Ayoki Fabricon Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 2155/PUN/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 6034 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-12-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIMIT GUJARATHI
• Keywords: Depreciation; Additional depreciation; Period of limitation; Question of law; Tangible material; Difference of opinion; Revised return; Change of opinion; Reassessment proceedings
• Section: 271(1)(c); 143(3); 32(1)(iia); 64; 32; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.2155/PUN/2016 / ASSESSMENT YEAR : 2009-10 AYOKI FABRICON PVT. LTD., 137 TO 139, AKSHAY COMPLEX, DHOLE PATIL ROAD, PUNE. PAN : AABCA5780F ....... / APPELLANT / V/S. DCIT, CIRCLE- 1(1), PUNE. / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI NIMIT GUJARATHI REVENUE BY : SHRI YOGESH KAMAT, ADDL.CIT / DATE OF HEARING : 20.12.2018 / DATE OF PRONOUNCEMENT : 31.12.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-1, PUNE DATED 14.06.2016 FOR THE ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF ADDITIONAL DEPRECIATION OF RS.1,10,53,748/- U/S 32(1)(IIA) ON NEW PLANT AND MACHINERY ON THE GROUND THAT THE ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. 2. THE LEARNED CIT(A) ERRED IN IGNORING THE FACT THAT I) THE DETAILS FURNISHED TO THE ASSESSING OFFICER BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 WERE SAME AS WERE FURNISHED DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) AND THEREFORE. 2 ITA NO.2155/PUN/2016 II) DISALLOWANCE WAS NOTHING BUT MERELY A CHANGE OF OPINION AS IT WAS NOT BASED ON ANY NEW MATERIAL OR FACTS AND THEREFORE THE SAID ASSESSMENT ORDER REQUIRED TO BE QUASHED. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ERECTION & FABRICATION OF SUGAR FACTORIES, CEMENT PLANT ETC. THE ASSESSEE ORIGINALLY FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4.58 LAKHS (ROUNDED OFF). IN THE SCRUTINY ASSESSMENT, THE ASSESSING OFFICER DETERMINED THE TOTAL INCOME AT RS.4,83,79,100/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ISSUED A SHOW-CAUSE NOTICE DATED 17.01.2011 ASKING FOR LIST OF DETAILS (PAGE 82 87 OF THE PAPER BOOK, ITEM NO.19 IS IMPORTANT AND THE SAME RELATES TO THE ISSUE OF DEPRECIATION U/S 32 OF THE ACT). IN REPLY, THE ASSESSEE FURNISHED VARIOUS DETAILS ON 20.07.2011 IN THE FIRST INSTALMENT AND 23.11.2011 IN THE SECOND INSTALMENT. REPLIES DATED 20.07.2011 AND 23.11.2011 ARE PLACED AT PAGE 60 TO 62 OF THE PAPER BOOK. THUS, THE BUSINESS DETAILS OF THE ASSESSEE AS WELL AS DEPRECIATION CLAIMED RELATE TO THE DETAILS WERE DEMANDED BY THE ASSESSING OFFICER FROM THE ASSESSEE AND THE ASSESSEE REPLIED THE SAME BEFORE THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 30.12.2011. HOWEVER, THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION ON THE AMOUNT OF DEPRECIATION/ADDITIONAL DEPRECIATION AS WELL AS THE