M/S. SPR & RG CONSTRUCTIONS P. LTD., CHENNAI V. ACIT, CORPORATE CIRCLE - 6 (2), CHENNAI

ITA 2334/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3713 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 16-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VIJAYA PRABHA
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Tangible material; Difference of opinion; Assessment record; Revised return; Reason to believe; Change of opinion
• Section: 143(3); 143(1); 201; 143(2); 13; 147; 148; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , ! ' # , $ %& BEFORE SHRI MAHAVIR SINGH , VICE PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBE R ./ ITA NO.2334/CHNY/2019 ' ( )( /ASSESSMENT YEAR: 2013-14 M/S. SPR & RG CONSTRUCTIONS PVT. LTD., NO.57, 1 ST FLOOR, NARAYANA MUDALI, SOWCARPET, CHENNAI 600 079. VS. THE ASST. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-6(2), CHENNAI. [PAN : AANCS 6296E ] ( *+ /APPELLANT) ( ,-*+ /RESPONDENT) *+ . / / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ,-*+ . / /RESPONDENT BY : MRS. VIJAYAPRABHA, JCIT 0 . 1$ /DATE OF HEARING : 25.02.2020 23) . 1$ / DATE OF PRONOUNCEMENT : 25.02.2020 %# / O R D E R PER SHRI MAHAVIR SINGH, VICE PRESIDENT : THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE O RDER OF CIT(A)- 15, CHENNAI, IN ITA NO. 62/2018-19/CIT(A)-15 DATED 31.05.2019. THE RE-ASSESSMENT ORDER WAS FRAMED BY ACIT, CORPORATE C IRCLE-6(2), CHENNAI FOR THE RELEVANT A.Y. 2013-14 VIDE ORDER DA TED 09.11.2018 ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 2 -: U/S. 143(3) R/W S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE REOPENING OF THE ASSESSMENT U/S. 147 R/W S. 148 OF THE ACT. FOR THIS THE ASSESSEE HAS RAISED THE FOLLOWING THREE EFFECTIVE G ROUNDS: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) - 15, CHENNAI DATED 31.05.2019 IN L.T.A.NO.62/2018-19/CIT (A)-15 FOR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSUMP TION OF JURISDICTION U/S 147 OF THE ACT AND CONSEQUENTLY ERRED IN SUSTAI NING THE RE- ASSESSMENT COMPLETED U/S 143(3) READ WITH SECTION 1 47 OF THE ACT WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE LACK OF TANGIBLE MATERIALS WOULD VITIATE THE ASSUMPTION OF JURISDICT ION U/S 147 OF THE ACT IN LIGHT OF THE ORIGINAL ASSESSMENT COMPLETED U/S 1 43(3) OF THE ACT AND FURTHER OUGHT TO HAVE APPRECIATED THAT THE PRESUMPT ION OF ESCAPEMENT OF INCOME IN THE HANDS OF THE APPELLANT SOLELY BASE D ON THE PERUSAL OF RETURN OF INCOME FILED ORIGINALLY SHOULD BE RECKONE D AS BAD IN LAW. