Co. Ltd., Mumbai v. Asst. Commissioner Of Income

Dmt IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO. 2788 OF 2011 ICICI Lombard General Insurance Co. Ltd., Mumbai. .. Petitioner. versus Asst. Commissioner of Income Tax 10-(1), Mumbai & Anr. .. Respondents. WITH WRIT PETITION (L) NO. 2789 OF 2011 ICICI Lombard General Insurance Co. Ltd., Mumbai. .. Petitioner. versus Asst. Commissioner of Income Tax 10-(1), Mumbai & Anr. .. Respondents. ..... Dmt Mr. Aarti Vissanji with Mr. S.J. Mehta for the Petitioner. Mr. Tajveer Singh for the Respondents. ...... CORAM : DR.D.Y.CHANDRACHUD & A. A. SAYED, JJ. 20 DECEMBER 2011. P.C. : Rule, by consent returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal. 2.The assessments of the Petitioner for Assessment Years 2006-07 and 2007-08 are sought to be reopened by a notice dated 28 March 2011 issued under Section 148 of the Income Tax Act, 1961. 3.Learned Counsel appearing on behalf of the assessee and the learned Counsel appearing on behalf of the Revenue state that the facts of the present writ petitions are similar to those of Writ Petition No. 2787 of 2911 which pertain to reopening of the assessment for AY 2004-05 save and except that in the present case the reopening is within a period of four years of the end of the relevant assessment years. 4.In the judgment delivered in the companion petition, this Court has set aside the reopening of the assessment for AY 2004-05, accepting the contention of the assessee that the basis on which the assessment is sought to be reopened, namely, that the assessee had not credited the amount realised on the sale of shares to the profit and loss account, is clearly incorrect. The Court has come to the conclusion that there was in fact a disclosure by the assessee and that the assessment order contains a discussion on the issue. In the present case, it is evident from the discussion contained in para 5.1 to 5.7 of the assessment order dated 21 December 2009 passed under Section 143 (3) that the Assessing Officer had applied his mind to the issue as to whether the assessee was entitled to a deduction on the gain on the sale of investment of Rs.53.48 crores and had come to the conclusion that the amount could not be allowed as claimed. A similar position holds in respect of the assessment year 2007-08 where the assessment order dated 27 December 2010 passed under Section 143 (3) specifically dealt with the issue in para 6.6.1. Accordingly, an amount of Rs. 43.34 crores representing profits on the sale of investments was disallowed and added to the income from insurance business other than the business of life insurance of the assessee. 5.Having regard to this position, the reasons which have been adverted to by the Court in allowing the petition for assessment year 2004-05 (save and except that relating to the reopening beyond four years) must equally apply to the facts of this case. The Assessing Officer has purported to reopen the assessment purely on the basis of a change of opinion and without there being any tangible material to do so. This is impermissible in view of the judgment of the Supreme Court in Commissioner of Income Tax v. Dmt . Kelvinator of India Ltd., [1] 6.Accordingly, Rule is made absolute by quashing and setting aside the notices dated 28 March 2011. There shall be no order as to costs. (Dr. D.Y. Chandrachud, J.) (A. A. Sayed, J.)