CLAIM OF BUSINESS OF MANUFACTURING ACTIVITIES. SUBSEQUENTLY, THE ASSESSING OFFICER, ON EXAMINATION OF THE DEPRECIATION SCHEDULE AS ATTACHED TO THE BOOKS OF ACCOUNT WITH SPECIAL REFERENCE TO THE CLAIM OF ADDITIONAL DEPRECIATION OF RS.1,10,53,748/- U/S 32(1)(IIA) OF THE ACT, ISSUED NOTICE U/S 148 OF THE ACT ON 26.03.2014 AND ANOTHER 3 ITA NO.2155/PUN/2016 NOTICE U/S 148 OF THE ACT ON 14.08.2014 AFTER RECORDING REASONS. AT THE END OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HELD THE CLAIM OF MANUFACTURING ACTIVITIES OF THE ASSESSEE IS NOT PROPER. CONSEQUENTLY, THE CLAIM OF ADDITIONAL DEPRECIATION LINKED TO THE MANUFACTURING ACTIVITIES OF THE ASSESSEE WAS DENIED AND THE ASSESSING OFFICER MADE ADDITION OF RS.1,10,53,748/-. THE CONTENTS OF PARA 5.7 OF THE ASSESSMENT ORDER ARE RELEVANT TO EXTRACT AND THE SAME ARE AS FOLLOWS :- 5.7 FROM THE AFORESAID FACTS AND THE LEGAL POSITION, IT IS MANIFESTLY CLEAR THAT THE APPELLANTS ACTIVITY OF FABRICATION AND ERECTION CARRIED OUT DURING THE YEAR UNDER APPEAL DOES NOT AMOUNT TO MANUFACTURE OR PRODUCTION OF AN ARTICLE OR THING AS ENVISAGED IN SECTION 32(1)(IIA) OF THE I T ACT AND THEREFORE, THE ESSENTIAL CONDITION FOR CLAIMING ADDITIONAL DEPRECIATION THAT AS ON THE DATE OF INSTALLATION OF THE NEW PLANT & MACHINERY, THE ASSESSEE SHOULD ALREADY BE ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF AN ARTICLE OR THING, IS NOT SATISFIED. ACCORDINGLY, THE CLAIM OF ADDITIONAL DEPRECIATION AT RS.1,10,53,748/-, HEREBY DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. SINCE THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF ITS INCOME, SEPARATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT, 1961 ARE BEING INITIATED. 4. AGGRIEVED WITH THE SAID REASSESSMENT ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) RAISING THE LEGAL OBJECTION IN GROUND NO.1 AND QUESTIONING THE VALIDITY OF THE REASSESSMENT PROCEEDINGS AND ALSO THE GROUND ON CHANGE OF OPINION. 5. THE CIT(A) DISCUSSED THIS ISSUE IN PARA 4 OF HIS ORDER AND DISMISSED THE SAME AS PER DISCUSSION GIVEN IN PARA 5 OF HIS ORDER AND THE CONTENTS OF PARA 5 ARE RELEVANT TO EXTRACT AND THE SAME ARE AS FOLLOWS :- 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AS WELL AS REPLY OF THE APPELLANT. IN THIS CASE, IT IS SEEN THAT NOTICE U/S 148 OF THE I.T. ACT, 4 ITA NO.2155/PUN/2016 1961 WAS ISSUED ON 26/3/2014 WHICH IS WITHIN 4 YEARS FROM THE END OF THE ASSESSMENT YEAR 2009-10. THIS BEING SO, RIGOURS OF FIRST PROVISO OF SECTION 147 OF THE I.T. ACT, 1961 WILL NOT APPLY. COMING TO THE FACTS OF THE CASE, IT IS SEEN THAT THE ISSUE OF ADDITIONAL DEPRECIATION HAS NOT BEEN EXAMINED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE I.T. ACT, 1961. THE AO HAD ISSUED A QUESTIONNAIRE ON 17/1/2011 AS PER WHICH DETAILS OF ASSETS PURCHASED ON WHICH DEPRECIATION WAS CLAIMED WAS CALLED FOR AS PER QUESTION NUMBER 19. THIS