S. 147 : Reassessment-After the expiry of four years-Builder stock in trade-Notional income-Reassessment notice on the basis of Judgement of Delhi High Court in Ansal Housing Finance and Leasing Company Ltd. (2013) 354 ITR 180 (Delhi)(HC) to assessee the income under section 23 of the Act was quashed. [S. 22, 23(5), 148, Art. 226]

The assessment of the petitioner was completed u/s. 143(3) of the Act. In the course of assessment proceedings specific question was raised as regards assessment of stock in trade on notional basis. The assessee has filed the detailed reply and no addition was made. The reassessment notice u/s 148 was issued after four years. In the recorded reason the Assessing Officer relied on Ansal Housing Finance and Leasing Company Ltd. (2013) 354 ITR 180 / 213 Taxman 143 (Delhi)(HC) and Emtici Engineering Ltd v ACIT (1997 ) 58 TTJ 27 (Ahd.)(Trib.). The objection of the assessee was rejected by the Assessing Officer.

On writ allowing the petition the Court held that when the assessment was completed the judgement of Delhi High court was available to the Assessing Officer. The reopening of assessment based on the change of opinion is held to be bad in law . Court relied on Aroni Commercial Ltd. v. Dy. CIT (2014) 362 ITR 403 / 224 Taman 13 (Bom.)(HC) wherein the Court held that once a query has been raised and it has been replied to the Assessing Officer is deemed to have applied his mind and considered the same even if the that issue has not been discussed in the assessment order. (WP No. 102 of 2022 dt. 27-1-2022) (AY. 2016-17)
Lokhanwala Construction Industries v. Dy. CIT (Bom.)(HC), www.itatonline.org
[CORAM : JUSTICE SHRI K. R. SHRIRAM & JUSTICE SHRI N. J. JAMADAR]