When on consideration of material fact one view is exclusively taken by the Assessing Officer it would not be open to re-open the assessment based on the very same material with a view to take another view

The Assessee is in the business of developing and running a shopping mall at Lucknow. Assessee had constructed the mall and then licensed the premises in the mall to various parties who are utilizing the space in the mall to set up their shops, restaurants etc.
Assessee had shown its rental income from shops under head ‘Income from House Property’ and income from other services under head ‘Income from Business and Profession’.
Assessing Officer completed assessment by making additions of some amount in total income. Thereafter, the new Assessing officer noted that other services were inseparably connected to letting out of building by Assessee and Assessee was not running any separate business to account for these receipts as business receipts and he initiated reassessment. Therefore, the writ petition has been filed by the Assessee.

According to department, the Assessee had shown other service charges under head ‘Income from Business and Profession’. These other service charges include various miscellaneous services such as lift, air conditioning, security etc. provided in the mall.
However, these services are inseparably connected to letting out of the building by the Assessee and Assessee is not running any separate business to account for these receipts as business receipts.
Hence, the department contented that, these receipts should be a part of income under the head house property only

The Assessee had provided all details including copies of agreements and party wise details of the total contractual receipt during the assessment proceedings. Further, the Assessee had also submitted that it was charging depreciation only on assets which are used for maintenance of the mall and no depreciation has been charged on the building, as rental income is taxed under the head “Income from House Property”
The Assessee also contented that they thought it necessary to give all the details above only in support of their view that impugned notice is only based on change of opinion and not due to any failure on the part of the Assessee to fully and truly disclosing all material facts.

The court is satisfied that the Assessee had fully and truly disclosed all material facts necessary for the purpose of assessment which are wrongfully alleged as not disclosed fully and truly
Further, not only material facts were disclosed by Assessee truly and fully but they were carefully scrutinized and figures of income as well as deduction were reworked carefully by the Assessing Officer
The court after going through the same and examining the question of legality thereof quash, cancel and set aside the impugned notice and the order

Case Law: Upal Developers (P.) Ltd. v. Deputy Commissioner of Income-Tax, Range-6(2)

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