ACIT, Cir-35, Kolkata, Kolkata V. Kolkata Port Trust, Kolkata

ITA 412/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9334 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 10-03-2014
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: N K PODDA R
• Keywords: Reopening of assessment; Depreciation; Retrospective amendment; Question of law; Difference of opinion; Assessment record; Revised return; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 260A; 12AA; 147; 148; 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI PARTHA SARAT HI CHAUDHURY, JM] I.T.A NO.412/KOL/2014 ASSESSMENT YEAR: 2009-10 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. KOLKATA PORT TRUST CIRCLE-35, KOLKATA (PAN: AAAJK0361L) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 01.03.2017 DATE OF PRONOUNCEMENT: 01.03.2017 FOR THE APPELLANT: N O N E FOR THE RESPONDENT: N. K. PODDAR, SR. ADVOCATE ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XX, KOLKATA VIDE APPEAL NO. 392/CIT(A)-XX/CIR-35/2011-12/KOL DATED 22.11.20 13. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-35, KOLKATA U/S. 143(3) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2009-10 VIDE HIS ORDER DATED 30.12.2011. 2. AT THE OUTSET, THERE IS A DELAY OF 8 DAYS IN FI LING THE APPEAL BY THE REVENUE BEFORE US. ON GOING THROUGH THE REASONS STATED IN THE CON DONATION PETITION AND IN VIEW OF THE CONCESSION GIVEN BY THE LD AR TO CONDONE THE DELAY, WE HEREBY CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUDICATION. 3. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL OF THE REVENUE IS THAT WHETHER THE ASSESSEE PORT TRUST COULD BE ASSESSED IN THE STATUS OF A LO CAL AUTHORITY IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3.1. THE REVISED RETURN OF INCOME FOR THE ASST YEA R 2009-10 WAS FILED ON 31.3.2011 DISCLOSING LOSS OF RS. 20,75,54,316/- AND ASSESSMEN T WAS COMPLETED U/S 143(3) OF THE ACT ON 30.12.2011 ON THE ASSESSED INCOME OF RS. 12,94,8 3,754/- ASSESSING THE ASSESSEE IN THE STATUS OF A COMPANY REJECTING THE CLAIM OF STATUS OF LOCAL AUTHORITY AND MAKING CERTAIN DISALLOWANCES IN DEPRECIATION. HOWEVER, THE LD CIT( A) REVERSED THE DECISION OF THE LD AO 2 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 ON MERITS BY HOLDING THE ASSESSEE TRUST AS A LOCAL AUTHORITY. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHE THER CIT(A) HAS ERRED IN ASSESSING STATUS OF KOLKATA PORT TRUST AS LOCAL AUTHORITY INSTEAD OF COMPANY. 3.2. NONE APPEARED ON BEHALF OF THE REVENUE. WE FIND THAT THE LD CIT DR WAS SICK AND HAD APPLIED FOR ADJOURNMENT IN 8 CASES LISTED FOR H EARING. BUT SINCE THE ISSUE IS A COVERED MATTER, THE ADJOURNMENT PETITION IS REJECTED AND TH E MATTER TAKEN UP FOR HEARING. THE LD AR STATED THAT THE ASSESSEE HAS BEEN TREATED AS A L OCAL AUTHORITY VIDE THE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL FOR THE ASST YEARS 2003-04 TO 2005-06 IN ITA NOS. 2628 TO 2630/KOL/2013 AND ITA NOS. 2868 TO 2870/KOL/2013 DA TED 8.7.2016. HE REFERRED TO THE OPERATIVE PORTION OF THE SAID JUDGEMENT IN SUPPORT OF HIS CONTENTION. 3.3. WE HAVE HEARD THE LD AR. WE FIND THAT THE I SSUE UNDER DISPUTE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TR IBUNAL IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE VIDE ITA NOS. 2628 TO 2630/KOL/ 2013 AND ITA NOS. 2868 TO 2870/KOL/2013 DATED 8.7.2016 FOR THE ASST YEARS 200 3-04 TO 2005-06 WHEREIN IT WAS HELD AS UNDER:- 6.4. WE HOLD THAT THE MEANING OF THE EXPRESSION LOCAL AUTHORITY AS INSERTED IN THE EXPLANATION TO SECTION 10(20) OF THE ACT WITH EFFEC T FROM ASST YEAR 2003-04 IS NOT APPLICABLE FOR DETERMINING THE STATUS IN WHICH THE ASSESSEE SH OULD BE ASSESSED NOR IT IS RELEVANT FOR DECIDING THE RATE OF TAX APPLICABLE. UP TO ASSESSM ENT YEAR 2002-03, KOPT WAS EXEMPTED FROM PAYMENT OF TAX UNDER SECTION 10(20) OF THE ACT AS IT EXISTED UP TO ASSESSMENT YEAR 2002- 03. AS PER SECTION 3(31) OF GENERAL CLAUSES ACT, PO RT TRUST IS A LOCAL AUTHORITY. LOCAL AUTHORITY, ACCORDING TO SECTION 3(31) OF THE GENERA L CLAUSES ACT SHALL MEAN A MUNICIPAL COMMITTEE, DISTRICT BOARD, BODY OF PORT COMMISSIONE RS OR OTHER AUTHORITY LEGALLY ENTITLED TO, OR ENTRUSTED BY THE GOVERNMENT WITH CONTROL OR MANA GEMENT OF MUNICIPAL OR LOCAL FUND. ALL MAJOR PORT TRUSTS THEREFORE, FALL WITHIN THE MEANIN G OF THE EXPRESSION 'LOCAL AUTHORITY' UNDER THE GENERAL CLAUSES ACT. BY THE FINANCE ACT 2 002 W.E.F. ASSESSMENT YEAR 2003-04, EXEMPTION UNDER SECTION 10(20) OF THE ACT HAS BEEN RESTRICTED TO FEW LOCAL AUTHORITIES VIZ. PANCHAYAT AS REFERRED TO IN CLAUSE (D) OF ARTICLE 2 43 OF THE CONSTITUTION, MUNICIPAL AS REFERRED TO IN CLAUSE (E) OF ARTICLE 243P OF THE CO NSTITUTION, MUNICIPAL COMMITTEE & DISTRICT BOARD AND CANTONMENT BOARD AS DEFINED IN SECTION 3 OF THE CANTONMENT'S ACT, 1924. THUS W.E.F. ASSESSMENT YEAR 2003-04, ONLY THESE LOCAL AU THORITIES CONTINUE TO CLAIM EXEMPTION UNDER SECTION 10(20). HOWEVER, IT MAY BE NOTED THAT THE DEFINITION