M/s. Amruta Quarry Works, V. The Income Tax Officer, Sabarkantha Ward-4, Modasa

ITA 270/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94683 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L SHARMA
• Assessee Lawyers: M J SHAH
• Keywords: Depreciation; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 148; 143(3)

Judgement Text

ITA NO . 270 /AHD/ 20 1 5 ASSESSMENT YEAR: 2 0 08 - 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH , SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM ] ITA NO. 270 / AHD / 2 0 1 5 ASSESSMENT YEAR: 20 08 - 09 A MRUTA QUARRY WORKS, ....... .. . ..... APPELLANT AT. MOTIVENA CAMPA, TAL. DHANSURA, DISTT. ARVALI. [PAN AA CFP 0895 Q ] VS. INCOME T AX OFFICER, .... .................. .... .. RESPONDENT S.K. WARD 4, MODASA. APPEARANCES BY: M.J. SHAH FOR THE APPELLANT B.L. SHARMA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 1 ST , 201 5 DATE OF PRONOUNCING THE ORDER : NOVEMBER 12 TH , 2015 O R D E R 1. BY WAY OF THIS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 31 ST DECEMBER, 201 4 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 1 43(3) R.W .S. 147 OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) , FOR THE ASSESSMENT YEAR 20 08 - 09 , ON THE FOLLOWING GROUNDS: 1. THE CIT (APPEALS) ERRED IN NOT QUASHING THE REASSESSMENT NOTICE U/S. 148. 1. 2 THE CIT (APPEALS) OUGHT TO HAVE HELD THAT THE REASS ESSMENT PROCEEDINGS WERE WITHOUT ACQUIRING VALID JURISDICTION AND SHOULD HAVE QUASHED REASSESSMENT PROCEEDINGS AND THE ADDITIONS MADE IN SUCH PROCEEDINGS. 2 . THE CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.3,37,238/ - BEING THE ALLEGED EXCESS CLAI M OF DEPRECIATION MADE BY THE APPELLANT. ITA NO . 270 /AHD/ 20 1 5 ASSESSMENT YEAR: 2 0 08 - 09 PAGE 2 OF 4 2. THIS IS A C A SE OF REOPENED ASSESSMENT. THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 09.12.2010. SUBSEQUENTLY, ON 21.06.2013, THE ASSESSING OFFICER REOPENED T HE ASSESSMENT BY RECOR DING THE FOLLOWING REASONS : - IN THIS CASE THE ASSESSEE FILED HIS RETURN OF INCOME ON DECLARING NIL INCOME ON 17.09.2008. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS FINALISED U/S 143(3) OF THE I.T. ACT ON 09.12.2010 AT AN ASSESSED INCOME OF RS.3,23,980/ - AFTER ALLOWING THE SET OFF OF B/F LOSS OF RS.1,67,154/ - . SUBSEQUENTLY IT HAS BEEN OBSERVED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION OF RS.6,74,475/ - CLAIMED @ 30% ON BLOCK OF TRUCKS OF RS.24,32,500/ - . AS PER THE DETAILS SUBMITTED AND T HE P&L ACCOUNT SUBMITTED BY THE A SSESSEE WITH THE RETURN OF INCOME, THE ASSESSEE IS ENGAGED IN EXTRACTING AND SELLING STONE FROM QUARRY WORKS AND A LSO ENGAGED IN CARTING SALES OF THE TRUCKS. THE TRUCKS WERE USED FOR OWN BUSINESS AS WELL AS FOR PLYING ON H IR E . THE ASSESSEE HAS SHOWN QUARRY SALES OF RS.116,09,203/ - AND CARTING SALES OF TRUCKS AT RS.3,84,802/ - . THE ALLOWABLE DEPRECIATION ON TRUCK OTHER THAN THOSE USED ON HIRE WAS @ 15% OF THE V ALUE AND THE DEPRECIATION ON THE TRUCKS USED IN BUSINESS OF