Appeal details
Counselvise Citation
[2016] 121 COUNSELVISE.COM (IT) 3275 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 year(s) 8 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-01-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
F
Next Hearing Date
01-04-2014
Assessment Year
2001-2002
Appeal Filed On
19-05-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.3417/M/2009 & CO NO.201/M/2012 ASSESSMENT YEARS: 2001-02 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.), M.G. ROAD, FORT, MUMBAI 400 001 PAN: AAACV2808C VS. ADDL. CIT, RANGE 1(3), MAHARSHI KARVE ROAD, MUMBAI 400 020 (APPELLANT) (RESPONDENT) ITA NO.3326/M/2009 ASSESSMENT YEARS: 2001-02 ADDL. CIT, ROOM NO.540/564, 5 TH FLOOR, M.K. ROAD, NEW MARINE LINES, MUMBAI 400 020 VS. M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.), M.G. ROAD, FORT, MUMBAI 400 001 PAN: AAACV2808C (APPE LLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI DINESH VYAS, A.R. REVENUE BY : SHRI G.M. DOSS, D.R. DATE OF HEARING : 13.01.2016 DATE OF PRONOUNCEMENT : 29.01.2016 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THESE CROSS APPEALS AND CO ARE DIRECTED AGAINST CON SOLIDATED ORDER OF LD. CIT(A)-XXI, MUMBAI DATED 20.03.09 PERTAINING TO ASSESSMENT YEAR 2001- 02. 2. AT THE OUTSET, WE WILL TAKE UP ASSESSEES APPEAL IN ITA NO.3417/M/2009. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 2 BEING AGGRIEVED BY THE ORDER DATED MARCH 20, 2009 PASSED UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT), BY THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) - XXI, MUMBAI, [HEREINAFTER REFERRED TO AS THE CIT(A)], TH E APPELLANT SUBMITS THE FOLLOWING GROUNDS OF APPEAL FOR YOUR SYMPATHETI C CONSIDERATION: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THAT THE GATE WAY DIGITAL SWITCH (GDS) IS NOT 'COMPUTER' WITHIN THE M EANING OF ENTRY 111(5) OF APPENDIX I TO THE INCOME-TAX RUL ES,1962 AND THEREBY RESTRICTING RATE OF DEPRECIATION TO 25% AS APPLICABLE TO THE GENERAL CATEGORY OF 'PLANT & MACH INERY' ON THE WRITTEN DOWN VALUE OF GDS AMOUNTING TO RS.51,78 ,15,649/- INSTEAD OF ALLOWING 60% AS APPLICABLE TO 'COMPUTER' . 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN RESTRICTING DEPRECIATIO N TO 25% (APPLICABLE TO THE GENERAL CATEGORY OF PLANT & MACHINERY) INSTEAD OF 60% CLAIMED BY THE APPELLANT ON THE INCIDENTAL CHARGES OF RS.2,00,60,320/- PAID FOR INSTALLATION AND COMMISSIONING OF HIGHLY INTEGRATED AND SOPHISTICATED COMPUTERISED BILLING AND ACCOUNTING S YSTEM VIZ., 'INTERCONNECT SYSTEM - TRAFFIC ACCOUNTING SYSTEM' C OMPRISING OF HARDWARE AND SOFTWARE WHICH IN THE IMPUGNED APPELLATE ORDER ITSELF HAS BEEN UPHELD AS QUALIFYIN G TO BE 'COMPUTER' BY THE LEARNED CIT(A) AND CONSEQUENTL Y DEPRECIATION HAS BEEN ALLOWED THEREON @ 60% BY THE LEARNED CIT(A). 3) IT IS PRAYED THAT THE ASSESSING OFFICER MAY KIND LY BE DIRECTED TO GRANT INTEREST UNDER SECTION 244A ON TH E REFUND, IF ANY ARISING OUT OF ABOVE GROUNDS, IN ACCORDANCE WITH THE LAW. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW THE GROUNDS OF APPEAL HEREIN AND TO SUBMIT SUCH STA TEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPELLATE HEARING. 3. IN ADDITION TO THE ABOVE SAID GROUNDS RAISED IN THE MEMORANDUM OF APPEAL, ON 27.07.12 ASSESSEE HAS FILED A PETITION B EFORE THE TRIBUNAL SEEKING PERMISSION TO URGE THE FOLLOWING ADDITIONAL GROUNDS CHALLENGING THE VALIDITY OF NOTICE ISSUED UNDER SECTION 148 AND THE REASSESSMEN T PROCEEDINGS UNDER SECTION 147 OF THE ACT. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE NOTICE DATED MARCH 30, ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 3 2006 ISSUED UNDER SECTION 148, THOUGH ISSUED WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IS AB INITO VOID AND BAD IN LAW AND THEREFORE, THE REASSESSMENT PROCEEDINGS DESERVE TO BE QUASHED ON T HE FOLLOWING COUNTS - NO NEW I TANGIBLE MATERIAL HAS BEEN BROUGHT ON RECORD AT THE TIME OF REASSESSMENT; - THE REASSESSMENT IS BASED ON MERE CHANGE OF OPIN ION. THE APPELLANT PRAYS THAT THE NOTICE ISSUED UNDER SE CTION 148 DATED MARCH 30, 2006 BE QUASHED AND ENTIRE REASSESSMENT PROCEEDINGS HELD TO BE AB INITIO VOID AND BAD IN LAW. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR WITHDRAW THE ABOVE GROUND OF APPEAL AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. AS THE ISSUE RAISED BY THE ASSESSEE IN THE ADDITION AL GROUNDS ARE PURELY LEGAL ISSUES AFFECTING THE JURISDICTION OF THE AO, HENCE, GOES TO THE ROOT OF THE, WE PROPOSE TO DISPOSE OF THE ADDITIONAL GROUNDS AT THE FIRST INSTANCE. 4. THE LD. D.R. HAS RAISED A PRELIMINARY OBJECTION THAT THE ASSESSEE HAVING NOT RAISED THE ISSUE RELATING TO VALIDITY OF THE AS SESSMENT EITHER AT THE ASSESSMENT STAGE OR BEFORE THE FIRST APPELLATE AUTH ORITY IT CANNOT BE ENTERTAINED AT THIS STAGE UNLESS THE ASSESSEE SHOWS SUFFICIENT CAUSE FOR HAVING NOT RAISED THE GROUND IN COURSE OF EARLIER PROCEEDING. 5 THE LD. SR. COUNSEL CONTESTING THE ARGUMENT OF LD . D.R. SUBMITTED THAT THE VALIDITY OF REOPENING OF THE ASSESSMENT UNDER S ECTION 147 BEING A PURELY LEGAL AND JURISDICTIONAL, ISSUE CAN BE RAISED AT AN Y STAGE AS FACTS RELATING TO SUCH ISSUE ARE AVAILABLE ON RECORD AND DO NOT REQUIRE GO ING INTO NEW FACTS. THEREFORE, RELYING UPON CERTAIN JUDICIAL PRECEDENTS AS REFERRED TO IN THE PETITION DATED 27.07.12 LD. SR. COUNSEL FOR THE ASSESSEE PLE ADED FOR ADMISSION OF THE ADDITIONAL GROUNDS. 6. HAVING CONSIDERED THE SUBMISSIONS OF THE LD. COU NSELS VIS--VIS THE FACTS AND MATERIALS ON RECORD AS WELL AS JUDICIAL P RONOUNCEMENTS CITED BEFORE ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 4 US WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUNDS BEING PURELY LEGAL ISSUES AND GOING TO THE ROOT OF THE MATTER AS IF AFFECTS THE VERY JURISDICTION OF THE ASSESSMENT PRO CEEDING, THE ASSESSEE IS ENTITLED TO RAISE SUCH AN ISSUE EVEN AT THIS STAGE OF THE PROCEEDING. FURTHER, WE ARE INCLINED TO ENTERTAIN THE ADDITIONAL GROUNDS RA ISED BY THE ASSESSEE AS THEY DO NOT REQUIRE GOING INTO FRESH FACTS AND CAN BE DE CIDED ON THE BASIS OF FACTS AND MATERIALS ALREADY AVAILABLE ON RECORD. FOR COM ING TO SUCH CONCLUSION WE RELY UPON THE DECISIONS OF THE HONBLE SUPREME COUR T IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. 229 ITR 383 & JUTE CORPORA TION OF INDIA 187 ITR 688 AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD. (2012) 349 ITR 336 (BOM.). 7. HAVING HELD SO, WE WILL DEAL WITH THE FACTS OF T HE CASE. BRIEFLY STATED, THE ASSESSEE DURING THE RELEVANT PERIOD WAS A GOVER NMENT OF INDIA COMPANY IN THE NAME AND STYLE OF VIDESH SANCHAR NIGAM LTD. FO R THE ASSESSMENT YEAR UNDER CONSIDERATION ASSESSEE HAD FILED ITS RETURN O F INCOME ON 31.10.01 DECLARING TOTAL INCOME OF RS.1972,05,06,220/-. SUB SEQUENTLY, ASSESSEE FILED A REVISED RETURN OF INCOME ON 31.03.03 DECLARING TOTA L INCOME OF RS.1869,68,46,000/-. ASSESSMENT IN CASE OF THE ASS ESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 25.11.03 DETERMINING THE TOTAL INCOME OF RS.2283,11,94,609/-. SUBSEQUENTLY, AS IT APPEARS, ON VERIFYING THE ASSESSMENT RECORDS THE AO FORMED AN OPINION THAT TH E ASSESSEE HAS CLAIMED EXCESS DEPRECIATION BY TREATING CERTAIN ASSETS AS C OMPUTERS INSTEAD OF PLANT & MACHINERY. ACCORDINGLY, AFTER RECORDING REASONS FO R FORMATION OF BELIEF THAT INCOME HAS ESCAPED ASSESSMENT OR HAS BEEN UNDER ASS ESSED, AO ISSUED A NOTICE UNDER SECTION 148 OF THE ACT ON 30.03.06. DURING T HE REASSESSMENT PROCEEDINGS, THOUGH, THE ASSESSEE OBJECTED TO THE P ROPOSED DISALLOWANCE OF DEPRECIATION ON GDS AND INTERCONNECT TAX AUDIT SYST EM (TAS) CLAIMING THEM ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 5 TO BE PART OF COMPUTER SYSTEM, HENCE, ELIGIBLE FOR DEPRECIATION AT THE RATE OF 60% AND IN SUPPORT OF SUCH CLAIM FURNISHED AN OPINI ON FROM A TECHNICAL EXPERT BUT THE AO WAS NOT CONVINCED WITH THE SAME. HE OBS ERVED THAT GDS SYSTEM DOES NOT PROCESS ANY DATA OR GENERATE ANY NEW ENTIT Y. HE THEREFORE HELD THAT GDS IS TO BE TREATED AS PLANT & MACHINERY AND NOT C OMPUTER AND THE PROPER RATE FOR DEPRECIATION IS 25% WHICH WAS ALSO THE DEC ISION BY THE AO IN THE ASSESSMENT YEAR 2000-01. SIMILARLY, THE AO ALSO HE LD THAT INTERCONNECT SYSTEM TAS IS ALSO NOT COMPUTER BUT PART OF PLANT & MACHIN ERY, HENCE DEPRECIATION AT THE RATE OF 25% IS ALLOWABLE. ACCORDINGLY, HE COMP LETED THE ASSESSMENT. BEING AGGRIEVED OF SUCH DECISION OF THE AO ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 8. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DURING THE APPELLATE PROCEEDINGS DISALLOWED ASSESSEES CLA IM OF DEPRECIATION AT THE RATE OF 60% BY TREATING IT AS A COMPUTER AS FAR AS GDS IS CONCERNED. AS FAR AS INTERCONNECT SYSTEM TAS IS CONCERNED, LD. CIT(A) AF TER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FACTS AND MATERIALS ON RECORD OBSERVED THAT THE SAME IS NOTHING BUT A COMBINATION OF COMPUTER SYSTE M AND SOFTWARE. HE OBSERVED, HARDWARE OF INTERCONNECT TAS CONSISTING O F INPUT/OUTPUT, STORAGE AND PROCESSING DEVICES QUALIFIES AS COMPUTER. HE A LSO OBSERVED THAT SOFTWARE IS ALSO AN INTEGRAL PART OF COMPUTER SYSTEM. FURTH ER, HE NOTICED THAT THE ASSESSEE HAS NOT CLAIMED ENTIRE SOFTWARE EXPENDITUR E AS REVENUE. HE THEREFORE HELD THAT THE ASSESSEE WOULD BE ENTITLED FOR DEPREC IATION ON HARDWARE AND SOFTWARE SYSTEMS OF TAS. HOWEVER, HE FOUND THAT TH ERE IS ALSO ANOTHER COMPONENT TO THE VALUE OF THE WDV OF THE TAS SYSTEM VIZ. INSTALLATION AND COMMISSIONING EXPENSES OF RS.2,00,60,320/-. AS FAR AS THIS COMPONENT OF EXPENDITURE IS CONCERNED, LD. CIT(A) OBSERVED THAT ASSESSEE HAS NOT FURNISHED DETAILS TO PROVE THAT THESE EXPENSES ARE PURELY IN THE NATURE OF LABOUR AND CONSULTANCY CHARGES FOR INSTALLATION OF HARDWARE AN D SOFTWARE, HENCE, THEY ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 6 CANNOT BE CONSIDERED TO BE PART OF COMPUTER EXPENSE S. HE THEREFORE UPHELD THE ALLOWANCE OF DEPRECIATION AT THE RATE OF 25% BY AO TREATING THE SAME AS PLANT & MACHINERY. BEING AGGRIEVED OF THE AFORESAID DECI SION OF THE LD. CIT(A), THE ASSESSEE IS BEFORE US. THE DEPARTMENT HAS ALSO PREF ERRED AN APPEAL CHALLENGING THE PARTIAL RELIEF GRANTED BY THE LD. CIT(A) WHICH WILL BE DEALT WITH AT THE APPROPRIATE STAGE WHILE DEALING WITH DEPARTMENTS A PPEAL. 9. LD. SR. COUNSEL, SHRI DINESH VYAS APPEARING FOR THE ASSESSEE SUBMITTED, THE REOPENING OF ASSESSMENT IS INVALID AS NO NEW TA NGIBLE MATERIAL HAS BEEN BROUGHT ON RECORD AT THE TIME OF REOPENING OF THE A SSESSMENT/RECORDING OF REASONS. THE LD. SR. COUNSEL REFERRING TO THE REAS ONS RECORDED, COPY OF WHICH IS PLACED AT PAGE 2 OF THE PAPER BOOK, SUBMITTED A REFERENCE TO THE REASONS RECORDED WOULD SHOW THAT THE AO HAS NO NEW MATERIAL OR INFORMATION AVAILABLE WITH HIM FOR FORMATION OF BELIEF THAT INCOME HAS ES CAPED ASSESSMENT. HE SUBMITTED, THE AO ONLY REVIEWING OR REVISITING THE MATERIALS AVAILABLE ON RECORD WHICH WERE CONSIDERED AT THE TIME OF ORIGINA L ASSESSMENT PROCEEDINGS HAS REOPENED THE ASSESSMENT. FURTHER, EXPLAINING L D. SR. COUNSEL SUBMITTED, IN THE TAX AUDIT REPORT FILED BY ASSESSEE ALONG WIT H THE RETURN OF INCOME IN COMPLIANCE TO SECTION 44AB OF THE ACT ALL MATERIALS /INFORMATIONS RELATING TO CLAIM OF DEPRECIATION ON GDS AS WELL AS INTERCONNEC T TAS WAS DISCLOSED. HE SUBMITTED, IN COURSE OF THE ORIGINAL ASSESSMENT PRO CEEDING UNDER SECTION 143(3) OF THE ACT, THE AO HAD NOT ONLY INQUIRED INT O ASSESSEES CLAIM OF DEPRECIATION BUT HAS ALSO APPLIED HIS MIND TO THE F ACTS AND MATERIALS ON RECORD AND COMPLETED THE ASSESSMENT AFTER ACCEPTING ASSESS EES CLAIM. HE THEREFORE SUBMITTED THAT THE AO HAVING ALREADY FORMED HIS OPI NION WITH REGARD TO ASSESSEES CLAIM OF DEPRECIATION ON GDS AND INTERCO NNECT TAS AT THE TIME OF COMPLETION OF ORIGINAL ASSESSMENT, REASSESSMENT PRO CEEDING ON THE BASIS OF VERY SAME MATERIAL AMOUNTS TO REVIEW OF THE EARLIER ORDER PASSED ON A MERE CHANGE OF