OF 'LOCAL AUTHORITY' AS PER GENERAL CLAUSES ACT HAS NOT UNDERGONE ANY CHANGE. T HEREFORE, KOPT REMAINS AS A LOCAL AUTHORITY AS PER GENERAL CLAUSES ACT, BUT ITS EXEMP TION UNDER SECTION 10(20) OF THE ACT HAS BEEN WITHDRAWN W.E.F. ASSESSMENT YEAR 2003-04. IN V IEW OF THAT, RETURN HAS BEEN CORRECTLY FILED BY KOPT IN THE STATUS OF A LOCAL AUTHORITY. K OPT IS GOVERNED BY THE MAJOR PORT TRUSTS ACT. 6.5. THE LD. AR APART FROM ARGUING THAT THE ASSESS EES STATUS SHOULD BE ASSESSED ONLY AS A LOCAL AUTHORITY ALSO OBJECTED TO THE REOPENING OF A SSESSMENT ON THE GROUND THAT NO NEW 3 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 INFORMATION HAS BEEN BROUGHT INTO RECORD TO JUSTIFY INITIATION OF THE PROCEEDING UNDER SECTION 147 OF THE ACT. ALL INFORMATION REQUIRED FOR THE PU RPOSE OF ASSESSMENT WERE PROVIDED IN THE COURSE OF ASSESSMENT U/S 143(3) OF THE ACT. MOREOVE R, IN COURSE OF RECTIFICATION PROCEEDINGS U/S 154 OF THE ACT WHICH WAS SOUGHT BY THE ASSESSEE , A SPECIFIC QUERY WAS RAISED AS TO WHY KOPT WOULD BE ASSESSED AS A LOCAL AUTHORITY. THE AS SESSEE IN REPLY TO THE QUERY VIDE LETTER DATED 20.05.2009 EXPLAINED WHY IT HAD FILED RETURN OF INCOME IN THE STATUS OF A 'LOCAL AUTHORITY'. HE ARGUED THAT THE REOPENING HAS BEEN M ADE MERELY ON THE BASIS OF CHANGE OF OPINION WITHOUT BRINGING ON RECORD ANY NEW FACTS OR MATERIALS. HE FURTHER ARGUED THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF INCOME OF THE ASSESSEE OR PARTICULARS OF INCOME OF THE ASSESSEE. THIS IS MORE RELEVANT AS THE REOPENING WAS MADE BEYOND 4 YEARS FROM THE END OF THE RELEVAN T ASSESSMENT YEAR. HE ARGUED THAT NO MATERIAL EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE LD. AO TO PROVE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE FROM MAKING THE FULL AN D TRUE DISCLOSURE OF ITS INCOME WARRANTING REOPENING BEYOND 4 YEARS. WE FIND FROM PAGE 30 OF THE PAPER BOOK THAT THE LD AO HAD RECORDED THE FOLLOWING REASONS FOR REOPENING THE AS SESSMENT:- SUB.: REASONS FOR RE-OPENING UNDER SECTION 148 OF THE I. T. ACT FOR A.Y. 2003-04. REF.: YOUR LETTER NO. FIN/08/TAX DATED 29/04/2010 RECEIVED BY THIS OFFICER ON 03/05/2010. PLEASE REFER TO THE ABOVE. REASONS RECORDED FOR RE-OPENING FOR A.Y. 2003-04 IN YOUR CASE STAND AS UNDER: 'THE SUPREME COURT IN THE CASE OF ADITYAPUR INDUSTR IAL AREA DEVELOPMENT AUTHORITY V. UNION OF INDIA [2006] 283 ITR 97 HAS HELD THAT INCO ME OF AN AUTHORITY, EVEN CONSTITUTED BY A NOTIFICATION UNDER AN ACT ENACTED BY THE LEGISLATUR E, IS NOT THE INCOME OF THE GOVERNMENT AND THE AUTHORITY CANNOT CLAIM EXEMPTION FROM UNION TAXATION. THE PRIME MINISTER'S COUNCIL ON TRADE AND INDUSTRY IN ITS RECOMMENDATION ON PORTS UNDER INFRASTRUCTURE DEVELOPMENT HAS RECOMMENDED THAT 'TO ENSURE THAT TH E PORT TRUSTS START OPERATING ALONG MORE COMMERCIAL LINES, IT IS NECESSARY TO CORPORATI SE THEM'. FURTHER, SECTION 5 OF THE MAJOR PORT TRUST ACT, 1963 PROVIDES THAT 'EVERY BOARD CON STITUTED UNDER THIS ACT SHALL BE A BODY CORPORATE HAVING PERPETUAL SUCCESSION AND A COMMON SEAL WITH POWER, SUBJECT TO THE PROVISIONS OF THIS ACT, TO ACQUIRE, HOLD OR DISPOSE OF PROPERTY AND MAY BY THE NAME BY WHICH IT IS CONSTITUTED, SUE OR BE SUED'. FURTHER, THE MI NISTRY OF SHIPPING GUIDANCE NOTE PROVIDES THAT 'THE FORMAT OF FINANCIAL STATEMENTS PRESCRIBED BY THE INDIAN COMPANIES ACT, 1956 HAS BEEN USED AS THE BASIS FOR DEVELOPING THE ACCOUNTIN G FORMAT OF PORT TRUSTS TOGETHER WITH THE REQUIREMENT OF ACCOUNTING STANDARDS' VIDE MINISTRY OF SHIPPING [PORTS WING] LETTER NO. PR- 20021/2/98-PG DATED 06/11/2002. THE PORT TRUSTS THUS FOLLOW ACCRUAL SYSTEM OF ACCOU NTING AND THE IDENTIFICATION OF REVENUE AND EXPENDITURE IS BASED ON THE PRINCIPLES CONTAINE D IN THE COMPANIES ACT, 1956. FURTHER, STEPS HAVE ALREADY BEEN TAKEN FOR CORPORATISATION O F JNPT, NEW MANGALORE AND TUTICORIN PORT TRUSTS VIZ. REGISTERING WITH THE JURISDICTIONA L REGISTRARS OF COMPANIES. IN VIEW OF ABOVE, I HAVE THE REASON TO BELIEVE THAT INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR IN QUESTION HAS BEEN ASSESSED CONSI DERING THE STATUS OF THE ASSESSEE AS LOCAL AUTHORITY AT A LOW RATE INSTEAD OF TREATING T HE STATUS AS COMPANY, DUE TO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULL AND TRUE PART ICULARS FOR A.Y. 2003-04 WITHIN THE MEANING OF EXPLANATION- 2(C)(II) OF SECTION 147 OF INCOME T AX ACT, 1961. 4 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 PRIOR SANCTION OF C.I.T. KOL-XII, KOLKATA HAS ALREA DY BEEN OBTAINED BEFORE ISSUING THE SAID NOTICE'. 