RUNN ING THEM ON HIRE, WAS @ 30%. THE A SSESSEE H A S USED THE TRUCKS FOR ITS OWN BUSINESS AS WELL AS FOR RUNNING THEM ON HI RE . NO INFORMATION REGARDING THE TRUCKS USED FOR IT S OWN BUSINESS A ND THE T RUCKS USED FOR RUNNING ON HIRE WAS FURNISHED. THE ASSESSEE WAS NOT ENTITLED FOR TH E DEPRECIATION @ 30% ON ALL THE TRUCKS, AS, ALL THE TRUCKS WERE NOT EXCLUSIVELY USED FOR RUNNING THEM ON HIRE, AND THE TRUCKS WERE ALSO USED FOR ASSESSEE FIRM S OWN BUSINESS. HENCE, TH E ASSESSEE HAS CLAIMED EXCESS DEPRECIATION OF 15% O N THE TRUCKS USED FOR THE PURPOSE OTHER THAN RUNNING ON HIRE. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT THE ASSESSEE H AS CLAIMED EXCESS DEPRECIATION OF RS.3,37,238/ - WHICH HAS BEEN ALLOWED. THERE I S AN ESCAPEMENT OF INCOME OF RS.3,37,238/ - . TH E A SSE SS MENT MADE U/S 143(3) OF THE I.T. ACT IS REQUIRED TO BE REOPENED. 3. THE ASSESSEE OBJECTED TO THE REOPENING, BY RAISING, INTER ALIA, FOLLOWING LEGAL ISSU E S : - THE ASSESSEE SUBMI T S THAT THE REOPENING IS BEING PROPOSED TO BE DONE OF A SCRUTINY ASS E SS MENT, WHICH WAS PASSED U/S. 143(3) BEYOND A PERIOD OF FOUR YEARS, AND HENCE, THE PROVISO TO SEC. 147 COMES INTO PLAY. AS PER THE REQUIREMENT OF T HE PROVISO, IT IS FOR YOUR GOOD S E LF TO PROVE THAT THE ASSESSEE HAD NOT DISCLOSED FULLY AND TRULY ALL MARITA L FACTS FOR THE PURPOSES OF ASSESSMENT. THE ASSESSEE SUBMITS THAT THERE IS NO SCOPE FOR YOUR GOODSELF TO HOLD THAT THERE WAS NO FULL AND TRUE DISCLOSURE OF ALL RELEVANT FACTS AND DETAILS FOR CLAIMING DEPRECIATION ON TRUCKS, AND HENCE, THIS BEING A REOPENI NG BEYOND A PERIOD OF FOUR YEARS, THE REASSESSMENT NOTICE ITSELF IS BAD IN LAW AND IS REQUIRED TO BE WITHDRAWN. ITA NO . 270 /AHD/ 20 1 5 ASSESSMENT YEAR: 2 0 08 - 09 PAGE 3 OF 4 THE ASSESSEE FURTHER SUBMITS THAT IT HAD MADE ITS CLAIM OF DEPRECIATION IN THE COMPUTATION OF INCOME AS WELL AS GIVEN RELEVANT BREAK - UP IN FORM NO. 3CD I.E. TAX AUDIT REPORT AND ANNEXED THE BREAK - UP OF THE OVERALL DEPRECIATION CLAIMED ON THE BLOCK OF ASSETS WHICH INCLUDED TRUCKS A S WELL AS TO THE SAID FORM NO.3CD . THE SAID DETAILS WERE CALLED FOR BY T HE THEN ASSESSING OFFICER IN ORIGINAL SCRUTINY ASSESSMENT AND ONCE AGAIN THESE DETAILS AND BREAK - UP WERE PROVIDED AND THE ASSESSING OFFICER AT THAT T IME ALSO HAD APPLIED HIS MIND ON THE CLAIM MADE BY THE ASSESSEE. THE ASSESSEE SUBMITS THAT THERE IS NO SCOPE OF ALLEGING THAT IT HAS NOT DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECE SS ARY FOR THE PURPOSES OF ASSESSMENT, AND HENCE, THE CONDITION PRECEDENT OF A VALID REOPENING NOTICE ITSELF IS NOT THERE IN THIS C A SE, AND THEREFORE, THE NOTICE IS BAD IN LAW AND REASSESSMENT SHOULD BE DROPPED ACCORDINGLY . THE ASSESSEE SUBMITS THAT ITS DUTY IS TO DISCLOSE PRIMARY FACE , WHICH IT HAS VERY CLEARLY DONE AND I N THIS CASE, ASSESSING OFFICER IN ORIGINAL SCRUTINY ASSESSMENT HAD ALSO CALLED FOR THESE DETAILS OF DEPRECATION . ON SUCH PRIMARY FACT BEING GIVEN, THE CO NCLUSION TO BE DRAWN ON THE SAID FACTS IS FOR THE ASSESSING OFFICER. IT IS NOT FOR THE ASSESSE E TO DRAW CONCLUSION ON THE FACTS FURNISHED BY IT. HENCE, THE DUTY OF THE ASSESSEE IS TO DISCLOSE FULLY AND TRULY A LL MATERIEL FACTS AS HAS BEEN DONE BY THE ASS ESSEE , AND THEREFORE ALSO, THE NOTICE IS B A D IN L A W A ND THE REASSESSMENT PROCEEDINGS SHOULD BE DROPPED. THE ASSESSEE SUBMITS THAT THEE REASSESSMENT PROCEEDING TAKEN UP BY YOUR GOODSELF WOULD AMOUNT TO MERE CHANGE OF OPINION ON THE SAME FACTS , WHICH WERE SCRUTINISED BY YOUR PREDECESSOR. THE ASSESSEE FURTHER SUBMITS THAT THE CHANGE OF OPINION IS NOT PERMISSIBLE FOR T HE PURPOSE OF R E OPENING A SCRUTINY ASSESSMENT, AND THEREFORE ALSO , THE NOTICE U/S. 148 IS BAD. THE A SSESSEE RELIES ON THE UNDER - MENTIONED CAS E LAWS WHICH LAY DOWN THAT REOPENIN G BEYOND A PERIOD OF FOUR YEARS CANNOT BE DONE WHERE THE ASSESSEE HAS DISCLOSED FULLY A ND TRULY ALL MATERIAL FACTS A ND ALSO THAT REOPENING CANNOT BE DONE ON MERE CHANGE OF OPINION. (I) (2010) 48 DTR 337 (GUJ) - GARDEN SIL K (II) (2011) 238 CTR 91 (GUJ) GUJAR A T POWER CORPORATION LIMITED (III) (2011) 337 ITR 203 (GUJ) PARLE SALES & SER V ICES (P) LD. CHANGE OF OPINION (2013) TAXMANN.COM 84 (GUJ) SIDDHI VINAYK TRANSPORT IN VIEW OF THE ABOVE MENTIONED CASE LAWS, IT BECOM ES VERY CLEAR THAT THIS IS NOT A FIT C A SE, WHEREIN REOPENING CAN BE SUSTAINED, AND HENCE, THE ASSESSEE PRAYS OF YOUR GOODSELF THAT THE REOPENING NOTICE MAY PLEASE BE DROPPED. ITA NO . 270 /AHD/ 20 1 5 ASSESSMENT YEAR: 2 0 08 - 09 PAGE 4 OF 4 4. THE S E OBJECTIONS WERE REJECTED BY THE ASSESSING OFFICER AS DEVOID OF ANY MERIT AND AS SUCH NOT ACCEPTABLE. HE THUS PROCEEDED TO COMPLETE THE REASSESSMENT PROC EE DINGS A ND RESTRICT TH E DEPRECIATION TO 15%. AGGRIEVED , ASSESSEE CARRIED THE MAT T ER IN APPE A L BEFOR E THE LD . CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATIS FIED A ND IS IN FURTH ER APPEAL BEFORE ME. 5. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 6. I FIND THAT IN THE CASES WHERE ASSESSMENTS ARE BEING REOPEN ED AFTER THE END OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR, AND WHERE ORIGINAL ASSESSMENT IS COMPLETED UNDER SECTION 143(3), IT IS SIN Q UA NON THAT THE ASSESSING OFFICER DEMONSTRATES THAT THERE WAS FAILURE ON THE PART OF THE ASSESSE E TO DISCLO SE ALL THE RELATED MATER IAL FACTS. NO SUCH EXERCISE HAS BEEN CARRIED OUT ON THE FACTS OF THE PRESENT CASE . I N THE REASONS RECORDED BY T H E ASSESSING OFFICER IT IS NOT EVEN HIS CASE THAT A NY MATERIAL FACT S WERE WITH HELD BY THE ASSESSEE. IN THIS VIEW OF TH E MATTER , I QUASH THE REASSESSMENT PROCEEDINGS. THE ASSESSEE GETS T HE RELIEF ACCORDINGLY. AS ASSESSMENT ITSELF IS QUASHED, I SE E NO NEED T O ADDRESS MYSELF TO MERITS OF THE CASE. THAT ASPECT OF THE MATTER IS INFRUCTUOUS AS NOW. 7 . IN THE RESULT, THE APPE AL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF NOVEMBER , 2015. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) AHMEDABAD, THE 12 TH DAY OF NOVEMBER , 2015 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD