ITO CORPORATE WARD 3(4), CHENNAI vs. MURUGESAN CHELLAPPA, CHENNAI

Ld. DR before us submitted that the order passed by the CIT(A) is contrary to law holding therein that the reassessment proceedings was a change of opinion. Ld. DR drew our attention towards the relevant paras of the assessment order and submitted that when the assessee has claimed as interest expenses in the same years, it is not allowable while calculating the LTCG. Accordingly, the AO rightly made the reassessment u/s.147 of the Act. However, the CIT(A) has wrongly held the reassessment order as invalid on the ground of change of opinion, wherein there is no question of change of opinion arises. Therefore, ld. DR submitted that appeal of the revenue deserves to be allowed and order passed by the CIT(A) deserves to be set aside.

On the other hand, ld. AR of the assessee relied on the order of CIT(A) and submitted that the order passed by the CIT(A) is just and proper, which does not call for any interference.

We have heard rival submissions of the parties and perused the relevant material available on record. On careful perusal of the impugned order, we find that the CIT(A) while dealing with the issue has held that the AO has already examined and considered the facts CO No.48/Chny/2019 in the original assessment proceedings and again reopening the assessment on the same set facts amounts to change of opinion and accordingly the CIT(A) allowed the appeal of the assessee holding the reassessment proceedings made by the AO is not valid. The observations of the CIT(A) in para 9 read as under :- 9. In the instant case, it is seen that the assessee had declared all the of capital gain including sale consideration, cost of acquisition, indexed cost of acquisition including interest and other components. The long term capital gain had been examined by the Assessing Officer in the original assessment order passed. The assessment order had also been monitored by the Joint Commissioner of Income Tax. Subsequently, the assessing officer has reopened the assessment on the same set of issues which had been examined by the Assessing Officer in the original assessment order. The incidence of taxation or otherwise had already been considered by the Hon'ble ITAT in the case of C. Rama Brahmam with respect to claiming the interest as a cost in LONG TERM CAPITAL GAINS computation. If the Assessing Officer had any different opinion other than the one taken by his predecessor, he could have referred the matter ix] s 263 of IT Act. Instead the Assessing Officer has reopened the assessment on the same set of facts and circumstances which had been the subject matter of examination by the Assessing Officer m the original assessment proceedings. In view of the same, I am compelled to come to the conclusion that there has been a change of opinion and reassessment proceedings do get vitiated on account of this change of opinion. Moreover, the Assessing Officer has not been able to bring any fresh evidence on record before concluding that the taxable income has escaped assessment. Under the circumstances, I am compelled to hold that the reassessment proceedings are not valid. The grounds 1 and 2 with respect to assumption of jurisdiction accepted. There is no need to adjudicate other grounds taken.

From the above observations of the CIT(A), we do not see any good reason to interfere with the same. Even the ld. DR did not bring any cogent reason to controvert the above findings of the CIT(A). Accordingly, we uphold the findings recorded by the CIT(A) and dismiss the appeal of the revenue.