QUESTIONNAIRE WAS ISSUED TO VERIFY THE CLAIM OF DEPRECIATION AND NOT ADDITIONAL DEPRECIATION FOR WHICH CERTAIN OTHER PARAMETERS LIKE ASSESSEE BEING ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THINS AS PER SECTION 32(1)(II) ARE TO BE APPLIED. IN THIS CASE IT IS SEEN THAT THE APPELLANT IS NOT ENGAGED IN THE BUSINESS OF MANUFACTURING AND PRODUCTION OF ANY ARTICLE OR THING. THE APPELLANT IS BASICALLY A CONTRACTOR WHICH IS ENGAGED IN THE BUSINESS OF ERECTION AND FABRICATION FOR WHICH GOODS ARE PROVIDED BY THE RESPECTIVE PARTIES. THIS IS ALSO EVIDENT FROM 3CD REPORT, WHERE THE APPELLANT HAS TICKED OTHERS COLUMN MENTIONING THE BUSINESS OF ERECTION AND FABRICATION. THIS SHOWS THAT THE APPELLANT HAS WRONGLY CLAIMED ADDITIONAL DEPRECIATION AND THEREFORE, IT IS HELD THAT THE AO MADE NO MISTAKE IN ASSUMING JURISDICTION U/S 147 OF THE I.T. ACT, 1961. ACCORDINGLY, GROUND NO.1 IS DISMISSED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL VIDE GROUND NO.2. 7. FROM THE ABOVE EXTRACTED GROUND NO.1, IT IS EVIDENT THAT THE ASSESSEE IS AGGRIEVED WITH THE DECISION OF THE CIT(A) WHO HELD THAT REASSESSMENT PROCEEDINGS IS NOT RESULTED OUT OF THE CHANGE OF OPINION OF THE ASSESSING OFFICER DURING THE REASSESSMENT PROCEEDINGS. THE ANOTHER LIMB OF GROUND RELATES TO SUSTAINABILITY OF THE PROCEEDINGS WHEN ASSESSING OFFICER DID NOT LIST THE DISCLOSURE OF THE MATERIAL FACTS WHILE REOPENING THE CONCLUDED ASSESSMENT UNDER PROVISION OF THE PROVISO TO SECTION 147 OF THE ACT. 5 ITA NO.2155/PUN/2016 8. EXPLAINING THE BACKGROUND FACTS OF THE CASE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT PROCEEDINGS WERE FINALIZED BY THE ASSESSING OFFICER, WHO PASSED THE WELL REASONED ORDER FOR THE EARLIER ASSESSMENT YEARS 2008-09, 2010-11 AND 2011-12. IN THESE ASSESSMENT YEARS, THE ASSESSEE MADE A SIMILAR CLAIM OF ADDITIONAL DEPRECIATION WHICH WAS DENIED BY HOLDING THAT THE ASSESSEES CLAIM OF ERECTION OF CEMENT AND SUGAR INDUSTRIES DOES NOT AMOUNT TO THE MANUFACTURING ACTIVITIES. TAKING CUE FROM THE SAID ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12, THE ASSESSING OFFICER REOPENED THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 ALSO. AS PER THE LD. AR, THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE SCHEDULE FURNISHED BY THE ASSESSEE IN THE RETURN OF INCOME ARE THE SOURCE MATERIAL FOR ASSESSING OFFICER TO ASSUME JURISDICTION U/S 147 OF THE ACT. STATING THAT THIS IS THE CASE OF REOPENING WITHIN THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR IN QUESTION, LD. COUNSEL SUBMITTED THAT THE TANGIBLE MATERIAL IS NOT ON THE RECORDS GATHERED BY THE ASSESSING OFFICER TO ASSUME THE JURISDICTION U/S 147 OF THE ACT VALIDLY. FOR THIS HE RELIED ON THE CONTENTS OF VARIOUS PARAGRAPHS OF THE REASSESSMENT ORDER. 