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| The Tax Publishers2020 TaxPub(DT) 3523 (Mad-HC) : (2020) 275 TAXMAN 0560 INCOME TAX ACT, 1961
Sectioln 147
During the course of scrutiny, AO called for several details and all the information was furnished by assessee and AO framed assessment after considering the same. Accordingly, reopening of assessment on the same set of facts was nothing but mere change of opinion which was not permissible under law and, therefore, reassessment order was set aside.
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Reassessment - Reason to believe - Change of opinion -
AO reopened assessment on the ground that total product development expenditure was a sum of Rs. 3 crore. Out of said amount, a sum of Rs. 1 crore was amortized towards product development expenditure and balance of Rs. 2 crores was claimed as deferred revenue expenditure, which was not allowable for deduction, however, AO wrongly allowed the deduction. Held: Product development expenditure incurred to the extent of Rs. 3 crore by assessee, was entitled to be amortized over the period of three years as per accounting practice adopted by the company and assessee had rightly amortized the same. Further, during the course of scrutiny, AO called for several details and all the information was furnished by assessee and AO framed assessment after considering the same. Accordingly, reopening was nothing but mere change of opinion which was not permissible under law and, therefore, reassessment order was set aside.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2007-08
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