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE-COMPA NY IS A CIVIL CONTRACTOR, BUILDER AND DEVELOPER. THE ASSESSEE-COM PANY FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2 013-14 ON 30.09.2013. SUBSEQUENTLY, THE ASSESSEE FILED A REVI SED RETURN ON 26.11.2013. THE ASSESSMENT WAS SELECTED FOR SCRUTIN Y UNDER CASS AND NOTICE U/S. 143(2) OF THE ACT DATED 03.09.2014 WAS SERVED AND ORIGINAL ASSESSMENT WAS COMPLETED BY DCIT, CORPORAT E CIRCLE-6(2), CHENNAI VIDE HIS ORDER DATED 31.03.2016 U/S. 143(3) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE CHALLENGED THE REOPENI NG. FIRST OF ALL HE ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 3 -: TOOK US THROUGH THE REASONS RECORDED WHICH READS AS UNDER (THE REASONS HAVE PROVIDED BY THE REVENUE ALSO): THE ASSESSEE IS A COMPANY DEALING WITH BUSINESS OF CIVIL CONSTRUCTION: IT FILED THE RETURN OF INCOME FOR THE AY 2013-14 ON 30/09/2013 DECLARING INCOME OF RS. 4,71,00,925/- SU CCESSIVELY A REVISED RETURN WAS FILED ON 26/11/2013 DECLARING GR OSS TOTAL INCOME OF RS. 4,75,00,518/-. THE ORDER U/S 143(3) WAS PASS ED ON 31/03/2016 WITH ASSESSED INCOME OF RS. 4,74,50,520/-. 2. PERUSAL OF SCHEDULE 30 OF THE PROFIT AND LOSS ST ATEMENT OF THE ASSESSEE REVEALS THAT THE ASSESSEE HAD CLAIMED AN A MOUNT OF RS. 1 6553,568/- AS AMORTISATION ON INTANGIBLE ASSETS. NO SUCH CLAIM WAS MADE IN THE PROFIT AND LOSS STATEMENT IN THE PREVIO US YEAR. THE PARTICULARS OF INTANGIBLE ASSETS HAVE BEEN PROVIDED BY THE ASSESSEE IN SCHEDULE 13 OF THE BALANCE SHEETS OF THE ASSESSE E. PERUSAL OF SCHEDULE 13 OF THE BALANCE SHEET OF THE ASSESSEE RE VEALS MODEL FLATS AND SITE OFFICE CONSTRUCTION EXPENSES HAVE B EEN STATED TO BE INTANGIBLE ASSETS. THE ASSESSEE WAS HAVING A CLOSIN G BALANCE FOR THE A.Y. 20 12-13 OF AN AMOUNT OF RS. 4,89,24,805/- . THE SAME IS THE OPENING BALANCE FOR THE A.Y 201 3-14. AN ADDITION O F RS. 7,35,898/- HAS BEEN MADE DURING THE YEAR. ON THIS THE ASSESSEE HAS CLAIMED AN AMORTISATION OF RS. 1,65,53,568/-. HOWEVER THE A MORTISATION WAS NOT CLAIMED ON THE INTANGIBLE ASSET DURING THE LAST A.Y I.E 201 2-13 EVEN THOUGH THE ASSET WAS PRESENT IN THE BOOKS OF T HE ASSESSEE. 3. UNDER THE INCOME-TAX ACT, THE TERM INTANGIBLE AS SETS HAS BEEN DEFINED U/S 32(1 )(II) OF THE ACT. INTANGIBLE ASSET S ARE KNOW-HOW, PATENTS, COPYRIGHTS, TRADE MARKS, LICENSES, FRANCHI SES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE. EX PENDITURE INCURRED ON MODEL FLATS AND SITE OFFICE CONSTRUCTION EXPENS ES DOES NOT AND WOULD NOT COME UNDER THE DEFINITION OF INTANGIBLE ASSETS AS DEFINED UNDER THE ACT. 4. THE PROVISIONS RELATED TO AMORTISATION HAVE ALSO BEEN PROVIDED U/S 35D, 35DD AND SECTION 35DDA OF THE ACT. PERUSAL OF THE THREE SECTIONS REVEALS THAT THE CONDITIONS MENTIONED FOR CLAIM OF AMORTISATION HAVE NOT BEEN FULFILLED BY THE ASSESSE E. THE CLAIM OF AMORTISATION IS NOT AVAILABLE ON MODEL FLATS AND S ITE OFFICE CONSTRUCTION EXPENSES UNDER THE ACT. 5. THE ASSESSEE HAS MADE AN INCORRECT CLAIM AND HAS REDUCED HIS INCOME AND HAD ACCORDINGLY UNDER PAID THE TAXES. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I HAVE R EASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AND THAT THE CAS E IS A FIT CASE FOR ISSUED OF NOTICE U/S 148 OF THE INCOME TAX ACT. ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 4 -: 6. APPLICABILITY OF THE PROVISIONS OF SECTION 14711 51 TO THE FACTS OF THE CASE: IN THIS CASE A RETURN OF INCOME WAS FILED FOR THE Y EAR UNDER CONSIDERATION AND REGULAR ASSESSMENT ULS 143(3)11-4 7 WAS MADE ON 3 1/03/2016. SINCE, 4 YEARS FROM THE END OF THE REL EVANT YEAR HAS NOT EXPIRED IN THIS CASE, THE ONLY REQUIREMENT TO INITI ATE PROCEEDING U/S 147 IS REASON TO BELIEVE WHICH HAS BEEN RECORDED AB OVE (REFER PARAGRAPHS 3, 4 & 5). IN VIEW OF THE ABOVE FACTS, THE PROVISIONS OF CLAUS E (C) OF EXPLANATION 2 TO SECTION 147 ARE APPLICABLE TO FACT S OF THIS CASE AND THE ASSESSMENT YEAR UNDER CONSIDERATION IS DEEMED T O BE A CASE WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSME NT. THIS CASE IS WITHIN FOUR YEARS FROM THE END OF THE SSESSMENT YEAR UNDER CONSIDERATION. HENCE NECESSARY SANCTION TO ISSUE THE NOTICE ULS 148 IS SOUGHT FROM JOINT COMMISSIONER OF INCOME TAX AS PER THE PROVISIONS OF SECTION 151 OF THE ACT. 4. THE LD. COUNSEL STATED THAT THESE REASONS WERE CONTESTED BEFORE THE ASSESSING OFFICER AND RAISED OBJECTIONS VIDE LETTER DATED 22.10.2018, WHEREIN IT WAS SPECIFICALLY POINTED OUT IN PARA 3.2.1 WHICH READS AS UNDER: 3.2.1 THE PROVISIONS OF SECTION 147 AS STATED ABOV E CLEARLY BRING OUT THE MEANING THAT THE AO SHOULD HAVE REASONS TO BELIEVE THAT CERTAIN INCOME HAS ESCAPED ASSESSMENT ON THE BASIS OF NEW FACTS 1 INFORMATION WHICH COME TO HIS NOTICE SUBSEQUENTLY . IT IS SETTLED THAT FOR TAKING AN ACTION UNDER SECTION 147 OF THE ACT, IT IS VITAL FOR THE AO TO HAVE VALID REASON(S) FOR REOPENING AN ASS ESSMENT AND SUCH REASONS SHOULD NOT BE BASED ON MERE CHANGE OF OPINION. THEREFORE, PROCEEDINGS UNDER SECTION 148 CANNOT BE INITIATED UPON A MERE CHANGE OF OPINION OF THE AO ON THE BASIS OF NEW VIEWS OR FRESH APPLICATION OF MIND BY THE AO ON THE SAME OR EXISTING SET OF FACTS. 5. THE LD. COUNSEL SUBMITTED THAT IN VIEW OF THE AB OVE AND THE REASONS RECORDED IT IS STATED THAT THE ENTIRE MATER IAL WAS BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PR OCEEDINGS AND HE HAS NOTED THE REASONS FROM THE BALANCE SHEET SCHEDU LE 30 OF THE ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 5 -: PROFIT AND LOSS ACCOUNT OF THE ASSESSEE THAT THE AS SESSEE HAS CLAIMED AN AMOUNT OF RUPEES 1,65,53,568/- AS AMORTIZATION O F INTANGIBLE ASSET. HE STATED THAT THE REASON NOTED BY THE ASSESSING OF FICER WHETHER SUCH CLAIM WAS MADE IN THE PROFIT AND LOSS ACCOUNT IN TH E PREVIOUS YEAR BUT PARTICULARS OF INTANGIBLE ASSET HAVE BEEN PROVIDED BY THE ASSESSEE IN SCHEDULE 13 OF THE BALANCE SHEET OF THE PREVIOUS YE AR. THE LD. COUNSEL SUBMITTED