9. ON THE ISSUE OF PRESENT REASSESSMENT PROCEEDINGS AS THE PRODUCT OF CHANGE OF OPINION, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE CONTENTS OF PAGE 82 OF THE PAPER BOOK I.E. LETTER DATED 17.01.2011 AND SUBMITTED THAT A QUESTIONNAIRE WAS ISSUED DURING THE REGULAR ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER AND SPECIFIC QUESTION WAS RAISED ON THE BUSINESS ACTIVITIES/DETAILS OF THE ASSESSEE AS WELL AS 6 ITA NO.2155/PUN/2016 DEPRECIATION DETAILS OF THE ASSESSEE. ITEM NO.19 OF THE SAID QUESTIONNAIRE, THE ASSESSING OFFICER PROVIDED A TABLE FOR REQUIRING THE ASSESSEE TO PROVIDE SPECIFIC DETAILS IN A SPECIFIED FORMAT ON THE SAME ISSUE. IN REPLY TO THE SAID QUESTIONNAIRE, THE ASSESSEE FURNISHED REQUISITE DETAIL VIDE LETTERS DATED 20.07.2011 AND 23.03.2011 GIVING SPECIFIC DETAILS ON THE ASSETS PURCHASED, DEPRECIATION CLAIMED AND ADDITIONAL DEPRECIATION TOO. FURTHER, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO VARIOUS PAGES OF THE PAPER BOOK TO DEMONSTRATE THE AVAILABILITY OF ALL THE REQUISITE DETAILS TO THE ASSESSING OFFICER WITH REGARD TO THE CLAIM OF DEPRECIATION, ADDITIONAL DEPRECIATION AND BUSINESS DETAILS OF THE ASSESSEE. FURTHER, HE ALSO BROUGHT OUR ATTENTION TO THE COMPUTATION OF INCOME WITH SPECIAL REFERENCE TO THE CLAIM OF DEPRECIATION AT PAGE 10 OF THE PAPER BOOK AND SUBMITTED THAT THE COMPUTATION OF INCOME GIVING THE DETAILS OF CLAIM OF ADDITIONAL DEPRECIATION, SPECIFIC REPLIES TO THE QUESTIONNAIRE AND ASSETS PURCHASED DURING THE YEAR ALONG WITH THE BILLS AND INVOICES ETC IN THE REGULAR ASSESSMENT PROCEEDINGS. IT IS UNDISPUTED FACT THAT THE ASSESSING OFFICER IS AWARE OF THE ACTIVITIES OF THE BUSINESS AND ALLOWABILITY OF THE CLAIM OF ADDITIONAL DEPRECIATION VALIDLY. 10. TURNING TO THE LEGAL PROPOSITION ON THIS KIND OF ISSUE RAISED BY THE ASSESSING OFFICER, LD. COUNSEL FOR THE ASSESSEE RELIED HEAVILY ON THE FOLLOWING DECISIONS OF THE TRIBUNAL AND JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN VARIOUS CASES :- (A) SUNITA M. RATHOD VS. DCIT, ITA NO.429/PN/2013 DT. 26.08.2014. 7 ITA NO.2155/PUN/2016 (B) CIT VS. AMITABH BACHCHAN, ITA NO.4646 OF 2010 DT. 05.07.2012. (C) STATE BANK OF INDIA VS. ACIT, W.P. NO.271 OF 2018 DT. 15.06.2018 11. MAKING A SPECIAL REFERENCE TO THE JUDGEMENT IN THE CASE OF STATE BANK OF INDIA (SUPRA), LD. COUNSEL FOR THE ASSESSEE READ OUT THE VARIOUS PARAGRAPHS TO DEMONSTRATE THE COMMONALITY OF THE EXISTING FACTS OF THESE CASES WITH THAT OF THE CASE DECIDED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF STATE BANK OF INDIA (SUPRA). 12. IN REPLY TO THE ABOVE DETAILS AS WELL AS LEGAL SUBMISSIONS MADE BY THE LD. COUNSEL, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). THE LD. DR ALSO MENTIONED THE FACT THAT THE TRIBUNAL CONFIRMED THE ASSESSING OFFICERS STAND ABOUT NON- MANUFACTURING ACTIVITIES STATUS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12. DECISION OF THE VALIDITY OF REASSESSMENT PROCEEDINGS. 