INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Notice issued beyond a period of four years - True and full disclosure by assessee

Assessment in case of assessee-company was completed under section 143(3). Subsequently, the assessment was reopened under section 147 on account of non-disclosure of expenses incurred on cost of construction of building on lease hold building/land. AO alleged that the assessee failed to disclose truly and fully the particulars necessary for completing assessment made under section 143(3). However, Tribunal concluded that the reopening was a change of opinion and hence, would not be sustainable. Held: Assessee filed computation statement along with original assessment, which showed expenditure on construction of building on lease hold land/building and the same was specifically mentioned and claimed as revenue expenditure. Further, the assessment was completed after examining the computation statement and break-up details furnished by the assessee. Thus, after taking into consideration such facts and the fact that the assessment was reopened beyond a period of four years and also after considering the Proviso to section 147, the reopening was one of change of opinion as the assessee made a full disclosure of the expenditure and claimed the same as revenue expenditure. Accordingly, the reopening would not be sustainable.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

SUBSCRIBE FOR FULL CONTENT