THAT IN VIEW OF THE ABOVE STATED FACTS IT IS CLEAR THAT THERE IS NO TANGIBLE MATERIAL FROM WHERE THE ASSESS ING OFFICER SHOULD HAVE FORMED REASON TO BELIEVE THAT CERTAIN INCOME H AS ESCAPED ASSESSMENT ON THE BASIS OF NEW FACTS. ACCORDING TO HIM, SINCE THERE IS NO INTANGIBLE MATERIAL OR NEW FACTS FROM WHERE IT H AS COME TO LIGHT THAT THE INCOME HAS ESCAPED ASSESSMENT AFTER ASSESSMENT FRAMED U/S. 143(3) ORIGINALLY VIDE ORDER DATED 31.03.2016. THE LD. COUNSEL DREW OUR ATTENTION TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ORIENT CRAFT LTD. [2013] 29 TAXMANN.COM 392 (DEL.) AND THE HONBLE MADRAS HIGH COURT IN THE CASE OF TANMAC IND IA VS. DY. CIT [2017] 78 TAXMANN.COM 155 (MAD.). THE LD. COUNSEL STATED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CI T VS. KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 (SC) WAS ALSO CONSIDE RED BY HONBLE MADRAS HIGH COURT IN THE CASE OF TANMAC INDIA (SUPR A) AND HELD AS UNDER: ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 6 -: 17. A DECISION OF THE DELHI HIGH COURT IN THE CASE OF ORIENT CRAFT LTD. (SUPRA) HAD OCCASION TO CONSIDER A SIMILAR QUESTION AND THE DIVISION BENCH, AT PAGE 546, HOLDS AS FOLLOWS; HAVING REGARD TO THE JUDICIAL INTERPRETATION PLACE D UPON THE EXPRESSION REASON TO BELIEVE, AND THE CONTINUED US E OF THAT EXPRESSION RIGHT FROM 1948 TILL DATE, WE HAVE TO UN DERSTAND THE MEANING OF THE EXPRESSION IN EXACTLY THE SAME MANNE R IN WHICH IT HAS BEEN UNDERSTOOD BY THE COURTS. THE ASSUMPTION O F THE REVENUE THAT SOMEHOW THE WORDS REASON TO BELIEVE HAVE TO BE UNDERSTOOD IN A LIBERAL MANNER WHERE THE FINALITY O F AN INTIMATION UNDER SECTION 143(1) IS SOUGHT TO BE DISTURBED IS E RRONEOUS AND MISCONCEIVED. AS POINTED OUT EARLIER, THERE IS NO W ARRANT FOR SUCH AN ASSUMPTION BECAUSE OF THE LANGUAGE EMPLOYED IN S ECTION 147; IT MAKES NO DISTINCTION BETWEEN AN ORDER PASSE D UNDER SECTION 143(3) AND THE INTIMATION ISSUED UNDER SECT ION 143(1). THEREFORE, IT IS NOT PERMISSIBLE TO ADOPT DIFFERENT STANDARDS WHILE INTERPRETING THE WORDS REASON TO BELIEVE VIS--VI S SECTION 143(1) AND SECTION 143(3). WE ARE UNABLE TO APPRECIATE WHA T PERMITS THE REVENUE TO ASSUME THAT SOMEHOW THE SAME RIGOROU S STANDARDS WHICH ARE APPLICABLE IN THE INTERPRETATIO N OF THE EXPRESSION WHEN IT IS APPLIED TO THE REOPENING OF A N ASSESSMENT EARLIER MADE UNDER SECTION 143(3) CANNOT APPLY WHER E ONLY AN INTIMATION WAS ISSUED EARLIER UNDER SECTION 143(1). IT WOULD IN EFFECT PLACE AN ASSESSEE IN WHOSE CASE THE RETURN W AS PROCESSED UNDER SECTION 143(1) IN A MORE VULNERABLE POSITION THAN AN ASSESSEE IN WHOSE CASE THERE WAS A FULL-FLE DGED SCRUTINY OR IS ACCEPTED WITHOUT DEMUR IS NOT A MATTER WHICH IS WITHIN THE CONTROL OF THE ASSESSEE; HE HAS NO CHOICE IN THE MA TTER. THE OTHER CONSEQUENCE, WHICH IS SOMEWHAT GRAVER, WOULD