ITAT upheld CIT(A) order as reassessment was based on change of opinion of AO
ITAT upheld CIT(A) order as reassessment was based on change of opinion of AO
Assessee individual derived income from house property, business, capital gains and other sources, and admitted taxable income. Assessment was completed. Subsequently, AO noticed that income chargeable to tax had escaped assessment and made an additions for long term capital gains and loss on sale of asset. CIT(A) quashed reassessment proceedings. ITAT upheld CIT(A) order as reassessment was based on change of opinion of AO.-501204
1. Assessee individual derived income from house property, business, capital gains and other sources had filed his return of income for the AY 2008-09 admitting taxable income at Rs. 1,02,87,343/- and an order u/s 143(3) (of Income Tax Act, 1961) was passed accepting income returned by the assessee. Subsequently, the AO noticed that the income chargeable to tax had escaped assessment and, therefore, a notice u/s 148 (of Income Tax Act, 1961) was issued. Thereafter, a notice u/s 143(2) (of Income Tax Act, 1961) was issued and after hearings with the assessee, the assessment was completed by AO u/s 143(3) (of Income Tax Act, 1961) rws 147 (of Income Tax Act, 1961) by making an addition of Rs. 91,01,026 and Rs. 33,038/- on account of income from Long term capital gains treated as business income and loss on sale of asset respectively.
2. CIT(A) quashed the reassessment proceedings.
3. On Revenue's appeal, the ITAT held as under:
" It was also held in the case of Tractbel Industry Engg. Vs. Asst. DIT [2011] 64 DTR 344 (del.), during the course of original assessment proceedings, the assessee was called upon to give information and details regarding the nature of business activities in India, it was stated in the letter that the assessee does not have any PE in India. AO in original assessment accepted the contention of assessee. Reassessment on the ground that the assessee had PE in India on the same facts was held to be not justified and liable to be quashed. In the present case also, the AO had accepted the contention of assessee i.e. treating the income as 'capital gains' and the source of income was reassessed and intended to treat the income as business income. It clearly establishes that the AO has changed his opinion, therefore, the reopening of assessment deserves to be quashed.”
Case Reference - Dy. Commissioner of Income Tax vs. Sri P. Vara Prasad Rao.
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "A", HYDERABAD
BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA No. 763/Hyd/2015
Assessment Year: 2008-09
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