THE DCIT, Itarsi V. M/S. JYOTI CONSTRUCTION COMPANY, Harda

ITA 650/Ind/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9587 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 12-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA No.650/Ind/2018 Assessment Year: 2005-06 DCIT Circle Itarsi : Appellant V/s M/s. Jyoti Construction Co. Harda PAN No.AADFJ4369G : Respondent Appellant by Shri Amit Soni, Sr.DR Respondent by S/Shri S.N. Agrawal & Pankaj Mogra, ARs Date of Hearing 23.12.2021 Date of Pronouncement 28.01..2022 O R D E R PER MANISH BORAD, A.M.: The above captioned appeal filed at the instance of the Revenue is directed against the order of Ld. Commissioner of Income Tax(Appeals) (in short ‘Ld. CIT(A)]-1 Bhopal dated 22.05.2018 which is arising out of the order u/s 143(3) of the Jyoti Construction Co. ITA No.650/Ind/2018 2 Income Tax Act 1961(In short the ‘Act’) dated 26.03.2013 by DCIT- 1(1), Bhopal. 2. Brief facts of the case as culled out from the records are that the assessee is a partnership firm. Return for A.Y. 2015-16 was filed u/s 139 of the Act on 20.12.2007 assessing income at Rs.10,13,770/-. Thereafter order u/s 154 of the Act was passed on 15.12.2008 determining income at Rs.13,55,050/-. Subsequently on perusal of record it was observed by the revenue authorities that the assessee has claimed excess depreciation of Rs.5,07,200/- on the cost/WDV of trucks by applying rate of 50% as against 25%. In the reassessment proceedings carried out u/s 143(3) r.w.s. 147 of the Act. It was claimed by the assessee that the depreciation @ 50% has been claimed on the trucks purchased between 01.04.2001 to 31.03.2002 and the same is allowable for the trucks used for running on hire. Ld. AO was not satisfied and he disallowed the claim of depreciation of Rs.5,07,200/- and assessed the income at Rs.18,62,250/-. 3. Aggrieved assessee preferred an appeal before Ld. CIT(A) challenging the reopening of the assessment and also challenging the disallowance of depreciation of the ld. AO. Ld. CIT(A) carefully Jyoti Construction Co. ITA No.650/Ind/2018 3 examining the records observed that the issue of depreciation was already examined during the course of original assessment proceeding. The case has been reopened beyond four years and the reason for reopening is merely a change of opinion which is not allowed as per law and accordingly quashed the reassessment proceedings. On merits also Ld. CIT(A) was satisfied that the assessee has provided necessary documents to prove that there were purchased of trucks during the F.Y. 2001-02 and they were put to use in the business of running them on hire and therefore, the assessee was eligible to claim 50% depreciation of such purchase and thus no disallowance of depreciation of Rs. 5,07,200/- called for. 4. Aggrieved revenue is now in appeal before Tribunal raising following grounds of appeal: “1.Whether on fact and circumstances of the case the ld. CIT(A) was justified in holding that the notice u/s 148 was not valid as there was change of opinion, and deleted addition of Rs.5,07,200/- on account of excess claim of depreciation, when the assessee firm has not derived any hire receipts from the commercial vehicle in A.Y. 2005-6? 5. Ld. DR vehemently argued supporting the order of Ld. AO. 6. Per contra ld. counsel for the assessee heavily relied on the finding of ld. CIT(A) and also referred to the paper book dated Jyoti Construction Co. ITA No.650/Ind/2018 4 26.11.2021 containing 136 pages and the synopsis filed on 06.12.2021. 7. We have heard rival contentions and perused the records placed before us. As regards the issue of quashing reopening proceedings raised by the revenue we find that during the course of original assessment proceedings carried out u/s 143(3) of the Act. The ld. AO specifically raised query vide questionnaire dated 27.04.2007 at point No.9 asking the assessee to provide “details of fixed assets owned by it, capitalization of expenses, if any, additions/sales made during the year and depreciation claimed with the necessary evidence”. Assessee duly replied to this query and also provided the information relating to depreciation claim @ 50% on WDV of trucks acquired during 01.04.2001 to 31.03.2002. Thereafter notice u/s 154/155 of the Act was issued again on the same issue of depreciation claimed on trucks @ 50% which was again replied and assessing officer after considering the reply accepted the claim Again notice u/s 148 of the Act was issued on the same issue. In our considered view it is a clear case of ‘change of opinion’ as the reopening has been done after 4 years and there is no tangible material found by the assessing authority which was not Jyoti Construction Co. ITA No.650/Ind/2018 5 incorporated in the income tax return nor any information of escapement of income is found. Therefore, in view of the ratio laid down by the Hon'ble Apex Court in the case of CIT vs. Kelvinator of India 228 CTR 488, and the ratio laid down by the Hon'ble jurisdictional High Court in the case of Hind Syntex Ltd. CIT (2011) 11 Taxmann.com 189 (M.P.), we find no infirmity in the finding of Ld. CIT(A) quashing the initiation of reassessment proceedings and annulling assessment order dated 26.03.2013. 8. Even on merit of the case we find that the assessee has placed sufficient material on record before lower authorities and before us to show that it has duly fulfilled the condition for claiming depreciation on higher rate i.e. 50% for the trucks purchased during F.Y. 2001-02 and put to use in the business of running them on hire before 31.03.2002 and therefore, has rightly claimed the depreciation @ 50% on the WDV of such trucks purchased during F.Y. 2001-02. Ld. CIT(A) has rightly appreciated the fact and deleted the addition on merit. 9. We, therefore, in view of our above discussions confirm the finding of Ld. CIT(A) and dismiss the grounds raised by the revenue on legality of the issue as well as merits of the case. Jyoti Construction Co. ITA No.650/Ind/2018 6 10. In the result, Revenue’s appeal ITANo.650/Ind/2018 is dismissed. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 28.01.2022. Sd/- Sd/- (MAHAVIR PRASAD) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated : 28 .01.2022 Patel/Sr. PS Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt.Registrar, I.T.A.T., Indore