Change of opinion cannot sustain reassessment on same property-sale income, ITAT holds

5-Second Takeaway

Reassessment was invalid because the Revenue sought to tax the same property-sale receipt as business income on the basis of material already examined in the original scrutiny assessment. The assessee had consistently shown the property as a fixed asset, and no fresh tangible material supported reopening.

The Tribunal considered a reassessment initiated after an audit objection sought to recharacterise income from the sale of property. In the original scrutiny assessment under section 143(3), the income had been accepted as long-term capital gains, and the property had been reflected consistently in the books as a fixed asset.

On those facts, the Tribunal held that the reopening rested on a mere change of opinion. The Revenue did not point to any fresh tangible material that had emerged after the original assessment and could justify reopening the completed assessment.

Because the very basis for reassessment was found to be invalid, the challenge to the reassessment succeeded. The Tribunal also treated the resulting dispute over the addition and the character of the receipt as academic.

The Commissioner (Appeals) order quashing the reassessment was upheld, and the Revenue’s appeal was dismissed.