2012 (2) TMI 707 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(Appeals) regarding deduction on software expenditure and validity of re-opening assessment u/s 148.

Deduction on software expenditure:
The Revenue appealed against the CIT(A) order allowing the assessee's claim for depreciation on computer software at 60%. The Revenue argued that the depreciation should be restricted to 25% based on a Tribunal decision. The CIT(A) held that the re-opening of the assessment was merely a change of opinion and thus allowed the appeal. The authorized representative contended that the original assessment was completed u/s 143(3) and the re-opening was beyond the permissible period of 4 years without fresh facts. The Tribunal noted that the re-opening was solely based on a change of opinion, making it invalid beyond 4 years. Following the decision in the case of Kelvinator of India Ltd., the Tribunal dismissed the Revenue's appeal.

Validity of re-opening assessment u/s 148:
The CIT(A) based its decision on the principles laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts, emphasizing the Assessing Officer's duty to provide reasons for re-opening and address the assessee's objections. However, the Tribunal found that despite the lack of a speaking order on objections, the re-opening could not be deemed invalid. Yet, as all necessary facts were available during the original assessment, the re-opening beyond 4 years was considered invalid. Citing the decision in the case of Kelvinator of India Ltd., the Tribunal quashed the re-opening of the assessment and dismissed the Revenue's appeal.

Separate Judgement:
No separate judgment was delivered by the judges in this case.