As regards issue of reopening is concerned, we find that during the assessment proceeding the assesse produced all the books of a/c with detail require by A.O., which have been dully examined & checked and discussed in the original assessment order. The detail chart of sale with stock transfer along with consolidate Audit balance sheet of Company head office Delhi and branch office / factory Pondicherry, which was dully filed during the assessment proceeding. The sale and stock transfer declare in the detail chart were dully verified from the Audit balance sheet of consolidated as well as individual of the company that is Head Office Delhi and branch office / factory Pondicherry. Even During the original assessment proceeding it was duly explained the difference in the stock transfer to branch and vice-versa and credited in the books of accounts There was difference of stock transfer to branch in the books of branch office which has shown credited their stock less by Rs. 29,65,101/-.
We find force in the assessee’s counsel version that because this unit is covered under Excise Act therefore to claim MODVAT as per excise law in the stock transfer. It segregated excise duty and CST in separate head in their books of account. We also find that a notice dated 4.4.2008 u/s 154/155 of I.T. Act was received for clarification of sales assessment year 2004-05 including stock transfer shown in the Balance Sheet and Profit & Losses Account filed from Delhi to branch Pondicherry, which contain element of stock transfer from Delhi to branch Pondicherry and vice- versa and in response thereto the assessee has filed the reply of the notice on 30.4.2008 explaining the detail of sale which contain detail element of transfer of stock and credited in the books of accounts which has been accepted by the Department and no further query was asked by the AO and sent the notice u/s. 147 on account of income escaping assessment when there is no reason to believe and concealment of fact i.e. Sales and Stock transfer it mere change of opinion after the original assessment completed.
We find that all the facts were duly discussed and verified, hence, there is no new facts or concealment of any facts as per section 147. The AO has wrongly added of Rs. 29,65,101/- in the original assessed income, in the reassessment proceeding frame u/s 148/147 when it contain only excise duty and CST charge on stock transfer from Head Office to Branch Office . The excise duty and CST is Govt. revenue which has been accounting in respective accounts as per excise act to claim MODVAT. In our considered opinion, this is a change of opinion case because the original assessment has been framed in the case of the assessee u/s. 143(3) of the I.T. Act on 28.12.2006, after making detailed enquiry and the AO has accepted the version of the assessee.
Therefore, we are of the considered view that assessee had made full and true disclosure during the original assessment proceedings. We are also of the view that reopening had been done merely on change of opinion in as much as that in the original assessment made u/s. 143(3) of the I.T. Act. We also find that AO has no fresh material to form his opinion regarding escapement of assessment and he has also not found any tangible material to record the reasons for reopening of the assessment of the assessee. It is a settled law that merely change of opinion is not permissible under the law. This view is supported by the Hon’ble Delhi High Court decision in the case of Commissioner of Income Tax vs. Usha International Ltd.  348 ITR 485 (Delhi) [Full Bench] and the decision of the Hon’ble Supreme Court of India in the case of CIT vs. Kelvinator of India Limited in Appeal Nos. 2009-2011 of 2003 reported in 320 ITR 561.
In view of the aforesaid facts and circumstances, as explained above and respectfully following the law laid down by the Hon’ble Supreme Court of India and Full Bench of the Hon’ble High Court of Delhi, as aforesaid, we are of the view that both the authorities below have gone wrong in deciding the reopening as valid. However, in view of the aforesaid discussions and the precedents relied upon, as aforesaid it is established that in the present case the issue reopening of assessment is incorrect and invalid. Therefore, we quash the orders of the authorities below on this legal issue and decide the same in favor of the assessee.