6.6. WE FIND THAT THE ASSESSEE HAD GIVEN REPLY TO THE ASSESSEE OBJECTING TO THE REASONS RECORDED ON MERITS OF THE ISSUE ALSO APART FROM QUE STIONING THE SAME ON LEGALITY OF THE SAME. WE FIND THAT THE ASSESSEE HAD GIVEN ITS OBJECTIONS ON EACH AND EVERY AVERMENT MADE BY THE LD AO IN THE REASONS RECORDED AS UNDER:- (I) IN THE REASON FOR REOPENING PROVIDED BY YOU, YOU H AVE RELIED ON THE SUPREME COURT'S JUDGEMENT IN THE CASE OF ADITYAPUR INDUSTRIAL AREA DEVELOPMENT AUTHORITY VS. UNION OF INDIA (283 ITR 97). IN THE SAID JUDGEMENT THE APEX COURT HAS HELD THAT INCOME OF AN AUTHORITY EVEN THOUGH CONSTITUTED BY A NOTIFICATION UNDER AN ACT ENACTED BY THE STATE LEGISLATURE, IS NOT INCOME OF THE STATE GOVERNMENT AND THE AUTHORITY CANNOT CLAIM EXEMPTION FROM UNION TAXATION. REPLY - IT IS SUBMITTED THAT THE FACT OF THAT CASE IS TO TALLY DIFFERENT FROM THAT OF THE ASSESSEE. THE ASSESSEE HAS NOT CLAIMED EXEMPTION FROM UNION T AXATION ON THE GROUND OF IT BEING 'GOVERNMENT' KOPT IS A LOCAL AUTHORITY UNDER THE GE NERAL CLAUSES ACT BUT ITS EXEMPTION UNDER SECTION 10(20) OF THE INCOME TAX ACT HAS BEEN WITHDRAWN. IT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR IN QUESTION OFFERING ITS IN COME FOR TAX. IN THE CASE CITED BY YOU THE ASSESSEE SOUGHT TO CLAIM EXEMPTION UNDER SECTION 10 (20) WHICH IS NOT IN THE CASE OF KOPT. (II) IN THE REASON FOR REOPENING PROVIDED BY YOU, YOU HA VE ALSO STATED THAT THE PRIME MINISTER'S COUNCIL ON TRADE AND INDUSTRY IN ITS RECOMMENDATION ON PORTS HAS RECOMMENDED THAT TO ENSURE THAT PORT TRUSTS START OPERATING ALONG MORE COMMERCIAL LINES, IT IS NECESSARY TO CORPORATISE THEM. YOU HAVE ALSO COMMENTED THAT STEP S HAVE ALREADY BEEN TAKEN FOR CORPORATISATION OF JNPT, NEW MANGALORE AND TUTICORI N PORT TRUSTS. REPLY - IN THIS CONNECTION IT MAY KINDLY BE NOTED THAT K OPT HAS NOT GONE FOR CORPORATISATION. IT IS STILL A LOCAL AUTHORITY. IF IN THE FUTURE IT IS CORPORATISED, IT WILL BE FILING ITS RETURN IN TH E STATUS A COMPANY AND PAY TAX AT THE RATE APPLICABLE TO A COMPANY. (III) REGARDING YOUR OBSERVATION, IN THE REASON FOR REOPE NING THAT THE FORMAT OF FINANCIAL STATEMENTS PRESCRIBED BY THE COMPANIES ACT 1956 HAS BEEN USED AS THE BASIS FOR DEVELOPING THE ACCOUNTING FORMAT OF PORT TRUSTS. REPLY - IT MAY BE NOTED THAT THE FORMAT OF FINANCIAL STA TEMENTS ADOPTED BY KOPT IS NOT THAT PRESCRIBED BY COMPANIES ACT 1956. THE FORMAT HAS BE EN DESIGNED TO MAKE THE FINANCIAL STATEMENTS MORE TRANSPARENT AND MORE USEFUL FOR THE STAKE HOLDERS. EVEN BEFORE WITHDRAWAL OF EXEMPTION UNDER SECTION 10(20) OF THE INCOME TAX ACT, KOPT WAS FOLLOWING ACCRUAL SYSTEM OF ACCOUNTING AND THE SAME FORMAT FOR PREPAR ATION OF FINANCIAL STATEMENTS. THEREFORE, MERELY BECAUSE KOPT FOLLOWS ACCRUAL SYSTEM OF ACCOU NTING, IT CANNOT BE DEEMED TO A COMPANY FOR INCOME TAX PURPOSES. (IV) IN THE REASON FOR REOPENING, YOU HAVE REFERRED TO S ECTION - 5 OF THE MAJOR PORT TRUSTS ACT WHICH PROVIDES THAT EVERY BOARD CONSTITUTED UNDER T HIS ACT SHALL BE A BODY CORPORATE HAVING PERPETUAL SUCCESSION AND A COMMON SEAL WITH POWER, SUBJECT TO THE PROVISIONS OF THIS ACT TO ACQUIRE, HOLD OR DISPOSE OF PROPERTY AND MAY BY THE NAME BY WHICH IT IS CONSTITUTED, SUE OR BE SUED. REPLY - IN THIS CONNECTION, IT MAY BE NOTED THAT BODY COR PORATE DOES NOT ALWAYS MEAN A COMPANY. THE DEFINITION OF BODY CORPORATE AS PER TH E LEGAL DICTIONARY IS AS FOLLOWS: BODY CORPORATE IS A LEGAL ENTITY (SUCH AS AN ASSOCI ATION, FIRM, GOVERNMENT, GOVERNMENT AGENCY, INSTITUTION) IDENTIFIED BY A PARTICULAR NAM E. IT COMPRISES OF A COLLECTION OR 5 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 SUCCESSION OF INDIVIDUALS WHO HAVE EXISTENCE, RIGHT S AND DUTIES DISTINCT FROM THEIR EXISTENCE, RIGHTS AND DUTIES AS INDIVIDUALS AND IS ALSO CALLED CORPORATE BODY OR-CORPORATE ENTITY. HENCE EVEN AN ASSOCIATION OR FIRM OR GOVERNMENT AGE NCY MAY BE REFERRED TO AS A BODY CORPORATE. (V) SECTION 2(17) OF THE INCOME TAX ACT, GIVES THE DEFI NITION OF 'COMPANY'. THE DEFINITION OF 'COMPANY' IS AN EXHAUSTIVE DEFINITION. AS PER THE S AID SECTION 'COMPANY' MEANS -- (I) ANY INDIAN COMPANY, OR (II) ANY BODY CORPORATE INCORPORATED BY OR UNDER TH E LAWS OF A COMPANY OUTSIDE INDIA, OR (III) ANY INSTITUTION, ASSOCIATION OR BODY WHICH IS OR WAS ASSESSABLE OR WAS ASSESSED AS A COMPANY FOR ANY ASSESSMENT YEAR UNDER THE INDIAN IN COME TAX ACT, 1922 (11 OF 1922), OR WHICH IS OR WAS ASSESSABLE OR WAS ASSESSED UNDER TH IS ACT AS A COMPANY FOR ANY ASSESSMENT YEAR COMMENCING ON OR BEFORE THE 1ST DAY OF APRIL, 1970, OR (IV) ANY INSTITUTION, ASSOCIATION OR BODY, WHETHER INCORPORATED OR NOT AND WHETHER INDIAN OR NON-INDIAN, WHICH IS DECLARED BY GENERAL OR SPECIAL ORDER OF THE BOARD TO BE A COMPANY: PROVIDED THAT SUCH INSTITUTION, ASSOCIATION OR BODY SHALL BE DEEMED TO BE A COMPANY ONLY FOR SUCH ASSESSMENT YEAR OR ASSESSMENT YEARS (WHETHER C OMMENCING BEFORE THE 1ST DAY OF APRIL, 1971, OR ON OR AFTER THAT DATE) AS MAY BE SPECIFIED IN THE DECLARATION. THUS, KOPT IS NOT COVERED BY THIS DEFINITION OF COM PANY AS PER THE INCOME TAX ACT. (VI) SIMILARLY, SECTION 10(26) OF THE ACT GIVES THE DEFI NITION OF 'INDIAN COMPANY' WHICH IS AS UNDER --- 'INDIAN COMPANY' MEANS A COMPANY FORMED AND REGISTE RED UNDER THE COMPANIES ACT, 1956 (1 OF 1956), AND INCLUDES --- (I) A COMPANY FORMED AND REGISTERED UNDER ANY LAW R ELATING TO COMPANIES FORMERLY IN FORCE IN ANY PART OF INDIA (OTHER THAN THE STATE OF JAMMU AND KASHMIR AND THE UNION TERRITORIES SPECIFIED IN SUB-CLAUSE (III) OF THIS CLAUSE) : (IA) A CORPORATION ESTABLISHED BY OR UNDER A CENTRA L, STATE OR PROVINCIAL ACT; (IB) ANY INSTITUTION, ASSOCIATION OR BODY WHICH IS DECLARED BY THE BOARD TO BE A COMPANY UNDER CLAUSE (17) ; (II) IN THE CASE OF THE STATE OF JAMMU AND KASHMIR, A COMPANY FORMED AND REGISTERED UNDER ANY LAW FOR THE TIME BEING IN FORCE IN THAT STATE; (III) IN THE CASE OF ANY OF THE UNION TERRITORIES O F DADRA AND NAGAR HAVELI, GOA, OAMAN AND DIU AND PONDICHERRY, A COMPANY FORMED AND REGISTERE D UNDER ANY LAW FOR THE TIME BEING IN FORCE IN THAT UNION TERRITORY : PROVIDED THAT THE REGISTERED OR, AS THE CASE MAY BE PRINCIPAL OFFICE OF THE COMPANY, CORPORATION, INSTITUTION, ASSOCIATION OR BODY IN AL L CASES IS IN INDIA: HENCE, KOPT IS NOT ALSO COVERED BY THIS DEFINITION. (VII) MOREOVER, IT MAY BE NOTED THAT THE ASSESSEE K OLKATA PORT TRUST HAS REGISTERED FOR SERVICE TAX AND VAT PURPOSES AS A 'LOCAL AUTHORITY' AND NOT AS 'COMPANY' AND THE SAME HAS BEEN ACCEPTED BY THE RESPECTIVE AUTHORITIES. 6.7. WE FIND THAT THE LD AO HAD PASSED AN INDEPEND ENT ORDER DATED 18.11.2010 DISPOSING OFF THE PRELIMINARY OBJECTIONS RAISED BY THE ASSESSEE O N REOPENING OF ASSESSMENT, WHEREIN, HE HAD JUSTIFIED THE REOPENING OF ASSESSMENT BY MAKING THE FOLLOWING OBSERVATIONS:- THE ONLY CRITERIA AT THIS JUNCTURE IS THAT, THE PR IME MINISTER'S COUNCIL ON TRADE AND INDUSTRY IN ITS RECOMMENDATION ON PORTS, UNDER THE INFRASTRUCTURE DEVELOPMENT HAS RECOMMENDED THAT TO ENSURE THAT THE PORT TRUSTS STA RT OPERATING ALONG MORE COMMERCIAL LINES, IT IS NECESSARY TO CORPORATISE THEM AND THE ASSESSEE (PORT TRUST) DOES FOLLOW ACCRUAL 6 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 SYSTEM OF ACCOUNTING AND THE IDENTIFICATION OF REVE NUE AND EXPENDITURE IS BASED ON THE PRINCIPLES CONTAINED IN THE COMPANIES ACT, 1956. FURTHER, THE MINISTRY OF SHIPPING GUIDANCE NOTE PRO VIDES THAT, THE FORMAT OF FINANCIAL STATEMENTS PRESCRIBED BY THE INDIAN COMPANIES ACT, 1956 HAS BEEN USED AS THE BASIS FOR DEVELOPING THE ACCOUNTING FORMAT OF PORT TRUSTS TOG ETHER WITH THE REQUIREMENTS OF THE ACCOUNTING, STANDARDS VIDE MINISTRY OF SHIPPING (PO RTS WING) LETTER NO. PR-20021/2/98-PG DATED 06/11/2002. STEPS HAVE ALREADY BEEN TAKEN FOR CORPORATIZATION OF JNPT, NEW MANGALORE AND TUTICORIN PORT TRUSTS VIZ. REGISTERIN G WITH THE JURISDICTIONAL REGISTERS OF COMPANIES. FURTHER, SECTION 5 OF THE MAJOR PORT TRUST ACT, 196 3 NOT ONLY PROVIDES EVERY BOARD UNDER THIS ACT TO BE A BODY CORPORATE BUT ALSO COMMON SEA L WITH POWER, SUBJECT TO THE PROVISION OF THIS ACT TO ACQUIRE; HOLD OR DISPOSE OF PROPERTY AN D MAY BY NAME BY WHICH IT IS CONSTITUTED, SUE OR BE SUED. FURTHER SECTION 2(17)(I) OF THE INCOME TAX ACT STAT ES THAT COMPANY ALSO MEANS ANY INDIAN COMPANY AND WHEN READ WITH SECTION 2(26)(IA) WHICH STATES THAT 'INDIAN COMPANY' MEANS A COMPANY FORMED AND REGISTERED UNDER THE COMPANIES A CT, 1956 (1 OF 1956), AND INCLUDES A CORPORATION ESTABLISHED BY OR UNDER A CENTRAL, STAT E OR PROVINCIAL ACT. THE KOLKATA PORT TRUST ALSO COMES UNDER THE MAJOR PORT TRUST ACT, 19 63. IN FACT THE COMMISSIONERS OF THE PORT WERE RESPONSIBLE FOR THE PORT TILL JANUARY 1975, AF TER WHICH THE RESPONSIBILITY IS ON MAJOR PORT TRUST ACT, 1963 WHICH CAME INTO FORCE THEN. THEREFORE, THE ASSESSEE FULFILLS ALL THE CRITERIA O F A COMPANY BUT HAS BEEN ASSESSED AT A LOWER RATE AS A LOCAL AUTHORITY AND NOT AS A COMPANY. ON EXAMINATION OF THE ASSESSMENT RECORDS, IT EMERGED THAT THE ABOVE FACTS WAS NOT CONSIDERED DURING ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT AFTER LOOKING INTO THE FACTS AS STAT ED ABOVE. THE SUBMISSIONS OF THE ASSESSEE WERE NOT EXAMINED IN PROPER AND RIGHT PERSPECTIVE A ND THE ASSESSEE'S EXPLANATION AND CLAIM IN THIS REGARD WAS WRONGLY ACCEPTED. AFTER AMENDMENT TO SECTION 147 OF THE INCOME TAX: A CT W.E.F. ASSESSMENT YEAR 1989-90, THE SCOPE AND THE AMBIT OF PROVISIONS OF SECTION 147 HA VE BEEN ENLARGED AND THEREFORE IF THE A.O. IS SATISFIED THAT ANY EXCESS DEDUCTION OR RELI EF HAS BEEN ALLOWED, THEN IT IS PERMISSIBLE FOR HIM, TO REOPEN THE CONCLUDED ASSESSMENTS. IN TH IS CASE THE FACTS ON RECORD GATHERED IN COURSE OF REGULAR ASSESSMENT EXCESS RELIEF HAS BEEN GRANTED BY COMPUTING THE TAX AT LOWER RATE. I THEREFORE REJECT THE OBJECTIONS OF THE ASSE SSEE TO THE REASSESSMENT PROCEEDINGS INITIATED U/S 147 EXPLANATION 2(C)(II) OF THE INCOM E TAX ACT. I, ACCORDINGLY, PROPOSE TO PROCEED WITH THE REASSESSMENT PROCEEDINGS U/S 147 O F THE INCOME TAX ACT. 6.8. WE FIND THAT MINISTRY OF SHIPPING & TRANSPORT (TRANPORT WING), GOVERNMENT OF INDIA, VIDE ITS COMMUNICATION DATED 28.12.1977 ADDRESSED T O THE ASSESSEE THAT IT BEING A LOCAL AUTHORITY IS NOT CHARGEABLE TO INCOME TAX AND THAT THIS VIEW WAS ALSO ENDORSED BY THE CENTRAL BOARD OF DIRECT TAXES VIDE THEIR OFFICE MEM ORANDUM NO. 184/67/76-IT (AI) DATED 3.9.1977 WHEREIN THEY HAVE AGREED THAT PORT TRUST I S A LOCAL AUTHORITY UNDER THE INCOME TAX ACT. WE FIND FROM ANOTHER CORRESPONDENCE OF GOVER NMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, OFFICE OF THE PUBLIC RELATIO NS OFFICER, INCOME TAX DEPARTMENT, WEST BENGAL VIDE PROCEEDINGS NO. PRO-I/TC/PT.II/88- 89/1301 DATED 29.3.1989 WHEREIN, IT WAS CATEGORICALLY STATED THAT THE INCOME OF THE ASS ESSEE PORT TRUST IS EXEMPT FROM TAX U/S 10(20) OF THE ACT. THIS CORRESPONDENCE WAS GIVEN I N THE CONTEXT OF APPLICATION PREFERRED BY THE ASSESSEE TRUST FOR NON-DEDUCTION OF INCOME TAX AT SOURCE FROM STEVEDORING BILLS RAISED BY THE ASSESSEE. SIMILARLY IN YET ANOTHER CORRESPONDE NCE OF THE DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, INCOME TAX DEPARTMENT, WEST BE NGAL VIDE PROCEEDINGS NO. PRO/TC- 7 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 1/94-95/75 DATED 23.6.1994 , IT WAS CATEGORICALLY S TATED THAT THE ASSESSEE PORT TRUST BEING A LOCAL AUTHORITY IS NOT LIABLE FOR INCOME TAX U/S 10 (20) OF THE ACT AND HENCE NO TAX NEED TO BE DEDUCTED ON THE RENTAL PAYMENTS MADE TO THE ASSESSE E TRUST. 6.9. ALL THESE CORRESPONDENCES PROVE BEYOND DOUBT THAT THE ASSESSEES STATUS TO BE ASSESSED AS A LOCAL AUTHORITY AND ITS INCOME WAS EXEMPT U/S 10(20) OF THE ACT WAS ACCEPTED BY THE INCOME TAX DEPARTMENT UPTO ASST YEAR 2002-03. ONL Y PURSUANT TO AN AMENDMENT MADE IN SECTION 10(20) OF THE ACT WITH EFFECT FROM ASST YEA R 2003-04, THE SITUATION HAS UNDERGONE CHANGE WHEREIN THE ACTIVITIES OF THE ASSESSEE PORT TRUST WOULD NOT FALL UNDER THE DEFINITION OF THE EXPRESSION LOCAL AUTHORITY. AT THE COST OF R EPETITION, WE STATE THAT THE SAID DEFINITION INSERTED IN SECTION 10(20) IS ONLY APPLICABLE FOR T HE PURPOSE OF SECTION 10(20) OF THE ACT AND FOR ASSESSEES CLAIMING EXEMPTION UNDER THAT SECTIO N. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD NOT CLAIMED ANY EXEMPTION U/S 10(20) OF THE ACT FOR THE IMPUGNED ASSESSMENT YEARS UNDER APPEAL BEFORE US. HENCE THE AMENDMENT IN SEC TION 10(20) IS NOT AT ALL APPLICABLE TO THE ASSESSEE PORT TRUST. WE ALSO FIND FROM THE PA PER BOOK FILED BY THE ASSESSEE VIDE PAGES 77 TO 83 OF PAPER BOOK THAT MAJOR PORT TRUSTS IN INDIA HAD GIVEN CONFIRMATION TO THE ASSESSEE PORT TRUST THAT THEY ARE BEING ASSESSED ONLY AS A LOCAL AUTHORITY AND NOT IN THE STATUS OF A COMPANY UNDER THE INCOME TAX ACT AND THE SAME HAS BEEN ACCEPTED BY THE INCOME TAX DEPARTMENT AS BELOW:- CHENNAI PORT TRUST VIDE REF. LETTER NO. INCOME T AX CELL/6/2010/F DATED 28.12.2010 MORMUGAO PORT TRUST - VIDE REF. LETTER NO. FA/B.52/ 2010/176 DATED 28.12.2010 MUMBAI PORT TRUST - VIDE REF. LETTER NO. FA/A/IT/ MISC/1133 DATED 3.2.2011 NEW MANGALORE PORT TRUST- VIDE REF. LETTER NO. NMPT /FIN/ITA/2010-11 DATED 4.1.2011 COCHIN PORT TRUST - VIDE REF.LETTER NO. CAD/TAXES C ELL/INCOME TAX/ 2010 DATED 31.12.2010 VISAKHAPATNAM PORT TRUST- VIDE REF.LETTER NO. FA?B& B/REOPENING OF ASST DATED 24.12.2010 6.10. WE FIND THAT THE INCOME TAX ACT DOES NOT DEFI NE THE EXPRESSION LOCAL AUTHORITY OTHER THAN WHAT IS MENTIONED IN THE EXPLANATION TO SECTIO N 10(20) OF THE ACT. THIS DEFINITION AS CLEARLY STATED IN THE SAID EXPLANATION IS ONLY FOR THE PURPOSE OF SECTION 10(2) OF THE ACT AND DOES NOT APPLY TO THE DEFINITION OF THE EXPRESSION PERSON CONTAINED IN SECTION 2(31) OF THE ACT, SUB-CLAUSE (VI) WHEREOF, ALSO INCLUDES A LOCA L AUTHORITY AS A PERSON, WHO IS AN ASSESSEE WITHIN THE MEANING OF SECTION 2(7) OF THE ACT. WE ALSO FIND THAT THE DEFINITION OF THE EXPRESSION LOCAL AUTHORITY HAS TO BE DRAWN FROM T HE GENERAL CLAUSES ACT HAS BEEN APPROVED BY THE FOLLOWING DECISIONS:- BUDDHA VEERINAIDU VS STATE OF ANDHRA PRADESH REPORT ED IN (1983) 143 ITR 1021 AT 1024 (SC) IT WAS HELD THAT THE BODY OF PORT COMMISSIONERS ARE SPECIFICALLY MENTIONED IN SECTION 3(31) OF THE GENERAL CLAUSES ACT , AS LOCA L AUTHORITY. THE PORT COMMISSIONERS ARE APPOINTED SPECIFICALLY BY THE GOVERNMENT TO ADMINIS TER THE AFFAIRS OF THE PORTS AND THEY NED NOT AND DO NOT DISCHARGE ANY FUNCTIONS OF LOCAL SEL F GOVERNMENT. CALCUTTA STATE TRANSPORT CORPORATION VS CIT REPORTE D IN (1977) 108 ITR 922 AT 929 (CAL) - THIS WAS AFFIRMED BY THE HONBLE SUPREME COURT IN ( 1996) 219 ITR 515 (SC) - THE DEFINITION GIVEN IN THE GENERAL CLAUSES ACT, 1897 G OVERN ALL CENTRAL ACTS AND REGULATIONS MADE AFTER THE COMMENCEMENT OF THAT ACT. THE DEFIN ITION GIVEN IN SECTION 3(31) WILL, THEREFORE, HOLD GOOD FOR CONSTRUING THE EXPRESSION LOCAL AUTHORITY OCCURRING IN THE LAND ACQUISITION ACT. UNION OF INDIA VS R.C.JAIN REPORTED IN (1981) 2 SCC 310 (SC) IN THIS DECISION, THEIR LORDSHIPS OF HONBLE SUPREM E COURT FOLLOWING THE DEFINITION OF THE EXPRESSION LOCAL AUTHORITY AS CONTAINED IN THE GE NERAL CLUASES ACT HELD AND OBSERVED THAT 8 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 THE DELHI DEVELOPMENT AUTHORITY IS A LOCAL AUTHORIT Y FOR THE PURPOSES OF PAYMENT OF BONUS ACT, 1965, WHICH ACT ALSO DID NOT CONTAIN ANY DEFIN ITION OF THE EXPRESSION