INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Change of opinion by AO -

AO reopened assessment on account of purported discrepancy in stock valuation amounting to Rs. 14.70 crores and made addition. Assesseepleaded change of opinion by AO. Held: Assessee, pursuant to the query raised by AO in the earlier/original scrutiny assessment proceedings, had replied and furnished all the details requisitioned by AO regarding valuation of stock and to all other queries raised by him regarding the stock. AO after examining the answers/details furnished by assessee pursuant to his queries regarding valuation of stock accepted the claim of assessee on this issue and did not draw any adverse inference in the assessment framed under section 143(3). In such a scenario, since AO has reopened this issue (valuation of stock) merely on perusal of the assessment records and not on the basis of any fresh materials, resorting to re-opening, could at best be termed as 'change of opinion' by AO, which was not sustainable.

Relied:CIT v. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) : 2010 TaxPub(DT) 1335 (SC) and Amrit Feeds Ltd. v. Asstt. CIT (2011) 239 CTR 82 (Cal-HC) : 2011 TaxPub(DT) 320 (Cal-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

SUBSCRIBE FOR FULL CONTENT