OPINION. TO DEMONSTRATE THE FACT THAT TH E ASSESSEES CLAIM OF ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 7 DEPRECIATION ON GDS WAS ENQUIRED INTO AND EXAMINED BY THE AO DURING THE ORIGINAL ASSESSMENT PROCEEDING BE REFERRED TO LETTE R DATED 19.11.03 FILED BEFORE THE AO IN COURSE OF THE ORIGINAL ASSESSMENT PROCEED ING. HE SUBMITTED, AFTER CONSIDERING THE ASSESSEES SUBMISSIONS/REPLY WITH R EGARD TO CLAIM OF DEPRECIATION ON GDS SYSTEM THE AO ACCEPTED THE SAME . AS FAR AS CLAIM OF DEPRECIATION ON INTERCONNECT TAS WHICH WERE CLAIMED ON THE BASIS OF ADDITIONS MADE TO FIXED ASSETS DURING THE RELEVANT PREVIOUS Y EAR LD. SR. COUNSEL REFERRING TO THE STATEMENT OF DEPRECIATION FORMING PART OF THE TAX AUDIT REPORT SUBMITTED, ALL INFORMATIONS RELATING TO CLAIM OF DE PRECATION ON INTERCONNECT TAS IS SUBMITTED IN THE TAX AUDIT REPORT. HE SUBMI TTED, TAX AUDIT REPORT SUBMITTED IN COMPLIANCE TO THE PROVISIONS OF SECTIO N 44AB IS A STATUTORY DOCUMENT, HENCE, CANNOT BE CONSIDERED TO BE AN ORDI NARY PIECE EVIDENCE. HE SUBMITTED, TAX AUDIT REPORT CONSTITUTES A VALID PIE CE OF EVIDENCE AND CANNOT BE IGNORED. LD. SR. COUNSEL SUBMITTED, AS ASSESSEES CLAIM OF DEPRECIATION IS FULLY DISCLOSED IN THE TAX AUDIT REPORT WHICH WAS AVAILAB LE BEFORE THE AO AT THE TIME OF COMPLETION OF ORIGINAL ASSESSMENT AND THE AO HAS ACCEPTED ASSESSEES CLAIM AFTER EXAMINING SUCH A STATUTORY DOCUMENT, IN ABSEN CE OF FURTHER TANGIBLE MATERIAL OR INFORMATION COMING TO THE POSSESSION OF THE AO AFTER COMPLETION OF THE ORIGINAL ASSESSMENT, THE REOPENING OF ASSESSMEN T ON THE VERY SAME MATERIAL IS NOTHING BUT A REVIEW OF HIS OWN ORDER ON A MERE CHANGE OF OPINION. IN SUPPORT OF HIS CONTENTION THAT TAX AUDIT REPORT SUB MITTED IN COMPLIANCE TO SECTION 44AB OF THE ACT IS IN THE NATURE OF A STATU TORY DOCUMENT AND HAS CERTAIN SANCTITY AND CANNOT BE CONSIDERED TO BE A O RDINARY PIECE OF EVIDENCE WHICH COULD NOT HAVE BEEN NOTICED BY THE AO WITH DU E DILIGENCE. LD. SR. COUNSEL RELIED UPON THE FOLLOWING DECISIONS: 1. RANBAXY LABORATORIES LTD. VS. DCIT (351 ITR 23) 2. 31 INFOTECH LTD. VS. CIT (329 ITR 257) ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 8 10. THE LD. SR. COUNSEL REFERRING TO THE OBSERVATIO NS MADE BY THE AO IN THE ORIGINAL ASSESSMENT ORDER SUBMITTED, A READING OF T HE ASSESSMENT ORDER WOULD REVEAL THAT THE AO HAS IN DETAIL EXAMINED ASSESSEE S CLAIM OF DEPRECIATION ON DIFFERENT ITEMS. THEREFORE, IT CANNOT BE SAID THAT THE AO WHILE COMPLETING THE ORIGINAL ASSESSMENT HAS NOT EXAMINED ASSESSEES CLA IM OF DEPRECIATION ON GDS AND INTERCONNECT TAS. IN SUPPORT OF HIS CONTENTION LD. SR. COUNSEL RELIED UPON A NUMBER OF DECISIONS OF THE HONBLE SUPREME C OURT AS WELL AS DIFFERENT HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT . 11. THE LD. CIT D.R. SHRI G.M. DOSS ON THE OTHER HA ND JUSTIFYING THE VALIDITY OF REOPENING OF ASSESSMENT SUBMITTED, WHEN THE AO HAS NOT EXAMINED THE ISSUE RELATING TO CLAIM OF DEPRECIATION ON GDS AND INTERCONNECT TAS AND HAS NOT APPLIED HIS MIND TO THAT ISSUE IT CANNOT BE SAID THAT THERE IS FORMATION OF OPINION BY THE AO RESULTING IN CHANGE OF OPINION, H ENCE, REOPENING OF ASSESSMENT IS INVALID. THE LD. D.R. SUBMITTED, THE ASSESSEE HAS NOT DEMONSTRATED THAT THE AO DURING THE ORIGINAL ASSESS MENT PROCEEDING HAS EXAMINED THE ISSUE RELATING TO CLAIM OF DEPRECATION ON GDS AND INTERCONNECT TAS. THE LD. D.R. SUBMITTED, IN THE QUESTIONNAIRE ISSUED BY THE AO DURING THE ORIGINAL ASSESSMENT PROCEEDINGS THERE IS NOTHIN G TO SUGGEST THAT AO HAS SPECIFICALLY INQUIRED INTO THESE TWO ISSUES. THOUG H, IN THE STATEMENT OF DEPRECIATION FORMING PART OF TAX AUDIT REPORT ASSES SEE HAS FURNISHED INFORMATION RELATING TO CLAIM OF DEPRECIATION ON IN TERCONNECT TAS BUT THERE IS NO INDICATION THAT THE AO HAS EITHER EXAMINED THE I SSUE OR APPLIED HIS MIND RELATING TO ASSESSEES CLAIM OF DEPRECIATION ON IT. AS FAR AS CLAIM OF DEPRECIATION ON GDS IS CONCERNED, THE LD. D.R. SUBM ITTED, THE