LOCAL AUTHORITY. ESPECIALLY IN PAGE 312 PARA 5, THE HONBLE SUPREME COURT NOTED THAT DELHI DEVELOPMENT AUTHORITY WAS CONSTITUTED BY THE CENTRAL GOVERNMENT UNDER SECTION 3 OF THE DELHI DEVELOPMENT ACT, 1957. THE SAID ACT INTER ALIA PRO VIDED THAT THE DELHI DEVELOPMENT AUTHORITY SHALL BE A BODY CORPORATE HAVING PERPETUA L SUCCESSION AND A COMMON SEAL, WITH THE USUAL CORPORATE ATTRIBUTES. CIT VS U.P.FOREST CORPORATION REPORTED IN (1998) 23 0 ITR 945 AT 951 (SC) THE HONBLE SUPREME COURT IN THE ABSENCE OF ANY DEF INITION OF THE EXPRESSION LOCAL AUTHORITY IN THE INCOME TAX ACT, 1961, ADOPTED AND APPLIED THE DEFINITION OF THAT EXPRESSION AS CONTAINED IN SECTION 3(31) OF THE GENERAL CLAUSE S ACT, 1897 FOR THE PURPOSES OF EXAMINING WHETHER U.P.FOREST CORPORATION WAS OR WAS NOT A LOC AL AUTHORITY UNDER THE INCOME TAX ACT, 1961. CIT VS AGRICULTURAL MARKETING PRODUCE COMMITTEE REP ORTED IN (2001) 250 ITR 369 (DEL) THE HONBLE DELHI HIGH COURT AFTER REITERATING THE AFORESAID DECISIONS OF THE HONBLE APEX COURT QUOTED INTER ALIA THE FOLLOWING THREE TESTS A RE RELEVANT FOR DETERMINING WHETHER AN AUTHORITY COULD BE HELD TO BE A LOCAL AUTHORITY:- (A) IT MUST HAVE A SEPARATE LEGAL EXISTENCE AS A CORPOR ATE BODY AND AN AUTONOMOUS STATUS ; (B) IT MUST NOT BE A MERE GOVERNMENTAL AGENCY BUT MUST BE A LEGALLY INDEPENDENT ENTITY ; (C) THE CONTROL OR MANAGEMENT OF THE FUND MUST VEST IN THE AUTHORITY. KRISHI UTPANNA BAZAR SAMITI VS ITO REPORTED IN (198 6) 158 ITR 742 (BOM) THE HONBLE BOMBAY HIGH COURT APPLIED THE AFORESAID PRINCIPLES IN UPHOLDING THAT THE SAID ASSESSEE WAS ALSO A LOCAL AUTHORITY, AS DEFINED IN SECTION 3(31) OF THE GENERAL CLAUSES ACT, 1897, IN THE ABSENCE OF ANY DEFINITION OF THAT EXPR ESSION IN THE INCOME TAX ACT, 1961. 6.11. WE FIND THAT THE DECISION OF THE HONBLE SUP REME COURT IN ADITYAPUR INDUSTRIAL AREA DEVELOPMENT AUTHORITY VS UNION OF INDIA & ORS REPOR TED IN (2006) 283 ITR 97 (SC), REFERRED TO THE LD AO IN THE REASONS RECORDED AND I N THE RE-ASSESSMENT ORDERS DATED 30.12.2010, HAS NO APPLICATION WHATSOEVER IN DECIDI NG THE CONTROVERSY RAISED BY THE LD. AO. IN THAT CASE, THE QUESTION FOR CONSIDERATION BEFORE THE HONBLE SUPREME COURT WAS AS TO WHETHER ADITYAPUR INDUSTRIAL AREA DEVELOPMENT AUTHO RITY GOVERNED BY THE BIHAR INDUSTRIAL AREA DEVELOPMENT AUTHORITY ACT, 1974 WAS PART OF TH E STATE GOVERNMENT AND / OR THAT ITS INCOME WAS THE INCOME OF THE STATE GOVERNMENT ENTIT LED TO EXEMPTION FROM UNION TAXATION UNDER ARTICLE 289 OF THE CONSTITUTION. THEIR LORDS HIPS OF THE HONBLE SUPREME COURT HELD THAT IN VIEW OF THE INSERTION OF THE EXPLANATION U/ S 10(20) OF THE INCOME TAX ACT, 1961, ADITYAPUR INDUSTRIAL AREA DEVELOPMENT AUTHORITY WAS NOT A LOCAL AUTHORITY, AS DEFINED FOR THE PURPOSES OF SECTION 10(20) OF THE SAID ACT; AND WITH THE FURTHER OMISSION OF SECTION 10(20A) OF THE SAID ACT FROM THE STATUTE BOOK, THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM ANY TAX EXEMPTION, PARTICULARLY IN VIEW OF THE FACT THA T ITS INCOME COULD NOT BE SAID TO BE THE INCOME OF THE STATE SO AS TO BE EXEMPT FROM UNION T AXATION UNDER ARTICLE 289(1) OF THE CONSTITUTION. 6.12. WE ALSO FIND THAT THE LD. AO HAS ACCEPTED THE STATUS OF THE ASSESSEE PORT TRUST AS A LOCAL AUTHORITY EVEN IN THE RECENTLY CONCLUDED SCRUTINY A SSESSMENT FOR THE ASST YEAR 2012-13 U/S 143(3) OF THE ACT DATED 28.3.2015 WHICH COULD BE EV IDENT FROM PAGES 101 TO 108 OF THE PAPER BOOK OF THE ASSESSEE. WE FIND THAT ALL THE PORT TRUSTS SUCH AS CHENNAI PORT TRUST, MORMUGAO PORT TRUST, MUMBAI PORT TRUST, NEW MANGALO RE PORT TRUST, COCHIN PORT TRUST AND VISAKHAPATNAM PORT TRUST WERE BEING ASSESSED TO INCOME TAX AS LOCAL AUTHORITY. 9 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 6.13. WE FIND THAT THE ASSESSMENTS COMPLETED U/S 1 43(3) OF THE ACT FOR THE ASST YEARS 2003- 04 TO 2005-06 WERE REOPENED WITHOUT ANY TANGIBLE MA TERIAL BROUGHT ON RECORD BY THE LD AO. WE ALSO HOLD THAT THE REASSESSMENT IS DONE ONLY DUE TO CHANGE OF OPINION AND THE ABOVE FACTS AND VARIOUS CORRESPONDENCES ADDRESSED BY THE MINIST RY OF SHIPPING (UNDER WHICH ASSESSEE TRUST IS PRIMARILY ADMINISTERED AND CONTROLLED) ; VARIOUS CORRESPONDENCES OF MINISTRY OF FINANCE, INCOME TAX DEPARTMENT, GOVERNMENT OF INDI A ; FROM THE REASONS RECORDED FOR RE- OPENING THE ASSESSMENTS FOR THE THREE ASSESSMENT YE ARS, WE HOLD THAT THE REASSESSMENT MADE FOR ALL THE THREE ASSESSMENT YEARS DESERVES TO BE Q UASHED AND DECLARED VOID AB INITIO. WE ALSO PLACE RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS KELVINATOR OF INDIA LTD REPORTED IN (2010) 320 ITR 561 (SC) IN THIS REGARD, WHEREIN IT WAS HELD THAT : AFTER THE AMENDMENT, THE AO HAS TO HAVE REASON TO B ELIEVE THAT INCOME HAS ESCAPED ASSESSMENT , BUT THIS DOES NOT IMPLY THAT THE AO CA N REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT OF CHANGE OF OPINION MUS T BE TREATED AS AN IN-BUILT TEST TO CHECK THE ABUSE OF POWER. AT PAGE 564 OF THE SAID JUDGEME NT, THEIR LORDSHIPS FURTHER HELD AND OBSERVED THAT ONE MUST BEAR IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO REASSESS. THE AO HAS NO POWER TO REVIEW; HE HAS ONLY POWER TO REASSESS, WITHOUT THERE BEING ANY CHANGE OF OPINION ON HIS PART. ACCORDINGLY, THE REASSESSMENTS FRAMED BY THE LD AO FOR THE ASST YEAR 2003-04 IS QUASHED AND DECLARED VOID AB INITIO. EVEN ON MERITS, THE A FORESAID FACTS AND FINDINGS WOULD CLEARLY PROVE BEYOND DOUBT THAT THE ASSESSEE PORT TRUST HAS TO BE ASSESSED ONLY AS A LOCAL AUTHORITY AND NOT IN THE STATUS OF A COMPANY. RESPECTFULLY FOLLOWING THE SAME , WE DISMISS THE GR OUND NO.1 RAISED BY THE REVENUE. 4. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DECIDING THE ISSUE OF DEPRECIATION IN FAVOUR OF THE ASSESSEE DIRECTING THE LD AO TO ARRIVE AT THE OPENING WDV FOR ASST YEAR 2004-05 BY TAKING THE OPENING BOOK VALUE OF BLOCK OF ASSETS AS ON 1.4.2002 IN THE FACTS AND CIR CUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSE SSEE WAS EXEMPT FROM TAX UPTO ASST YEAR 2002-03 AND HAD ACCORDINGLY CHOSEN NOT TO PROVIDE F OR ANY DEPRECIATION FOR THE PURPOSE OF INCOME TAX. HENCE THE VALUE OF FIXED ASSETS CONTIN UED TO BE REFLECTED AT COST. PURSUANT TO THE AMENDMENT IN THE STATUTE, THE ASSESSEE STARTED CLAIMING DEPRECIATION BASED ON THE BOOK VALUE OF ASSETS (I.E ORIGINAL COST OF ASSETS ). TH E LD AO OBSERVED THAT SINCE THE ASSESSEE WAS HAVING THE REGISTRATION U/S 12AA OF THE ACT , T HE LD AO HAD NO OCCASION TO LOOK INTO THE ISSUE OF DEPRECATION AND EXAMINE THE COST WITH DATE OF ACQUISITION OF FIXED ASSETS IN THE EARLIER YEARS . ACCORDINGLY HE REWORKED THE WRITTE N DOWN VALUE OF FIXED ASSETS AS ON 1.4.2008 BY PROVIDING FOR NOTIONAL DEPRECIATION YEA R ON YEAR AND ARRIVED AT THE DEPRECIATION FIGURE OF RS. 33,80,83,602/- AS AGAINS T THE CLAIM OF RS. 67,51,21,672/- BY THE 10 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 ASSESSEE. ACCORDINGLY, HE CONVERTED THE RETURNED L OSS INTO ASSESSED INCOME AND ARRIVED AT THE TOTAL INCOME OF RS. 12,94,83,754/-. 4.2. THE LD CITA BY PLACING RELIANCE ON THE CO-ORD INATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASST YEARS 2003-04 TO 2005-06 ON THE ISSUE OF DEPRECIATION IN ITA NOS. 375-379/KOL/2010 ; ITA NOS. 98-99/KOL/2012 AND ITA NO. 1041/KOL/2007 DATED 24.1.2013 , ALLOWED THE RELIEF CLAIMED BY THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND :- 2. IN THE FACTS & CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED BY DECIDING THE ISSUE OF DEPRECIATION IN FAVOUR OF THE ASSESSEE BY DIRECT ING THE AO TO ARRIVE AT THE OPENING WDV FOR THE AY 2004-05 BY TAKING THE OPENING BOOK VALUE OF BLOCK OF ASSETS AS ON 01.04.2002 THOUGH THE ASSESSEE FAILED TO PROVIDE THE DETAILS R EGARDING THE BLOCK OF ASSETS AS ON THAT DATE. 4.3. THE LD AR ARGUED THAT THIS ISSUE IS COVERED B Y THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN ASSESSEES OWN CASE FOR THE ASST YEAR S 2003-04 TO 2005-06 IN G.A. NO. 1615 OF 2013 I.T.A.T. NO. 112 OF 2013 DATED 2.12.2 013 . 4.4. WE HAVE HEARD THE LD AR. WE FIND THAT THE IS SUE UNDER DISPUTE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE (CIT VS KOLKATA PORT TRUST) VIDE ORDER DATED 2.12.2013 SUPR A WHEREIN THE QUESTION RAISED BEFORE THEIR LORDSHIPS AND DECISION RENDERED THEREON WERE AS UNDER :- THE 1ST QUESTION RAISED IN THIS APPEAL IS AS FOLL OWS: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED TRIBUNAL HAS ERRED IN LAW IN DIRECTING THE ASSESSING OFFICER TO ACCEPT THE BOOK VALUE OF THE ASSETS AS ON 01.04.2002 AND RE-COMPUTE THE DEPRECIATION FO R THE YEAR ENDING ON 31.03.2003, 31.03.2004 AND 31.03.2005 BY DISREGARDI NG THAT THE ASSESSEE FAILED TO PROVIDE DETAILS DURING THE ASSESSMENT PROCEEDING AN D THAT THE ASSESSEE HAS BEEN REPEATEDLY CHANGING THE FIGURE OF ITS BOOK VALUE OF ASSETS WHICH ARE DIFFERENT FROM THE AUDITED ACCOUNTS FIGURES AND THEREFORE, NOT REL IABLE? THE LEARNED TRIBUNAL DECIDED THE ISSUE OF DEPRECIAT ION IN FAVOUR OF THE RESPONDENT ASSESSEE, RELYING ON EXPLANATION 6 IN SUB-SECTION 6 OF SECTION 43 OF THE INCOME TAX ACT, 1961, AS AMENDED BY THE FINANCE ACT, 2008, WITH RET ROSPECTIVE EFFECT FROM 1ST APRIL, 2003. THE NEWLY INSERTED EXPLANATION, WHICH IS APPLICABLE TO THE CASE OF THE RESPONDENT ASSESSEE, FOR THE ASSESSMENT YEARS 2003-2004 ONWARD S, MAKES IT CLEAR THAT WHERE AN ASSESSEE WAS NOT REQUIRED TO COMPUTE HIS TOTAL INCO ME FOR THE PURPOSES OF INCOME TAX FOR ANY PREVIOUS YEAR OR YEARS, PRECEDING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, DEPRECIATION WOULD BE ALLOWED WITH REFERENCE TO THE BOOK VALUE OF THE DEPRECIABLE ASSETS, IGNORING THE REVALUATION, IF AN Y CARRIED OUT IN THE BOOKS OF ACCOUNTS. 