| The Tax Publishers2019 TaxPub(DT) 0732 (Del-HC) : (2019) 411 ITR 0403 : (2019) 306 CTR 0529 INCOME TAX ACT, 1961
Section 147 Section 148
Where assessee (BIL) transferred its infrastructure assets being telecommunication towers and all assets, etc., to third party and after purchasing the same assets from B&L disclosing true and full disclosure of gains arose from such assets of assessees and could have been discovered by due diligence there was thus, a 'change of opinion' and as such. reassessment has to be quashed.
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Reassessment - Validity of notice under section 148 - Reason to believe - Change of opinion
The assessee-company had entered in to a scheme of arrangement for transfer of the Telecom Infrastructure undertaking from 'BAL', which had been approved by the High Court. Demerger of tower business from BAL to BIL, which sanctioned by the court pursuant to which BIL had acquired 52,000 tower infrastructures on 31-3-2008. The assets WDV was Rs. 5739.60 crores. The value of assets in the books of BAL was Rs.8218 crores the passive infrastructure as transferred from BAL had been recorded in the accounts of BIL at its fair value of Rs. 8235.96 crores and credited to the general reserve, etc. As such difference between two figures being Rs.8218 crores and Rs.5739.60 was taxed in hands of BAL. Assessee (BIL) immediately transferred the infrastructure to third party. AO initiated reassessment that WDV Rs. 5739.60 was resulted gains to assessee. However, assessee had with its accounts evidences, etc., and questioneries, etc., were disclosed true and full disclosure and other facts due diligence could have been discovered. Thus, it was a 'change of opinion' on parts of AO.Held: Jurisdictional pre-conditions in the form of proviso to section 147 was not satisfied in the facts of the present case. Explanation 1 would not apply as all primary facts were disclosed, stated and were known and in knowledge of the AO. Further, this would be a case of 'change of opinion' as the assessee had disclosed and had brought on record all facts relating to transfer of passive infrastructure, its book value, fair market value as was mentioned in the SOA as also that the transferred passive assets to become property of M/s. Industrial Infrastructure Ltd. including the dates of transfer and the factum that one-step subsidiary Bharti Infratel Ventures Ltd. was created for the said purpose. These facts were within the knowledge of the AO when he had passed the original assessment order for the assessment year 2008-09 on 20-12-2010. as such the transferred assets' valuation was very much known to AO.
REFERRED : CIT v. Usha International Limited, (2012) 348 ITR 485 (Delhi) (FB) : 2012 TaxPub(DT) 2966 (Del-HC), CIT v. Kelvinator of India Ltd. (2002) 256 ITR 1 (Del) (FB) : 2002 TaxPub(DT) 1348 (Del-HC), CIT v. Kelvinator of India Limited, (2010) 2 SCC 723 : 2010 TaxPub(DT) 1335 (SC), State of Uttar Pradesh and Others v. Aryaverth Chawal Udyog and Ors., (2015) 17 SCC 324 (SC), Aslam Mohammad Merchant v. Competent Authority, (2008) 14 SCC 186, CIT v. Rajesh Jhaveri Stock Brokers (P) Limited, (2008) 14 SCC 208 : 2007 TaxPub(DT) 1257 (SC), S. Narayanappa v. CIT, (1967) 1 SCR 590 : 1967 TaxPub(DT) 0198 (SC) and ITO v. Techspan India Private Limited & Anr. (2018) 6 SCC 685 : 2018 TaxPub(DT) 1991 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2008-09
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