STATEMENT OF DEPRECATION IN THE TAX AUDIT REPORT DOES NOT SPECIF ICALLY REFER TO SUCH ASSET. HE SUBMITTED, EVEN IN THE QUESTIONNAIRE THE AO HAS NOT RAISED ANY ISSUE RELATING TO CLAIM OF DEPRECIATION ON GDS. THE LD. D.R. SUBMITT ED, THEREFORE, THERE WAS NO OCCASION FOR ASSESSEE TO SUBMIT ITS REPLY DATED 19.11.03 EXPLAINING ITS CLAIM ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 9 OF DEPRECIATION ON GDS. HE SUBMITTED, EVEN ACCEPTI NG THAT THE AO HAS CALLED FOR INFORMATION RELATING TO CLAIM OF DEPRECIATION O N GDS AND IN PURSUANCE TO WHICH THE ASSESSEE HAS SUBMITTED SUCH INFORMATION I N LETTER DATED 19.11.03, BUT, CONSIDERING THE FACT THAT AO COMPLETED THE ASS ESSMENT ON 25.11.03, THE TIME BEING TOO SHORT IT CANNOT BE ACCEPTED THAT THE AO HAS APPLIED HIS MIND TO THE SUBMISSIONS OF THE ASSESSEE. THE LD. D.R. SUBM ITTED, IF THE AO WHILE COMPLETING THE ASSESSMENT HAS IGNORED TO EXAMINE CE RTAIN FACTS AND MATERIALS AS RESULT OF WHICH THERE IS UNDERASSESSMENT OR ESCA PEMENT OF ASSESSMENT THEN THE AO IS EMPOWERED UNDER THE ACT TO REOPEN SUCH AS SESSMENT UNDER SECTION 147. IN SUPPORT OF SUCH CONTENTION THE LD. D.R. RE LIED UPON THE FOLLOWING DECISIONS: 1. HONDA SIEL POWER PRODUCTS LTD. VS. DCIT (340 ITR 53) 2. INDIAN HUME PIPE CO. LTD. (348 ITR 439) 3. ACIT VS. MANUBHAI SONS & CO. (18 SOT 297) 4. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD . VS. ADDL. CIT (350 ITR 651) 12. THE LD. D.R. SUBMITTED, THE ASSESSEE HAVING NOT OBJECTED TO THE REOPENING OF ASSESSMENT BEFORE THE AO AND HAVING PA RTICIPATED IN THE REASSESSMENT PROCEEDING HE CANNOT CHALLENGE THE REO PENING OF ASSESSMENT AT THE SUBSEQUENT STAGE. FOR SUCH PROPOSITION HE RELI ED UPON THE DECISION OF ITAT IN CASE OF SUSHIL KUMAR JALAN VS. ITO IN ITA N O.34/GAU/2011- ORDER DATED 03.02.2012. 13. IN REJOINDER, THE LD. SR. COUNSEL SUBMITTED, TH E DOUBT EXPRESSED BY THE LD. D.R. WITH REGARD TO ASSESSEES REPLY DATED 19.1 1.03 IS UNFOUNDED AS GDS IS NOT THE ONLY ISSUE IN SUCH REPLY WAS FILED BEFOR E THE AO. THE LD. SR. COUNSEL SPECIFICALLY REFERRING TO THE REPLY DATED 1 9.11.03 SUBMITTED, THE ASSESSEE HAS ALSO EXPLAINED ONE MORE ISSUE RELATING TO LEASE RENTAL FROM BKC PROPERTY WHICH WAS ALSO EXAMINED BY THE AO IN COURS E OF ORIGINAL ASSESSMENT PROCEEDING AND ASSESSEES CLAIM WAS REJECTED. HE T HEREFORE SUBMITTED THE ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 10 CONTENTION OF THE LD. D.R. THAT THERE WAS NO OCCASI ON TO FILE SUCH A REPLY BEFORE THE AO IS NOT RELEVANT. 14. WE HAVE PATIENTLY HEARD THE LD. COUNSELS AND CA REFULLY CONSIDERED THE SUBMISSIONS MADE BY THEM ON THE BASIS OF FACTS AND MATERIALS ON RECORD AND RELEVANT CASE LAWS. THE SUM AND SUBSTANCE OF THE A RGUMENT FROM ASSESSEES SIDE IS THE REOPENING OF ASSESSMENT IS INVALID AS N O NEW INFORMATION/TANGIBLE MATERIAL CAME TO THE POSSESSION OF THE AO AFTER COM PLETION OF ORIGINAL ASSESSMENT TO FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT OR HAS BEEN UNDER ASSESSED. 15. THE SECOND CONTENTION FROM THE ASSESSEES SIDE IS, AO HAVING EXAMINED ALL THESE MATERIALS AND FORMED AN OPINION WHILE ACC EPTING ASSESSEES CLAIM OF DEPRECIATION IN THE ORIGINAL ASSESSMENT, THE REOPEN ING ON BASIS OF VERY SAME MATERIAL AMOUNTS TO REVIEW OF THE EARLIER ORDER PAS SED ON A MERE CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER LAW. FOR EX AMINING THE VALIDITY/ACCEPTABILITY OF THE ABOVE SAID CONTENTION S OF THE ASSESSEE IT IS NECESSARY TO EXAMINE THE FACTS ON RECORD TO ASCERTA IN WHETHER THE AO IN COURSE OF THE ORIGINAL ASSESSMENT PROCEEDING HAS EXAMINED ASSESSEES CLAIM OF DEPRECIATION ON GDS AND INTERCONNECT TAS AND WHETHE R SUBSEQUENT TO THE COMPLETION OF ORIGINAL ASSESSMENT THERE IS ANY FRES H INFORMATION/TANGIBLE MATERIAL AVAILABLE WITH THE AO TO FORM A BELIEF THA T ASSESSEE HAS CLAIMED EXCESS DEPRECIATION BY TREATING THE GDS AND INTERCO NNECT TAS AS COMPUTER INSTEAD OF PLANT & MACHINERY THEREBY CAUSING ESCAPE MENT OF INCOME OR