11 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 THE RESPONDENT ASSESSEE BECAME CHARGEABLE TO INCOM E TAX WITH EFFECT FROM THE ASSESSMENT YEAR 2003-2004 COMMENCING ON 1ST APRIL, 2003, THE RELEVANT FINANCIAL YEAR BEING 1ST APRIL, 2002 TO 31ST MARCH, 2003. ACCORDIN GLY, THE RESPONDENT ASSESSEE CLAIMED DEPRECIATION ON THE BOOK-VALUE OF ALL ITS DEPRECIAB LE ASSETS AS APPEARING IN AUDITED BOOKS OF ACCOUNTS AS ON 1ST APRIL, 2002, THE FIRST DAY OF TH E RELEVANT PREVIOUS YEAR CORRESPONDING TO THE ASSESSMENT YEAR 2003-2004. THE LEARNED TRIBUNAL HAS DEALT WITH THE ISSUE OF DEPRECIATION AT LENGTH IN ITS CONSOLIDATED ORDER DA TED 24TH JANUARY, 2013. MR. S.N. DUTTA, APPEARING ON BEHALF OF THE APPELLA NT ARGUED THAT THE RESPONDENT ASSESSEE HAD REPEATEDLY BEEN CHANGING THE FIGURE OF THE BOOK VALUE OF ITS ASSETS AND HAD FAILED TO FURNISH DETAILS IN COURSE OF THE ASSESSME NT PROCEEDINGS. A PERUSAL OF QUESTION 1 ALSO REVEALS THAT THE MAIN THRUST OF THE CASE OF THE REVENUE WAS THAT THE RESPONDENT ASSESSEE HAD, TIME AND AGAI N REVALUED ITS ASSETS AND HAD FAILED TO PROVIDE DETAILS AT THE TIME OF ASSESSMENT. MR. PODDAR APPEARING ON BEHALF OF THE RESPONDENT A SSESSEE SUBMITTD THAT THE LEARNED TRIBUNAL HAD DEALT WITH THESE POINTS AND RE FERRED TO THE FINDINGS OF THE LEARNED TRIBUNAL EXTRACTED HEREINBELOW:- THE ASSESSEE BEFORE THE AO IN RESPONSE TO THE ABOV E NOTICE FILED NECESSARY DETAILS THROUGH LETTERS DATED 15.12.2008 & 22.12.2008, INCL UDING, INTER ALIA, THE AUDIT REPORT DATED 20.12.2008, CERTIFYING, INTER ALIA, TH E BOOK VALUE OF THE DEPRECIABLE ASSETS HELD BY THE ASSESSEE AS ON 01.04.2002, 31.03 .2002, 31.03.2003, 31.03.2004 & 31.03.2005 AS WELL AS DEPRECIATION TO BE ALLOWED TH EREON HAVING REGARD, INTER ALIA, TO THE NEW EXPLANATION (6) INSERTED UNDER SECTION 4 3(6) OF THE ACT BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.2003 ..THE ASSESSEE FILED COMPETE DETAILS OF ASSETS, REGISTERS MAINTAINED FOR ALL ITS ASSETS AND ALSO FILED NECESSARY DETAILS AND CLARIFICATION AS WERE ASKED F OR BY THE AUTHORITIESWE FIND THAT THE CIT(A) VIDE HIS O RDER DATED 30.06.2008 FOR A.Y. 2004-05 HAS DIRECTED THE AO TO ALLOW DEPRECIAT ION AFTER CONSIDERING STEP WISE WORKING FILED BY ASSESSEE IN ACCORDANCE WITH AMENDE D LAW. THE RELEVANT FINDINGS OF CIT (A) ARE REPRODUCED ABOVE IN THIS ORDER AT PARA 4. EVEN FOR A.Y. 2005-06 THE CIT (A) HAS ALSO DIRECTED SIMILARLY VIDE HIS ORDER DATE D 14.12.2009 AND REVENUE HAS FILED NO APPEAL AGAINST ANY OF THE ABOVE STATED TWO APPEL LATE ORDERS. SIMILARLY, CIT(A) VIDE ORDER DATED 31.10.2011 FOR A.Y. 2004-05 AND 20 05-06 HAS SIMILARLY DIRECTED THE AO. THE ASSESSEE HAS FILED STEP WISE WORKING IN THE FORM OF AUDIT REPORT DATED 20.01.2010 GIVEN BY A CHARTERED ACCOUNTANT FIRM WHI CH IS EVEN NOW BEFORE US AT PAGES 271 TO 785 OF THE PAPER BOOK VOLUMES 2 AND 3 IN RESPECT OF ITA NO.1041/K/2007. THESE DOCUMENTS WERE EVEN FILED BEF ORE THE AO.WE ARE OF THE VIEW THAT FOR CALCULATING DEPRECIATION THE AO H AS TO CONSIDER THE RETROSPECTIVE AMENDMENT CARRIED OUT IN THE STATUTE BOOK BY INSERT ING EXPLANATION (6) TO SECTION 43(6) OF THE ACT AND TO ALLOW DEPRECIATION IN ACCOR DANCE WITH LAW AFTER MAKING FRESH CALCULATION WITH REFERENCE TO THE BOOK VALUE OF THE ASSETS FOLLOWING THE RETROSPECTIVE AMENDMENT. THE ASSESSEE HAS ALREADY FILED THE DETAI LED STATEMENT WHICH HAVE BEEN CHECKED AND VERIFIED BY THE AUDITORS AND ALSO THE A O COULD HAVE VERY WELL CHECKED THE SAME HENCE, WE DIRECT THE AO TO ACCEPT TH E BOOK VALUE OF ASSETS AS ON 01.04.2002 AND RECOMPUTE THE DEPRECIATION AS ON 31.03.2003, 31.03.2004 AND 31.03.2005 ON ALL ASSETS ACQUIRED PRIOR TO 01.04.20 02 AND IN USE ON THAT DATE ON THE WRITTEN DOWN VALUE OF THE ASSETS AS PER BOOKS OF AC COUNTS OF ASSESSEE AS ON 01.04.2002. HENCE, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THIS ISSUE IN ALL THESE APPEALS IS ANSWERE D ACCORDINGLY. 12 ITA NO.412/K/2014 KOLKATA PORT TRUST, AY 2009-10 AN APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT LIES ON SUBSTANTIAL QUESTIONS OF LAW AS FORMULATED. THERE CAN BE NO APPEAL AGAINST FACTUAL FINDINGS. THE FINDINGS OF FACTS OF THE TRIBUNAL CANNOT BE INTERFERED WITH BY THIS COURT IN APPEAL. THE FACTUAL FINDINGS CLEARLY INDICATE THAT THE ALLEGATION THAT THE RESPONDENT AS SESSEE FAILED TO PROVIDE DETAILS OR HAD REPEATEDLY CHANGED THE BOOK VALUE OF ITS ASSETS, CA NNOT BE SUSTAINED. THIS COURT IS CONSTRAINED TO HOLD THAT THE QUESTION SUGGESTED BY THE REVENUE IS NOT SUBSTANTIAL QUESTION OF LAW. ALL THE QUESTIONS EXCEPT QUESTION NO. 4 ARE ANSWERE D IN THE NEGATIVE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. QUESTION NO. 4 IS ANSWERED IN AFFIRMATIVE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THUS, THE APPEAL IS DISMISSED. RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE D ISMISS GROUND NO. 2 RAISED BY THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 01.03.2017 SD/- SD/- (PARTHA SARATHI CHAUDHURY) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 ST MARCH, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ACIT, CIRCLE-35, KOLKATA. 2 RESPONDENT KOLKATA PORT TRUST, 15, STRAND ROAD, KOLKATA-700 001. 3. THE CIT(A), KOLKATA 4. 5. CIT, KOLKATA. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .