Facets Gems Polishing Works Private Limited Vs DCIT (Gujarat High Court)
Conclusion: Re-opening of assessment on mere change of opinion without there being any live link or nexus with the material relied upon as during the regular assessment proceedings was not valid as AO had examined the claim under section 80IA(4)(iv) in detail by raising various queries which were duly answered by assessee.
Held: Assessee was engaged in diamond manufacturing, trading, and windmill power generation, had claimed deductions under sections 35DD and 80IA(4)(iv) during scrutiny assessment. Despite furnishing all details, AO issued a notice for reassessment, alleging income escapement related to the deduction under section 80IA. It was held that the reasons recorded for reopening would amount to mere change of opinion of AO without there being any live link or nexus with the material relied upon as during the regular assessment proceedings. AO had examined the claim under section 80IA(4)(iv) in detail by raising various queries which were duly answered by assessee. It was true that the specific query with regard to the issue pertaining to claim under section 80IA on account of amalgamation might not have been under consideration of AO however, the entire claim made by assessee for deduction under section 80IA was before AO which was processed while passing the assessment order under section 143(1)(3). Therefore, the notice for reopening issued beyond the period of four years could not be sustained.