UNDER ASSESSMENT OF INCOME. AS COULD BE SEEN, THE ASSESS EE ALONG WITH THE RETURN OF INCOME FILED HAS SUBMITTED A TAX AUDIT REPORT FROM THE STATUTORY AUDITOR IN COMPLIANCE TO THE PROVISIONS OF SECTION 44AB OF THE ACT. FURTHER, REFERENCE TO THE TAX AUDIT REPORT REVEALS THAT IN THE STATEMENT OF DEPRECIATION FORMING PART OF THE TAX AUDIT REPORT ASSESSEE HAS DISCLOSED ALL INF ORMATIONS RELATING TO THE DEPRECIATION CLAIMED FOR THE RELEVANT ASSESSMENT YE AR. THERE IS NO DISPUTE TO ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 11 THE FACT THAT IN COURSE OF ORIGINAL ASSESSMENT PROC EEDING ALONG WITH THE RETURN OF INCOME THE ABOVE SAID TAX AUDIT REPORT WAS AVAIL ABLE BEFORE THE AO. FURTHER A CAREFUL READING OF THE ASSESSMENT ORDER DEMONSTRA TES THAT THE AO HAS EXTENSIVELY REFERRED TO ASSESSEES CLAIM OF DEPRECI ATION ON DIFFERENT ITEMS OF FIXED ASSETS. THEREFORE, IT CANNOT BE ACCEPTED THA T CLAIM OF DEPRECIATION ON GDS AND INTERCONNECT TAS WOULD HAVE ESCAPED THE ATT ENTION OF THE AO AS IN THE STATEMENT OF DEPRECIATION THE ASSESSEE HAS SPEC IFICALLY MENTIONED THE CLAIM OF DEPRECIATION UNDER DIFFERENT HEADS. IN ADDITION TO THE INFORMATION DISCLOSED IN THE TAX AUDIT REPORT, IT IS OBSERVED THAT IN LET TER DATED 19.11.03 ASSESSEE IN RESPONSE TO QUERY RAISED BY THE AO DURING THE ORIGI NAL ASSESSMENT PROCEEDING HAS SPECIFICALLY EXPLAINED THE JUSTIFICATION OF CLA IM OF DEPRECIATION AT 60% ON GDS BY TREATING IT AS COMPUTER. THE AFORESAID FACT S WOULD CLEARLY SUGGEST THAT IN COURSE OF ORIGINAL ASSESSMENT PROCEEDING UNDER S ECTION 143(3) OF THE ACT THE AO HAS EXAMINED NOT ONLY ASSESSEES CLAIM OF DEPREC IATION ON GDS AND INTERCONNECT TAS BUT HAS ACCEPTED THE CLAIM AFTER A PPLICATION OF MIND. WHETHER THE ACCEPTANCE OF ASSESSEES CLAIM BY THE A O IS PROPER OR IMPROPER IS A DIFFERENT ISSUE. BUT, FACTS REMAIN THE AO HAS EX AMINED THE ISSUE AND COMPLETED THE ASSESSMENT. THAT BEING THE CASE IN A BSENCE OF ANY FRESH/TANGIBLE MATERIAL COMING TO THE POSSESSION OF THE AO, THE RE OPENING OF ASSESSMENT ON THE BASIS OF VERY SAME MATERIAL WOULD AMOUNT TO REV IEW OF THE EARLIER ORDER PASSED ON A MERE CHANGE OF OPINION AS THE AO HAS AL READY FORMED AN OPINION WITH REGARD TO ASSESSEES CLAIM OF DEPRECIATION, WH ETHER RIGHTLY OR WRONGLY. THOUGH A CATENA OF DECISIONS HAVE BEEN CITED BY LD. COUNSELS, IT IS NOT NECESSARY TO DEAL WITH EACH ONE OF THEM. SUFFICE T O SAY, WE WOULD PREFER TO DISCUSS THE PRINCIPLES LAID DOWN IN SOME OF THE JUD ICIAL PRECEDENTS PLACED BEFORE US. IN CASE OF RANBAXY LABORATORIES LTD. VS . DCIT (SUPRA) THE HONBLE DELHI HIGH COURT REFERRING TO EXPLANATION 1 OF SECT ION 147 OBSERVED THAT DISCLOSURE MADE BY THE ASSESSEE IN A TAX AUDIT REPO RT IS IN THE NATURE OF ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 12 STATUTORY DISCLOSURE HENCE CANNOT BE CONSIDERED TO BE A PIECE OF EVIDENCE WHICH WAS HIDDEN IN SOME BOOKS OF ACCOUNT WHICH THE AO COULD HAVE POSSIBLY WITH DUE DILIGENCE DISCOVERED. IT WAS HELD THAT TH E TAX AUDIT REPORT HAVING PLACED BEFORE THE AO ALONG WITH THE RETURN WHICH TH E AO WAS DUTY BOUND TO GO THROUGH BEFORE COMPLETING THE ASSESSMENT WILL NO T FALL IN THE CATEGORY OF MATERIAL AS REFERRED TO IN EXPLANATION 1 TO SECTION 147. THE HONBLE BOMBAY HIGH COURT IN CASE OF 3 I INFOTECH LTD. VS. CIT (SU PRA) AFTER EXAMINING THE TRUE IMPORT OF EXPLANATION 1 TO SECTION 147 AND THE LEGI SLATIVE INTENT EXPRESSED SIMILAR VIEW. THE HONBLE SUPREME COURT IN MUCH RE FERRED CASE OF CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561 HAS IN CLEAR T ERMS HELD THAT EVEN AFTER THE AMENDMENT OF SECTION 147 OF THE ACT BY THE DIRECT T AX LAWS AMENDMENT ACT, 1987 IT CANNOT BE CONSTRUED THAT THE AO HAS BEEN GI VEN A WIDER POWER TO REOPEN THE ASSESSMENT BY GIVING GO BYE TO THE TWO B ASIC CONDITIONS FOR REOPENING THE ASSESSMENT VIZ. THERE MUST BE TANGIBL E MATERIAL IN POSSESSION OF AO INDICATING ESCAPEMENT OF INCOME AND THERE MUST B E A LIVE LINK BETWEEN SUCH