAT THE ASSESSEE ITA NO. 3783/MUM/2013 GREENFIELD HOTELS & ESTATES P. LTD. 2 RECEIVED DIVIDEND INCOME OF ` 1.11 CRORES WHICH WAS CLAIMED AS EXEMPT UNDER SECTION 10(34) OF THE ACT BUT THE ASSESSEE HA S NOT VOLUNTARILY DISALLOWED ANY PORTION OF THE EXPENDITURE CLAIMED A GAINST OTHER INCOME, UNDER SECTION 14A OF THE ACT. IT APPEARS THAT THE A O RAISED A QUERY REGARDING APPLICABILITY OF SECTION 14A IN HIS LETTE R DATED 10.09.2009. IN RESPONSE THERETO THE ASSESSEE STATED THAT IT HAS IN CURRED EXPENDITURE IN THE FORM OF LEASE RENT, INTEREST RECEIVABLE, ESTABLISHM ENT EXPENSES AND AUDITORS REMUNERATION BUT NONE OF THEM ARE EITHER DIRECTLY O R INDIRECTLY CONNECTED TO EXEMPT INCOME. IN OTHER WORDS, THE ABOVE EXPENDITUR E WAS NOT INCURRED TO EARN EXEMPT INCOME. THEREFORE THE QUESTION OF ANY E XPENDITURE BEING ATTRIBUTABLE TO EXEMPT INCOME, IN VIEW OF THE PROVI SIONS OF SECTION 14A, DOES NOT ARISE. HAVING TAKEN INTO CONSIDERATION THE REPL Y FILED BY THE ASSESSEE, THE AO HAS NOT MADE ANY DISALLOWANCE AND ACCORDINGL Y COMPLETED THE ASSESSMENT. 4. SUBSEQUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY AND A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 19.03.2012 WHE REIN THE AO OBSERVED THAT THE ASSESSEES INCOME COMPRISES OF INCOME FROM HOUSE PROPERTY, LOSS FROM BUSINESS/PROFESSION AND EXEMPT INCOME REFERABL E TO DIVIDEND RECEIPTS. HE ALSO OBSERVED THAT DURING COURSE OF ASSESSMENT P ROCEEDINGS DISALLOWANCE WAS MADE ON ACCOUNT OF CAPITAL GAINS IN TERMS OF PR OVISIONS OF SECTION 50C OF THE ACT AND CLAIM OF BAD DEBTS WERE ALSO DISALLO WED. IN THE LIGHT OF THE ABOVE FACTS SOME EXPENDITURE IS ATTRIBUTABLE TO EXE MPT INCOME. HE REFERRED TO SECTION 14A OF THE ACT WHICH PROVIDES THAT NO DE DUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DO NOT FORM PART OF THE TOTAL TAXABLE INCOME; THE ASSESSEE, HOWEVER, DID NOT QUANTIFY ANY AMOUNT OF EXPENDITURE ATTRIBUT ABLE TO EXEMPT INCOME DESPITE THE FACT THAT SECTION 14A PROVIDES MANDATOR Y DISALLOWANCE. HE ALSO OBSERVED THAT DURING THE COURSE OF SCRUTINY PROCEED INGS NO DISALLOWANCE UNDER SECTION 14A WAS MADE EVENTHOUGH A PRIMARY CON DITION OF EXEMPTED INCOME WAS SPECIFIED BUT RULE 8D PROVIDES FOR THE M ETHOD OF DETERMINING THE AMOUNT OF EXPENDITURE IN RELATION TO THE INCOME NOT INCLUDIBLE IN THE TOTAL INCOME. PRECISELY ON THIS GROUND HE SOUGHT TO REOPEN THE ASSESSMENT. ITA NO. 3783/MUM/2013 GREENFIELD HOTELS & ESTATES P. LTD. 3 5. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT THE ASSESSEE CATEGORICALLY SUBMITTED, VIDE LETTER DATED 07.11.2012, THAT NONE OF THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS INCURRE D TO EARN EXEMPT INCOME. IN FACT THE EXPENDITURE WAS MANDATORY IN NA TURE SUCH AS LEASE RENT, RATES AND TAXES, ETC. THE COMPANY ALSO SUBMITTED TH AT THE ASSESSEE EARNED INTEREST INCOME WHICH IS MORE THAN THE INTEREST PAI D WHICH MEANS THAT THE ASSESSEE UTILISED ITS OWN FUNDS TO EARN TAX FREE IN COME FROM DIVIDEND AND THUS, LOOKING AT ANY ANGLE, THERE IS NO BASIS FOR R EOPENING THE ASSESSMENT. THE AO, HOWEVER, MERELY PROCEEDED TO COMPUTE THE DI SALLOWANCE BY APPLYING RULE 8D OF THE ACT AT ` 1,51,045/-. 6. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) TH AT THE VERY BASIS FOR REOPENING OF ASSESSMENT WAS APPLICABILITY OF RU LE 8D WHEREAS THE HON'BLE BOMBAY HIGH COURT, IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DCIT 328 ITR 81, CONCLUDED THAT PROVISIONS OF RULE 8D ARE NOT APPLICABLE TO THE ASSESSMENT YEARS EARLIER TO A.Y. 2008-09 AND HE NCE THE AO COULD NOT HAVE MADE THE DISALLOWANCE. WITHOUT PREJUDICE IT WA S SUBMITTED THAT IT HAD INTEREST FREE FUNDS IN THE FORM OF SHARE CAPITAL, R ESERVES AND SURPLUS, WHICH WERE SUFFICIENT FOR MAKING INVESTMENTS AND THUS THE RE IS NOTHING ON RECORD TO SUGGEST THAT THE ASSESSEE HAD INCURRED ANY EXPEN DITURE FOR THE PURPOSE OF EARNING EXEMPT INCOME. 7. THE LEARNED CIT(A) OBSERVED THAT IN THE LIGHT OF TH E DECISION OF THE HON'BLE BOMBAY HIGH COURT (SUPRA) RULE 8D IS NOT AP PLICABLE IN THIS YEAR BUT THE FACT REMAINS THAT EVEN UNDER SECTION 14A OF THE ACT DISALLOWANCE CAN BE MADE ON A REASONABLE BASIS. HE ALSO OBSERVED THAT THE ASSESSEE EARNED EXEMPT DIVIDEND INCOME OF ` 1,11,28,950/- WHEREAS IT HAD INCURRED EXPENDITURE IN THE FORM OF INTEREST PAYMENT TO THE TUNE OF ` 2,09,401/- AND THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE ENTIRE EXPENDITURE WAS FOR EARNING INCOME OTHER THAN EXEMP T INCOME. HE ALSO OBSERVED THAT NO NEXUS WAS PROVED BY THE ASSESSEE C OMPANY THAT THE LOAN TAKEN WAS NOT UTILISED FOR ACQUISITION OF SHARES FR OM WHERE EXEMPT INCOME IS DERIVED. ACCOUNTS OF THE ASSESSEE ARE MIXED, I.E. S EPARATE ACCOUNTS WERE NOT MAINTAINED WITH REGARD TO EXEMPT INCOME. HE THEREFO RE CONCLUDED THAT SOME ITA NO. 3783/MUM/2013 GREENFIELD HOTELS & ESTATES P. LTD. 4 DISALLOWANCE IS CALLED FOR AND, ON ADHOC BASIS, HE RESTRICTED THE DISALLOWANCE TO ` 1,00,000/-. 8. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. THOUGH THE LEGALITY OF THE NOTICE ISSUED UNDER SECTION 148 WS NOT RAISED BEFORE THE CIT(A), A SPECIFIC GROUND WAS RAISED BEFORE THE TRI BUNAL TO CHALLENGE THE REOPENING OF ASSESSMENT ON THE GROUND THAT IT IS BA SED ON MERE CHANGE OF OPINION, WHICH IS NOT PERMISSIBLE IN LAW. THE LEARN ED COUNSEL FOR THE ASSESSEE ADVERTED THE ATTENTION OF THE BENCH TO THE REPLY TENDERED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS TO SUBMIT THAT THE AO HAS SPECIFICALLY CALLED FOR AN EXPLANATION WITH REGARD TO APPLICABILITY OF SECTION 14A OF THE ACT AND THE ASSESSEE HAVING TENDERED AN EXPLANATION THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT AND DESPITE THERE BEING NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF T HE CASE FACTS BEING ALREADY ON RECORD SEEKING TO REOPEN THE ASSESSMEN T IS NOT IN ACCORDANCE WITH LAW, SINCE IT IS BASED ON MERE CHANGE OF OPINI ON. IN THIS REGARD THE LEARNED COUNSEL RELIED UPON THE DECISION OF THE HON 'BLE BOMBAY HIGH COURT IN THE CASE OF CARTINI INDIA LTD. VS. ACIT 314 ITR 275 WHEREIN THE COURT OBSERVED THAT REASSESSMENT ON THE BASIS OF MATERIAL CONSIDERED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS IS BAD IN LAW BECAU SE IT WOULD AMOUNT TO MERE CHANGE OF OPINION WHICH IS NOT PERMISSIBLE AND ACCORDINGLY THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT WAS QUASHED. TH E LEARNED COUNSEL FURTHER HIGHLIGHTED THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS A SPECIFIC QUESTION WAS RAISED WITH REGARD TO THE NATURE OF EX PENDITURE AND THE ASSESSEE CATEGORICALLY REFERRED TO THE NATURE OF EX PENDITURE AND AFTER VERIFICATION OF THE SAME THE AO HAS NOT MADE ANY DI SALLOWANCE UNDER SECTION 14A OF THE ACT BUT WHILE RECORDING THE REAS ONS FOR REOPENING THE ASSESSMENT HE SOUGHT TO PROCEED ON THE FOOTING THAT RULE 8D IS APPLICABLE AND HAS TO BE READ ALONGWITH SECTION 14A OF THE ACT OVERLOOKING THE FACT THAT AS PER THE DECISION OF THE HON'BLE BOMBAY HIGH COUR T IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DCIT 328 ITR 81 RULE 8D I S NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION; IN FACT EVEN TO INVOKE SE CTION 14A OF THE ACT THE AO HAS TO RECORD A REASON THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF DEDUCTION OF EXPENDITURE INCURRED AND CLAI MED AGAINST OTHER ITA NO. 3783/MUM/2013 GREENFIELD HOTELS & ESTATES P. LTD. 5 INCOME INSTEAD OF APPORTIONING IT AGAINST EXEMPT IN COME, WHEREAS IN THE INSTANT CASE THE AO HAS NOT RECORDED ANY SUCH REASO N EXCEPT STATING THAT SECTION 14A MANDATES DISALLOWANCE OF EXPENDITURE, I GNORING THE FACT THAT IT HAS TO BE SHOWN THAT SOME EXPENDITURE IS AT LEAST R EMOTELY RELATABLE TO EARNING OF EXEMPT INCOME, WHICH EXERCISE WAS NOT DO NE EITHER DURING THE COURSE OF ISSUANCE OF NOTICE OR THEREAFTER. THE LEA RNED COUNSEL SUBMITTED THAT THOUGH THIS GROUND WAS NOT RAISED BEFORE THE C IT(A), SINCE IT IS A PURE LEGAL GROUND WHICH ARISES OUT OF THE FACTS ALREADY ON RECORD, IT DESERVES TO BE ADMITTED AND THE NOTICE ISSUED UNDER SECTION 148 TO BE QUASHED. 8.1 EVEN OTHERWISE, ON MERITS, NO DISALLOWANCE IS C ALLED FOR SINCE THE AO HAS NOT RECORDED SATISFACTION WITH REGARD TO ANY CO NNECTION BETWEEN THE EXPENDITURE INCURRED BY THE ASSESSEE AND THE INCOME CLAIMED AS EXEMPT UNDER SECTION 10(34); HE MERELY PROCEEDED TO DISALL OW CERTAIN EXPENDITURE BY INVOKING RULE 8D, WHICH IS NOT APPLICABLE TO THE YEAR UNDER CONSIDERATION. HE ALSO SUBMITTED THAT THE LEARNED C IT(A) HAS PROCEEDED ON ASSUMPTIONS, TO MAKE ADHOC DISALLOWANCE OF ` 1,00,000/- EVEN AFTER HOLDING THAT RULE 8D IS NOT APPLICABLE, OVERLOOKING THE FAC T THAT IT IS NOT THE CASE OF THE AO THAT INTEREST EXPENDITURE CLAIMED BY THE ASS ESSEE IS, AT LEAST, INDIRECTLY CONNECTED TO THE EXEMPT INCOME. THE SPEC IFIC PLEA RAISED BY THE ASSESSEE THAT NO FUNDS WERE UTILISED FOR MAKING INV ESTMENTS AND THE INTEREST RECEIPTS ARE MORE THAN THE INTEREST EXPEND ITURE SHOWS THAT NO BORROWED FUNDS WERE UTILISED FOR EARNING EXEMPT INC OME, WAS NOT CONTROVERTED BY THE AO AND HENCE THE LEARNED CIT(A) , WITHOUT VERIFICATION OF FACTS PROPERLY, COULD NOT HAVE GIVEN ANY INDEPENDEN T FINDING CONTRARY TO THE CONCLUSIONS REACHED BY THE AO. 8.2 HE THUS STRONGLY SUBMITTED THAT REOPENING OF AS SESSMENT IS BAD IN LAW AND THERE IS NO CASE FOR DISALLOWANCE OF ANY PORTIO N OF EXPENDITURE CLAIMED AS DEDUCTION FROM THE TAXABLE INCOME. 9. ON THE OTHER HAND, THE LEARNED D.R. SUBMITTED THAT THE GROUND WITH REGARD TO REOPENING OF ASSESSMENT WAS RAISED FOR TH E FIRST TIME AND HENCE IT SHOULD NOT BE PERMITTED. IT WAS FURTHER SUBMITTED T HAT IT IS FOR THE ASSESSEE TO PROVE THAT NO EXPENDITURE WAS INCURRED FOR EARNI NG EXEMPT INCOME BUT IN ITA NO. 3783/MUM/2013 GREENFIELD HOTELS & ESTATES P. LTD. 6 THE INSTANT CASE THE ASSESSEE PAID INTEREST ON BORR OWALS BUT NO MATERIAL WAS FILED TO PROVE THAT BORROWED FUNDS WERE NOT UTILISE D FOR THE PURPOSE OF MAKING INVESTMENT. SHE THUS STRONGLY SUPPORTED THE ORDERS PASSED BY THE TAX AUTHORITIES. 10. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS A ND PERUSED THE RECORD. LET ME FIRST TAKE UP THE ISSUE CONCERNING R EOPENING OF THE ASSESSMENT. IT IS NOT IN DISPUTE THAT DURING THE CO URSE OF REGULAR ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CALLED UPON TO FURNISH DETAILS OF EXPENDITURE TO VERIFY AS TO WHETHER ANY EXPENDITURE IS RELATABLE TO EARNING OF EXEMPT INCOME, IN WHICH CASE PROVISIONS OF SECTION 14A OF THE ACT CAN BE APPLIED. ASSESSEE FURNISHED DETAILED REPLY EXPLAINI NG THE NATURE OF EXPENDITURE INCURRED AND ALSO POINTING OUT THAT THE ABOVE EXPENDITURE WAS MANDATORY IN NATURE AND IT IS RELATABLE TO INCOME W HICH WAS ASSESSABLE TO TAX AND IT CANNOT, BY ANY STRETCH OF IMAGINATION, B E TREATED AS EXPENDITURE ATTRIBUTABLE TO EARNING OF EXEMPT INCOME. IT IS ALS O NOT IN DISPUTE THAT THE AO HAS NOT MADE ANY ADDITION, PRESUMABLY BY TAKING INTO CONSIDERATION THE EXPLANATION TENDERED BY THE ASSESSEE. THERE IS NO F RESH MATERIAL AVAILABLE ON RECORD TO INDICATE AS TO WHAT WAS THE NEW MATERIAL FOUND BY THE AO TO REOPEN THE ASSESSMENT; THE AO APPEARS TO BE OF THE OPINION THAT SECTION 14A HAS TO BE READ WITH RULE 8D IN WHICH EVENT THE DISA LLOWANCE WOULD BE MANDATORY. AT THIS STAGE IT MAY BE POINTED OUT THAT IT HAS TO BE INFERRED THAT THE AO IS UNDER THE IMPRESSION THAT EVEN IF THERE I S NO EXPENDITURE DIRECTLY OR INDIRECTLY ATTRIBUTABLE TO EARNING OF EXEMPT INC OME RULE 8D MANDATES DISALLOWANCE OF A PERCENTAGE OF EXPENDITURE AS PER THE COMPUTATION PRESCRIBED UNDER THE SAID RULE AND PROBABLY HE MIGH T HAVE BEEN UNDER THE IMPRESSION THAT EXPLANATION 2(C) TO SECTION 147 COM ES INTO PLAY WHEREBY ANY EXCESSIVE RELIEF GRANTED TO THE ASSESSEE CAN BE CORRECTED BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT RULE 8D IS NOT APPLICABLE TO THE ASSESSMENT YEAR UNDER CONSIDE RATION IN VIEW OF THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF GODREJ & BOYCE MFG. CO. LTD. (SUPRA) UNDER SECTION 14A OF THE INCO ME TAX ACT IT IS FOR THE AO TO RECORD HIS FINDINGS THAT THE EXPENDITURE RECO RDED IN THE BOOKS OF ACCOUNT GIVES RISE TO A DOUBT THAT THE CORRECT EXPE NDITURE IN RELATION TO THE ITA NO. 3783/MUM/2013 GREENFIELD HOTELS & ESTATES P. LTD. 7 INCOME, WHICH DOES NOT FORM PART OF THE TOTAL INCOM E, WAS NOT RECORDED PROPERLY WHEREAS IN THE INSTANT CASE NO SUCH FINDIN G WAS GIVEN BY THE AO. UNDER THESE CIRCUMSTANCES IT CAN ONLY BE ASSUMED TH AT THE AO SOUGHT TO REOPEN THE ASSESSMENT BY VIRTUE OF A MERE CHANGE OF OPINION. IN THE CASE OF CARTINI INDIA LTD. (SUPRA) THE HON'BLE BOMBAY HIGH COURT OBSERVED THAT THE EXPRESSION REASONS TO BELIEVE THAT ANY INCOME CHAR GEABLE TO TAX ESCAPED ASSESSMENT IMPLIES THAT THERE SHOULD BE SOME TANGI BLE MATERIAL ON THE BASIS OF WHICH THE AO CAN FORM HIS BELIEF AND SUCH OPINION SHOULD BE BASED UPON RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED THE REQUISITE BELIEF; IN OTHER WORDS, IF AN AO HAS ALRE ADY VERIFIED THE FACTS OF THE CASE WHILE ACCEPTING THE CLAIM OF EXEMPTION AND HAD MADE NO DISALLOWANCE UNDER SECTION 14A IN THE PAST, ON THE SAME SET OF F ACTS HE CANNOT OPT TO REOPEN THE ASSESSMENT BY ISSUANCE OF NOTICE UNDER S ECTION 148 OF THE ACT SINCE IT AMOUNTS TO CHANGE OF OPINION WHICH IS NOT PERMISSIBLE IN LAW. IN THIS REGARD THE OBSERVATIONS OF THE HON'BLE BOMBAY HIGH COURT ON PAGE 282 OF THE REPORT IS EXTRACTED FOR IMMEDIATE REFERENCE: - 23. WHERE THE MATERIAL ON RECORD HAS ALREADY BEEN CONSIDERED AND ADJUDICATED UPON, IT WOULD NOT BE OPEN TO THE ASSES SING OFFICER TO DISAGREE WITH THE VIEW ALREADY TAKEN ON THE MATERIA L ON RECORD. IN SUCH A CASE, REOPENING OF THE ASSESSMENT BASED ON THE MA TERIALS ALREADY CONSIDERED AND ADJUDICATED, WOULD AMOUNT TO REVIEWI NG THE ASSESSMENT ORDER BY REAPPRECIATING THE MATERIAL ON RECORD WHICH IS NOT CONTEMPLATED UNDER SECTION 147 OF THE ACT. IT IS NO T THE CASE OF THE REVENUE THAT THE REOPENING OF THE ASSESSMENT IS COV ERED UNDER EXPLANATION 2(C) TO SECTION 147 OF THE ACT BASED ON ANY MATERIAL OTHER THAN THE MATERIAL CONSIDERED BY THE ASSESSING OFFIC ER AT THE TIME OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THEREFO RE, IN THE FACTS OF THE PRESENT CASE, WHERE THE MATERIALS ON RECORD HAV E ALREADY BEEN CONSIDERED AND CONCLUSIVELY DECIDED IN THE REGULAR ASSESSMENT, WE ARE CLEARLY OF THE OPINION THAT THE PRIMA FACIE OPINION TO THE CONTRARY FORMED BY THE ASSESSING OFFICER ON THE BASIS OF THE VERY SAME MATERIAL WOULD BE MERE CHANGE OF OPINION, AND, THEREFORE, TH E REOPENING OF THE ASSESSMENT BASED ON MERE CHANGE OF OPINION CANNOT B E SUSTAINED. 11. THIS IS A PURE LEGAL ISSUE WHICH DOES NOT REQUIRE F URTHER VERIFICATION OF FACTS AND, THEREFORE, DESERVES TO BE TAKEN INTO CON SIDERATION. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE FIR M VIEW THAT REOPENING OF ASSESSMENT IS BAD IN LAW SINCE NO NEW MATERIAL WAS FOUND BY THE AO TO REOPEN THE ASSESSMENT EXCEPT ON THE ASSUMPTION THAT RULE 8D IS APPLICABLE ITA NO. 3783/MUM/2013 GREENFIELD HOTELS & ESTATES P. LTD. 8 TO THE YEAR UNDER CONSIDERATION WHICH IS CONTRARY T O THE VIEW TAKEN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & B OYCE MFG. CO. LTD. (SUPRA), APART FROM THE FACT THAT THE AO HAS NOT TA KEN ON RECORD ANY FRESH MATERIAL TO COME TO THE CONCLUSION THAT CERTAIN EXP ENDITURE INCURRED BY THE ASSESSEE IS NOT SPECIFICALLY EXPLAINED. FOR THE REA SONS STATED ABOVE I AM OF THE VIEW THAT REOPENING OF ASSESSMENT IS BAD IN LAW AND, THEREFORE, THE ASSESSMENT MADE UNDER SECTION 143(3) R.W.S. 148 IS LIABLE TO BE QUASHED AND I HOLD ACCORDINGLY. 12. SINCE THE REASSESSMENT PROCEEDINGS ARE QUASHED, IT IS NOT NECESSARY TO GO INTO GROUND NO. 2 URGED BEFORE THE TRIBUNAL. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2014. SD/- (D. MANMOHAN) VICE PRESIDENT MUMBAI, DATED: 31 ST JANUARY, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 40, MUMBAI 4. THE CIT CENTRAL-II, MUMBAI 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.