13. WE HAVE HEARD BOTH THE SIDES ON THE LEGAL ISSUE OF VALIDITY OF THE REASSESSMENT PROCEEDINGS AND ALSO PERUSED THE ORDERS OF THE REVENUE AS WELL AS THE PAPER BOOK ON ONE SIDE AND THE JUDGEMENTS CITED (SUPRA) BY THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER. RELEVANT EXTRACTS ARE INSERTED AS FOLLOWS. COMING TO THE AVAILABILITY OF SPECIFIC DETAILS ON THE RECORDS EVIDENCING THE FORMATION OF AN OPINION ON THE CLAIM OF DEDUCTION :- 8 ITA NO.2155/PUN/2016 PAGE 10 OF THE PAPER BOOK COMPUTATION OF TOTAL INCOME NET PROFIT (LOSS) 72404162 ADD DEPRECIATION (CONSIDERED SEPARATELY) 30210728 LESS: DEPRECIATION ALLOWABLE U/S 32(1)(I) 47496693 PAGE 60 & 61 OF THE PAPER BOOK ITEM NO.4 : WE ARE IN THE BUSINESS OF ERECTION, COMMISSIONING OF CEMENT PLANTS, SUGAR PLANTS, BOILERS ETC., AND ARE CARRYING OUT ONLY WORKS CONTRACTS AND SUPPLY OF MANPOWER FOR THE EXECUTION OF WORKS. WE DO NOT SUPPLY ANY MATERIALS AND NO MANUFACTURING ACTIVITY IS BEING CARRIES OUT BY US. ITEM NO.19 : DETAILS OF ASSETS PURCHASED DURING THE YEAR ENCLOSED. PAGE 62 OF THE PAPER BOOK ITEM NO.2 : LEDGER EXTRACT AND SAMPLE COPIES OF BILLS ADDITIONAL DEPRECIATION ON PLANT & MACHINERY. PAGE 63 OF THE PAPER BOOK AYOKI FABRICON PRIVATE LIMITED SCHEDULE G SCHEDULE OF DEPRECIATION ON FIXED ASSETS AS PER I.T.ACT. SR NO. PARTICULRS W.D.V. ON 1-APR-08 ADDITIONS DURING THIS YEAR DEDUCTIONS TOTAL DEP. RATE DEPT. W.D.V. ON 31- MAR-09 BEFORE 30 TH SEP. AFTER 1 ST OCT. 1 PLANT & MACHINERY 137,157,148 59,679,138 10,485,423 - 207,321,709 15% 30,311,850 177,009,859.43 2 VEHICLE 9,852,457 2,626,805 - 202,950 12,276,322 15% 1,841,448 10,434,874 3 COMPUTERS 742,410 718,922 484,577 - 1,945,909 60% 1,022,172 923,737 4 FURNITURE 1,372,593 208,194 173,030 - 1,753,817 10% 166,730 1,587,087 5 OFFICE EQUIPMENT 929,034 568,579 482,285 - 1,979,898 15% 260,813 1,719,084 6 OFFICE PREMISES 2,089,328 7,003,768 - - 9,093,096 10% 909,310 8,183,787 TOTAL 152,142,981 70,805,406 11,625,315 202,950 234,370,751 34,512,323 199,858,428 AYOKI FABRICON PRIVATE LIMITED SCHEDULE G - I SCHEDULE OF ADDITIONAL DEPRECIATION ON FIXED ASSETS AS PER I.T.ACT. SR NO. PARTICULRS W.D.V. ON 1-APR-08 ADDITIONS DURING THIS YEAR DEDUCTIONS TOTAL DEP. RATE DEPT. W.D.V. ON 31- MAR-09 BEFORE 30 TH SEP. AFTER 1 ST OCT. 1 PLANT & MACHINERY - 59,679,138 10,485,423 - 70,164,561 20% 12,984,370 57,180,191 2 VEHICLE - - - - - 20% - - 3 COMPUTERS - - - - - 20% - - 4 FURNITURE - - - - - 20% - - 5 OFFICE EQUIPMENT - - - - - 20% - - 6 OFFICE PREMISES - - - - - 20% - - TOTAL - 59,679,138 10,485,423 - - 12,984,370 57,180,191 9 ITA NO.2155/PUN/2016 PAGE 64 OF THE PAPER BOOK AYOKI FABRICON PRIVATE LIMITED DETAILS OF ADDITIONAL DEPRECIATION OF PLANT & MACHINERY SL. NO. AMOUNT PARTICULARS 1. 600,000.00 MOBILE CRANE 2. 600,000.00 MOBILE CRANE 3. 600,000.00 MOBILE CRANE 4. 780,300.00 WELDING RECTIFIER 5. 852,800.00 WINCH MACHINE 6. 790,400.00 WINCH MACHINE 7. 790,400.00 WINCH MACHINE 8. 685,815.00 MOBILE CRANE 9. 685,815.00 MOBILE CRANE 10. 12,354,082.00 ZOOMLLON 11. 5,715,125.00 TM 230 CRANE 12. 772,335.00 MOBILE CRANE 13. 852,800.00 WINCH MACHINE 14. 26,520.00 FOGGING MACHINE 15. 578,340.00 WELDING RECTIFIER 16. 15,100,000.00 ZOOMLLON 17. 5,000,000.00 TRUCK MOUNTAIN CRANE 18. 650,000.00 MOBILE CRANE 19. 170,829.00 CUTTING MACHINE 20. 1,170,000.00 PLATE ROLLING MACHINE 21. 255,200.00 WELDING RECTIFIER 22. 1,334,938.00 TENT 23. 2,313,000.00 PORTA CABIN 24. 4,500,000.00 NCK CRANE 25. 782,608.00 FORT LIFT 26. 6,048,000.00 NCK CRANE 27. 1,350,000.00 PPM 40 TON CRANE 28. 2,000,000.00 TATA 955 CRANE 29. 1,455,000.00 TATA 955 CRANE BOOM 30. 1,027,400.00 TATA 955 CRANE COUNTER WEIGHT 31. 331,778.00 D G SET PAGE 82 OF THE PAPER BOOK ITEM NO.19 : DETAILS OF ASSETS PURCHASED DURING THE YEAR ON WHICH DEPRECIATION HAS BEEN CLAIMED ALONG WITH COPIES OF BILLS AND MODE AND DATE OF PAYMENT THEREOF AND DATE OF INSTALLATION WITH DOCUMENTARY PROOF FOR VERIFICATION IN A SEPARATE FOLDER. FURNISH THE DETAILS OF COMMISSION/BROKERAGE PAID, IF ANY, IN THE FOLLOWING PROFORMA: A) SR. NO. B) NAME AND ADDRESS OF PAN OF THE BROKER C) DESCRIPTION OF SHOP/FLAT D) SALE OF CONSIDERATION E) AMOUNT OF COMMISSION F) AMOUNT OF OUTSTANDING AT THE YEAR END G) BASIS OF PAYMENT PLEASE JUSTIFY THE RATES OF DEPRECIATION CLAIMED BY YOU. 10 ITA NO.2155/PUN/2016 THE ABOVE EXTRACTS FROM THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER DURING REGULAR ASSESSMENT PROCEEDINGS SUGGEST THE SCRUTINY OF THE CLAIM OF DEPRECIATION/ADDITIONAL DEPRECIATION, THE ISSUE UNDER CONSIDERATION BY THE ASSESSING OFFICER. 14. IN THE LIGHT OF THE ABOVE FACTS AND FIGURE, WE ALSO PERUSED THE DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US AND THE CONCLUSION PART OF THE SAID DECISIONS CITED (SUPRA) ARE EXTRACTED HEREUNDER :- (A) SUNITA M. RATHOD (SUPRA) : 10. ........ ........... 16. IN OUR CONSIDERED OPINION, THE AFORESAID SUBMISSIONS OF THE REVENUE ARE RELEVANT WHEN ONE IS TO EXAMINE THE PRINCIPLE OF CHANGE OF OPINION. HOWEVER, IN SO FAR AS THE PROPOSITION THAT THE ASSESSING OFFICER IS PRECLUDED FROM FORMING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT MERELY ON THE BASIS OF THE MATERIAL ALREADY AVAILABLE ON RECORD IS CONCERNED, THERE IS NO DISPUTE. NEVERTHELESS, EVEN AS PER THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DR. AMINS PATHOLOGY LABORATORY (SUPRA), RECEIPT OF SOME FRESH INFORMATION BY THE ASSESSING OFFICER IS A MUST IN ORDER TO INITIATE PROCEEDINGS U/S 147 OF THE ACT. FACTUALLY SPEAKING, IN THE PRESENT CASE THERE IS NO ARGUMENT PUT-FORTH FROM THE SIDE OF THE REVENUE TO SAY THAT ANY NEW TANGIBLE MATERIAL CAME TO THE NOTICE OF THE ASSESSING OFFICER IN ORDER TO INITIATE PROCEEDINGS U/S 147 OF THE ACT. THEREFORE, IN OUR CONSIDERED OPINION, THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT IN THE PRESENT CASE SUFFERED FROM A LEGAL INFIRMITY, WHICH IS IN CONSONANCE WITH THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SHRI AMITABH BACHCHAN (SUPRA). AS A RESULT, THE CONSEQUENT ASSESSMENT FINALIZED ON 15.12.2010 U/S 143(3) R.W.S. 147 OF THE ACT IS HEREBY QUASHED. (B) AMITABH BACHCHAN (SUPRA) : 8. BOTH THE COMMISSIONER OF INCOME TAX (APPEAL) AND THE TRIBUNAL HAVE CORRECTLY COME TO THE CONCLUSION THAT THERE WAS NO FRESH TANGIBLE MATERIAL BEFORE THE ASSESSING OFFICER TO REACH A REASONABLE BELIEF THAT THE INCOME LIABLE TO TAX HAS ESCAPED 11 ITA NO.2155/PUN/2016 ASSESSMENT. THE ORDER PASSED ORIGINALLY ON 29 TH MARCH 2005 UNDER SECTION 143(3) OF THE SAID ACT WAS PASSED AFTER THE RESPONDENT HAD MADE ADHOC CLAIM FOR EXPENDITURE AT 30% OF THE PROFESSIONAL RECEIPTS IN THE REVISED RETURN OF INCOME WHICH WAS LATER WITHDRAWN. IN FACT THE REASONS FOR REOPENING THE ASSESSMENT FOR THE YEAR 2002- 03 ITSELF RECORDS THAT THE CLAIM OF 30% ADHOC EXPENSES WAS WITHDRAWN WHEN THE RESPONDENT ASSESSEE WAS ASKED TO SUBSTANTIATE THE CLAIM. THEREFORE, THE SAME MATERIAL WAS A SUBJECT MATTER OF CONSIDERATION DURING THE PROCEEDINGS FOR ASSESSMENT LEADING TO ORDER DATED 29 TH MARCH, 2005. IN THE CIRCUMSTANCES THERE COULD NOT BE BASIS FOR THE ASSESSING OFFICER TO FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. IT IS A SETTLED POSITION OF LAW THAT REVIEW UNDER GARB OF REASSESSMENT IS NOT PERMISSIBLE. IN THE CIRCUMSTANCES, WE UPHOLD THE ORDER OF THE TRIBUNAL DATED 19 TH MARCH, 2010. 9. IN VIEW OF THE ABOVE, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION BY THIS COURT. APPEAL IS DISMISSED. NO ORDER AS TO COSTS. ( C) STATE BANK OF INDIA 6. ......... THEREFORE, IN THE PRESENT FACTS, WE ARE PRIMA-FACIE OF THE VIEW THAT, THE ASSESSING OFFICER HAS BY NECESSARY IMPLICATION ALLOWED THE CLAIM. MOREOVER, THE BASIC DOCUMENT FOR COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT IS THE COMPUTATION OF INCOME. THEREFORE, TO THE EXTENT THE CLAIMS MADE FOR DEDUCTION IN THE COMPUTATION OF COME, WERE DISALLOWED BY THE ASSESSING OFFICER, DISCUSSION ON THE SAME IS FOUND IN THE ASSESSMENT ORDER. IT IS AN ACCEPTED POSITION THAT THE ASSESSMENT ORDERS WOULD NECESSARILY DEAL ONLY WITH THE CLAIMS BEING DISALLOWED AND NOT WITH THE CLAIMS BEING ALLOWED. THIS IS FOR THE REASON AS OBSERVED BY THE GUJARAT HIGH COURT IN CIT VS. NIRMA CHEMICALS LTD 309 ITR 67, THAT IF THE ASSESSING OFFICER WAS TO DEAL WITH ALL THE CLAIMS WHICH WERE TO BE ALLOWED IN THE ASSESSMENT ORDER, THE RESULT WOULD BE AN EPICTOME. THIS IS SO, AS IT WOULD CAST AN IMPOSSIBLE BURDEN UPON THE ASSESSING OFFICER CONSIDERING HIS WORKLOAD AND THE PERIOD OF LIMITATION. THERE WAS ALSO NO REASON IN THE PRESENT FACTS FOR THE ASSESSING OFFICER TO ASK ANY QUERIES IN RESPECT OF THIS CLAIM OF THE PETITIONER, AS THE BASIC DOCUMENT VIZ. COMPUTATION OF INCOME AT NOTE 21 (ASSESSMENT YEAR 2013-14) AND NOTE 22 (ASSESSMENT YEAR 2014-15) THEREOF EXPLAINED THE BASIS OF THE CLAIM BEING MADE TO THE SATISFACTION OF THE ASSESSING OFFICER. THUS, IT MUST NECESSARILY BE INFERRED THAT THE ASSESSING OFFICER HAS APPLIED HIS MIND AT THE TIME OF PASSING AN ASSESSMENT ORDER TO THIS PARTICULAR CLAIM MADE IN THE BASIC DOCUMENT VIZ. COMPUTATION OF THE INCOME BY NOT DISALLOWING IT IN PROCEEDINGS UNDER SECTION 143(3) OF THE ACT AS HE WAS SATISFIED WITH THE BASIS OF THE CLAIM AS INDICATED IN THAT VERY DOCUMENT. THEREFORE, WHERE HE ACCEPTS THE CLAIM MADE, THE OCCASION TO ASK QUESTIONS ON IT WILL NOT ARISE NOR DOES IT HAVE TO BE INDICATED IN THE ORDER PASSED IN THE REGULAR ASSESSMENT PROCEEDINGS. THUS, ISSUING 12 ITA NO.2155/PUN/2016 THE IMPUGNED NOTICES ON THE ABOVE GROUND WOULD, PRIMA-FACIE, AMOUNT TO A CHANGE OF OPINION. 15. FROM THE ABOVE EXTRACTIONS FROM VARIOUS PAGES OF THE PAPER BOOK AS WELL AS ORDER OF THE ASSESSING OFFICER, IT IS AN INESCAPABLE CONCLUSION THAT THE ISSUE RELATING TO THE ADDITIONAL DEPRECIATION WAS EXAMINED BY THE ASSESSING OFFICER PROCURING SPECIFIC DETAILS FROM THE ASSESSEE BEFORE ALLOWING THE CLAIM OF THE ASSESSEE. WE HAVE ALSO PERUSED THE LEGAL PROPOSITION LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF STATE BANK OF INDIA CITED (SUPRA). IT IS CLEAR THAT MERE DISCLOSURE OF RELEVANT INFORMATION IN THE COMPUTATION OF INCOME ALONG WITH THE NOTES ATTACHED THERETO IS GOOD ENOUGH FOR ASSUMING THE FORMATION OF OPINION OF THE ASSESSING OFFICER ON THE ISSUE IN THE REGULAR ASSESSMENT. IT IS ALSO DECIDED ISSUE THAT THE ASSESSING OFFICERS FAILURE TO DISCUSS IN THE ORDER ABOUT THE ISSUES EXAMINED IN THE REGULAR ASSESSMENT ORDER AND NOT MADE ANY ADDITION DOES NOT GIVE RISE TO THE INFERENCE OF NOT FORMING OF AN OPINION ON THE SAID ISSUE. FURTHER, THE ABSENCE OF TANGIBLE MATERIAL ON THE HANDS OF THE ASSESSING OFFICER DOES NOT GIVE THE POWER TO THE AUTHORITY TO ASSUME JURISDICTION U/S 147 OF THE ACT VALIDLY. THEREFORE, WE ARE OF THE OPINION THAT CONCLUSION GIVEN BY THE CIT(A) IN PARA 5 ABOVE (SUPRA) IS REQUIRED TO BE REVERSED. CONSIDERING THE BINDING JUDGEMENTAL LAWS ON THE ISSUE OF INVOKING THE PROVISIONS OF SECTION 147 OF THE ACT IN CASE OF A REGULAR ASSESSMENT, THE ISSUE OF ADDITIONAL DEPRECIATION IN GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 13 ITA NO.2155/PUN/2016 16. CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE ON THIS LEGAL ISSUE, IN OUR OPINION, THE OTHER ADJUDICATION OF GROUNDS ON MERITS IS MERELY BECOME ACADEMIC EXERCISE AND, THEREOF, THE SAME ARE DISMISSED AS AN ACADEMIC EXERCISE. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 31 ST DAY OF DECEMBER, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 31 ST DECEMBER, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-1, PUNE. 4. THE PR. CCIT, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.