MATERIAL AND FORMATION OF BELIEF. THE HONBLE COURT HELD, UNLESS A SCHEMATIC INTERPRETATION IS GIVEN TO THE WORDS REA SON TO BELIEVE IT WILL GIVE ARBITRARY POWER TO AO TO REOPEN ASSESSMENT ON MERE CHANGE OF OPINION. THE HONBLE SUPREME COURT THEREAFTER PROCEEDED TO HOLD THAT UNLESS THERE ARE TANGIBLE MATERIAL COMING TO THE POSSESSION OF THE A O TO SHOW THAT INCOME HAS ESCAPED ASSESSMENT, THE ASSESSMENT CANNOT BE REOPEN ED ON A MERE CHANGE OF OPINION. IN CASE OF ASIAN PAINTS 308 ITR 195 THE H ONBLE JURISDICTIONAL HIGH COURT HELD THAT WHEN AN ASSESSMENT IS COMPLETED UND ER SECTION 143(3) OF THE ACT IT IS TO BE PRESUMED THAT THE AO HAS COMPLETED SUCH ASSESSMENT AFTER TAKING INTO CONSIDERATION ALL FACTS AND MATERIALS O N RECORD. THEREFORE, ON THE VERY SAME SET OF FACTS AND CIRCUMSTANCES ASSESSMENT CANNOT BE REOPENED AS IT WILL AMOUNT TO CHANGE OF OPINION. IN CONTRAST, THE DECISIONS CITED BY LD. CIT DR ARE FOUND TO INAPPLICABLE TO THE PRESENT CASE. ON PERUSAL OF THESE DECISIONS IT WAS SEEN THAT MOST OF THEM ARE IN THE CONTEXT OF TRUE AND FULL DISCLOSURE OF ALL ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 13 MATERIAL FACTS BY THE ASSESSEE IN TERMS OF PROVISO TO SECTION 147, WHICH IS NOT AN ISSUE IN THE PRESENT APPEAL. MOREOVER, NONE OF THE DECISIONS LAY DOWN THE PROPOSITION THAT IN ABSENCE OF ANY TANGIBLE MATERIA L ASSESSMENT CAN BE REOPENED ON MERE CHANGE OF OPINION. BE THAT AS IT MAY, ON EXAMINATION OF FACTS AND MATERIALS ON RECORD IN THE LIGHT OF THE P RINCIPLES LAID DOWN IN THE JUDICIAL PRECEDENTS REFERRED TO ABOVE IT IS FOUND T HAT THERE IS NO FRESH/TANGIBLE MATERIAL IN THE POSSESSION OF THE AO WHILE RECORDIN G HIS REASONS FOR REOPENING OF THE ASSESSMENT. IT IS EVIDENT THAT ACTION UNDER SECTION 147 HAS BEEN INITIATED BY REVISITING/RE-APPRECIATING THE VERY SAME MATERIA LS ON THE BASIS OF WHICH ORIGINAL ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED. AS THE AO WHILE COMPLETING THE ORIGINAL ASSESSMENT HAS EXA MINED THESE FACTS AND MATERIALS AND PASSED THE ASSESSMENT ORDER AFTER APP LICATION OF MIND, THE REOPENING OF ASSESSMENT ON THE VERY SAME SET OF FAC TS AND MATERIALS WOULD TANTAMOUNT TO REVIEW OF THE ASSESSMENT ORDER PASSED EARLIER THAT TOO ON A MERE CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER LA W. ACCORDINGLY, IN OUR CONSIDERED OPINION ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT IN THE PRESENT CASE IS INVALID. AS A NATURAL CONSEQUENCE THE ASSESSMENT ORDER PASSED IN CONSEQUENCE THEREOF ALSO HAS TO BE DECLARED AS I NVALID AND ACCORDINGLY IS TO BE QUASHED. BEFORE PARTING, WE MAY MAKE IT CLEAR T HAT THE DECISION RENDERED BY US AS ABOVE IS PURELY IN THE CONTEXT OF VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT AND CANNOT BE CONSIDER ED TO BE A PRECEDENT FOR ASSESSEES CLAIM OF DEPRECIATION ON GDS AND INTERCO NNECT TAS AT THE RATE OF 60% BY TREATING THEM AS A COMPUTER. THAT ISSUE HAS TO BE DECIDED ACCORDING TO ITS OWN MERIT IN AN APPROPRIATE CASE. AS WE HAVE Q UASHED THE ASSESSMENT ORDER WHILE CONSIDERING THE ISSUE RAISED IN THE ADDITIONA L GROUND, THE GROUNDS RAISED ON MERITS ARE OF MERE ACADEMIC INTEREST, HENCE THER E IS NO NECESSITY TO ADJUDICATE THEM. 16. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 14 ITA NO.3326/M/09 17. DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: '1(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO TREAT THE EXPENSES ON HARDWA RE AT RS.2,81,99,152/- AND SOFTWARE EXPENSES AT RS.5,64,70,898/- AS EXPENSES O N COMPUTER IN RESPECT OF TAS AND ALLOW DEPRECIATION AT 60%. (B) THE LD. CIT(A) FURTHER ERRED IN DIRECTING THE A O TO GRANT DEPRECIATION ON TAS FOR THE FULL YEAR OF THE ELIGIBLE DEPRECIATION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE DISALLOWANC E OF DEPRECIATION OF RS. 18,12,35,478/- ON GDS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE INTEREST LEVIED U /S.234D OF RS.2,17,45,272/-. 4. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR W ITHDRAW THE AFORESAID GROUND OF APPEAL'. 18. BEFORE DECIDING THE GROUNDS OF THE DEPARTMENT I T IS NECESSARY TO BRIEFLY DEAL WITH THE FACTS. AS ALREADY STATED HEREIN BEFO RE, ASSESSMENT IN CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT AND ULTIMATELY COMPLETED UNDER SECTION 147 READ WITH 143(3) VIDE ORDER DATED 10.11.06. AFTER COMPLETION OF THE ASSESSMENT AS AFORESAID THE AO AG AIN REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT FOR THE SEC OND TIME BY ISSUING A NOTICE UNDER SECTION 148 OF THE ACT BEYOND THE PERIOD OF F OUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR FOR THE REASON THAT DEPREC IATION ON GDS AND INTERCONNECT TAS HAS BEEN WRONGLY ALLOWED TO THE AS SESSEE FOR THE ENTIRE YEAR, WHEREAS, THE ASSESSEE IS ELIGIBLE AT THE RATE OF 50 % OF THE AMOUNT CLAIMED AS ASSET WAS USED FOR LESS THAN SIX MONTHS. THE AO UL TIMATELY COMPLETED THE ASSESSMENT BY RESTRICTING THE CLAIM OF DEPRECIATION TO THE 50% OF THE AMOUNT CLAIMED BY HOLDING THAT THE ASSET WAS USED FOR LESS THAN SIX MONTHS. ASSESSEE CHALLENGED BOTH THE REASSESSMENT ORDERS BEFORE THE CIT(A) BY PREFERRING SEPARATE APPEALS. ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 15 19. THE LD. CIT(A) HOWEVER DISPOSED OFF BOTH THE AP PEALS FILED BY ASSESSEE IN A CONSOLIDATED ORDER PASSED BY HIM, AS REFERRED TO HEREIN BEFORE. IN THE SAID ORDER LD. CIT(A) ALLOWED PARTIAL RELIEF TO THE ASSE SSEE IN RESPECT OF APPEAL PREFERRED AGAINST THE FIRST REASSESSMENT ORDER BY A LLOWING CLAIM OF DEPRECIATION AT 60% ON PART OF INTERCONNECT TAS. AS FAR AS APPE AL AGAINST SECOND REASSESSMENT ORDER IS CONCERNED, LD. CIT(A) ALLOWED ASSESSEES CLAIM BY HOLDING THAT ASSESSEE HAS USED THE ASSET FOR MORE T HAN SIX MONTHS, HENCE, ELIGIBLE TO CLAIM FULL DEPRECIATION. AGAINST THE A FORESAID ORDER OF THE LD. CIT(A) THE DEPARTMENT IS BEFORE US. 20. HOWEVER, AS COULD BE SEEN FROM THE GROUNDS RAIS ED, THEY RELATE TO RELIEF GRANTED BY THE LD. CIT(A) IN BOTH THE APPEALS FILED BY THE ASSESSEE, THOUGH, THE DEPARTMENT HAS FILED A SINGLE APPEAL. AS FAR AS GR OUND NOS.1(A) AND 2 ARE CONCERNED THEY RELATE TO THE RELIEF GRANTED BY THE LD. CIT(A) AGAINST THE FIRST ASSESSMENT ORDER PASSED ON REOPENING. AS WE HAVE H ELD THE REOPENING OF ASSESSMENT TO BE INVALID IN THAT CASE AND QUASHED T HE ASSESSMENT ORDER THESE GROUNDS HAVE BECOME REDUNDANT AND DO NOT REQUIRE TO BE ADJUDICATED. AS FAR AS GROUND NOS.1(B) IS CONCERNED, ON A PERUSA L OF THE ORDER PASSED BY LD. CIT(A) IT IS OBSERVED THAT AFTER EXAMINING T HE RELEVANT FACTS AND MATERIALS ON RECORD HE HAS GIVEN A CATEGORICAL FIND ING OF FACT THAT INTERCONNECT TAS WAS PUT TO USE IN JULY 2000 HENCE THE OBSERVATI ON OF THE AO THAT IT WAS USED FOR LESS THAN SIX MONTHS IS NOT PROVED ON RECO RD. AS THE LD. D.R. HAS NOT BROUGHT ANY MATERIAL BEFORE US TO CONTROVERT THE AB OVE SAID FINDING OF THE LD. CIT(A), WE ARE UNABLE TO ACCEPT THE PLEA OF THE DEP ARTMENT. ACCORDINGLY, THIS GROUND IS ALSO DISMISSED. 21. IN THE RESULT, DEPARTMENTS APPEAL IS DISMISSED . CO NO.201/M/2012 ITA NO.3417/M/2009, CO NO.201/M/2012 & ITA NO.3326/ M/2009 M/S. TATA COMMUNICATIONS LTD. (FORMERLY KNOWN AS VIDESH SANCHAR NIGAM LTD.) 16 22. AS FAR AS CO NO.201/M/2012 IS CONCERNED, THE AS SESSEE HAS CHALLENGED THE MAINTAINABILITY OF THE APPEAL OF THE DEPARTMENT AS WELL AS THE VALIDITY OF ASSESSMENT UNDER SECTION 148 BEYOND FOUR YEARS BY R AISING VARIOUS TECHNICAL/LEGAL OBJECTIONS. HOWEVER, CONSIDERING T HE FACT THAT DEPARTMENTS APPEAL HAS BEEN DISMISSED THE CROSS OBJECTION OF TH E ASSESSEE HAS BECOME INFRUCTUOUS. ACCORDINGLY, THE SAME IS DISMISSED. 23. TO SUM UP, ASSESSEES APPEAL IN ITA NO.3417/M/2 009 IS ALLOWED, DEPARTMENTS APPEAL IN ITA NO.3326/M/2009 AND CROSS OBJECTION OF ASSESSEE IN CO NO.201/M/2012 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01.2016. SD/- SD/- (RAMIT KOCHAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 29.01.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.