BE THAT THE ENTIRE RIGOROUS PROCEDURE INVOLVED IN REOPENING AN ASSESSMENT AND THE BURDEN OR PROVING VALID REASONS TO BELIEVE COULD BE CIRCUMVENTED BY FIRST ACCEPTING THE RETURN UNDER SE CTION 143(J) AND THEREAFTER, ISSUE NOTICES TO REOPEN THE ASSESSM ENT. AN INTERPRETATION WHICH MAKES A DISTINCTION BETWEEN TH E MEANING AND CONTENT OF THE EXPRESSION REASON TO BELIEVE I N CASES WHERE ASSESSMENTS WERE FRAMED EARLIER UNDER SECTION 143(3 ) AND CASES WHERE MERE INTIMATIONS WERE ISSUED EARLIER UN DER SECTION 143(1) MAY WELL LEAD TO SUCH AN UNINTENDED MISCHIEF . IT WOULD BE DISCRIMINATORY TOO. AN INTERPRETATION THAT LEADS TO ABSURD RESULTS OR MISCHIEF IS TO BE ESCHEWED. THE REASONS RECORDED BY THE ASSESSING OFFICER REACH ED THE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME ON GOING THROU GH THE RETURN OF INCOME FILED BY THE ASSESSEE AFTER HE ACCEPTED THE RETURN UNDER SECTION 143(1) WITHOUT SCRUTINY, AND NOTHING MORE. THIS IS NOTHING BUT A REVIEW OF THE EARLIER PROCEEDINGS AND AN ABUSE OF POWER BY THE ASSESSING OFFICER, BOTH STRONGLY DEPRECATED BY THE SUPREME COURT IN CIT V. KELVINATOR (SUPRA). ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 7 -: 6. HE ALSO DREW OUR ATTENTION TO THE PHASE REASON T O BELIEVE DISCUSSED BY HONBLE SUPREME COURT IN THE CASE OF C IT VS. KELVINATOR OF INDIA LTD. (SUPRA), WHILE INTERPRETING THE PROVI SIONS OF S. 147 WHICH HELD AS UNDER: WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENC E BETWEEN POWER TO REVIEW AND POWER TO REASSESS. T ASSESSING OFFICER HAS NO POWER TO REVIEW, HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN PRE-CONDI TIONS AND IF THE CONCEPT OF CHANGE OF OP ON IS REMOVED, AS CONTEND ED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF CHANGE OF OPINION AS AN IN-BUILT TEST TO CHECK ABUSE OF POWE R BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, THE ASSESSIN G OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LINK WITH THE FORMATION OF THE BELIEF. 7. ON THE OTHER HAND, THE LD. SR. DR STATED THAT TH E REASONS RECORDED ARE SUFFICIENT TO REOPEN THE ASSESSMENT AN D SHE STATED THAT THE REASONS ARE BASED ON EARLIER YEARS BALANCE SHEE TS AND NOT THIS YEARS BALANCE SHEET. IN REPLY, THE LD. COUNSEL STA TED THAT THE ASSESSING OFFICERS REASONS FOR REOPENING IS BASED ON THE PERUSAL OF SCHEDULE 30 OF THE PROFIT AND LOSS ACCOUNT OF THE A SSESSEE FOR THE RELEVANT YEAR, WHICH REVEALED THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS. 1,65,53,568/- AS AMORTIZATION OF INTA NGIBLE ASSETS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT THE ORIGINAL ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT VIDE ORDER DATED 31.03.2016 AND FROM THE ABOVE REPRODUCED ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 8 -: REASONS IT IS CLEAR THAT THE REASONS RECORDED ARE O N THE BASIS OF THE AUDITED ACCOUNTS OF THE ASSESSEE I.E., SPECIFICALLY PERUSAL OF SCHEDULE 30 OF THE PROFIT AND LOSS ACCOUNT AND ON THAT VERY BASIS THE REOPENING IS MADE. FROM THE ABOVE REASONS RECORDED, WHICH ARE REPRODUCED ABOVE, IT IS CLEAR THAT THE AO HAS REOPENED THE ASS ESSMENT BASED ON THE INFORMATION ALREADY AVAILABLE IN THE ASSESSMENT RECORD AT HIS DISPOSAL AND NOTHING NEW INFORMATION HAS COME TO HI S NOTICE BASED ON WHICH THE ASSESSMENT WAS REOPENED. WE ALSO NOTED T HAT THE CLAIM OF THE ASSESSE IN REGARD TO AMORTIZATION IN RESPECT OF MODEL FLATS AND SITE OFFICE CONSTRUCTION EXPENSES INCURRED BY THE ASSESS EE WITHOUT HAVING REGARD TO THE FACT THAT THE MODEL FLATS AND SITE OF FICE WAS DEMOLISHED AFTER THREE YEARS AND TILL SUCH PERIOD IT HAD PERSU ASIVE VALUE FOR DERIVING SALES OF THE ASSESSEE. EVEN THE CLAIM OF THE AMORTIZATION EVEN IF NOT ALLOWED THEN ALSO GIVEN THAT MODEL FLAT S AND SITE OFFICE CONSTRUCTION CLAIMED TO HAVE BEEN IN THE NATURE TEM PORARY ERECTIONS AND DEPRECIATION @ 100% IS TO BE ALLOWED AS PROVIDE D IN ENTRY-I(4) OF PART A TO NEW APPENDIX-I. WE NOTED THAT HONBLE SU PREME COURT IN THE CASE KELVINATOR OF INDIA LTD. (SUPRA) HAS INTER PRETED THE WORDS, REASON TO BELIEVE WHEREIN IT IS HELD THE SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE AO TO REOPEN THE ASSESSMENT ON THE BASIS OF MERE CHANGE OF OPINION FAILING TO GIVEN A SYSTEMATI C INTERPRETATION. IT WAS HELD THAT THERE IS CONCEPTUAL DIFFERENCE BETWEE N POWER TO REVIEW ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 9 -: AND POWER TO FRAME REASSESSMENT. IT WAS HELD THAT EVEN AFTER 01.04.1999 THE AO HAS POWER TO REOPEN THE ASSESSMEN T PROVIDED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSIO N THAT THERE IS ESCAPEMENT OF INCOME. IT WAS FURTHER HELD THAT THE RE CAN BE NO REVIEW ON AN ASSESSMENT IN THE GUISE OF REOPENING AND THAT A BEAR REVIEW WITHOUT ANY TANGIBLE MATERIAL, WHICH WOULD TANTAMOU NT TO ABUSE OF POWER. HENCE, IN THE GIVEN FACTS IN THE PRESENT CA SE, WE RESPECTFULLY THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F KELVINATOR OF INDIA LTD. (SUPRA) AND THE HONBLE MADRAS HIGH COUR T IN THE CASE OF TANMAC INDIA (SUPRA), QUASH THE REASSESSMENT AND AL LOW THE APPEAL OF THE ASSESSEE. 9. COMING TO THE MERITS OF THE CASE, SINCE WE HAVE QUASHED THE REASSESSMENT, WE NEED NOT TO GO INTO THE MERITS OF THE APPEAL. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON 25 TH DAY OF FEBRUARY, 2020 IN CHENNAI. SD/- SD/- ) (M. BALAGANESH) /ACCOUNTANT MEMBER ( ) (MAHAVIR SINGH) /VICE PRESIDENT /CHENNAI, 4% /DATED: 25 TH FEBRUARY, 2020 . EDN, SR. P.S ITA NO.2334/CHNY/2019 (A.Y 2013-14) M/S. SPR & RG CONSTRUCTIONS PVT. LTD. :- 10 -: %# . ,'15 65)1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 71 ( )/CIT(A) 4. 0 71 /CIT 5. 58' ,'1' /DR 6. '9( : /GF