9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 1710 - AT - Income TaxReopening of assessment - Held that - We are of the view that reopening had been done merely on change of opinion in as much as that in the original assessment made u/s. 143(3) of the I.T. Act, the AO had apparently applied his mind and had raised queries with regard to the items which have been identified by the AO in this notice u/s. 147/148 of the Income Tax Act. We also find that AO has no fresh material to form his opinion regarding escapement of assessment and he has also not found any tangible material to record the reasons for reopening of the assessment of the assessee. It is merely a change of opinion which is not permissible under the law as well as according to the various decisions rendered by the Hon ble Supreme Court of India in the case of CIT vs. Kelvinator of India Limited 2010 (1) TMI 11 - SUPREME COURT OF INDIA and Usha International Ltd. 2012 (9) TMI 767 - DELHI HIGH COURT the reassessment is invalid on the part of the AO and also on confirming the same on the part of the Ld. CIT(A). By these judgments the reopening of assessment beyond 4 years was also illegal. We also find considerable cogency in the contention raised by assessee s counsel that the judgment of the Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (2007 (5) TMI 197 - SUPREME Court) which the AO as well as Ld. CIT(A) has relied upon is distinguishable to the facts of the present case, as it was in different context of reopening when original assessment was not u/s. 143(3) of the I.T. Act. We are of the view that both the authorities below have gone wrong in deciding the reopening as valid. In the present case the issue reopening of assessment is incorrect and invalid. Therefore, we quash the orders of the authorities below on this legal issue is decide the same in favor of the assessee and against the revenue.
Issues:
1. Validity of depreciation rate on Networking Project. 2. Nature of expenditure on Total Productivity Maintenance Programmed and ISO 9001 certification. 3. Validity of reopening assessment under Section 147/148 of the Income Tax Act. Analysis: Issue 1: Validity of Depreciation Rate on Networking Project The Revenue challenged the depreciation rate allowed by the Ld. CIT(A) on the Networking Project, arguing that 80% depreciation was excessive compared to the allowable 25%. The Tribunal noted the discrepancy in rates and upheld the Revenue's appeal, ruling in favor of the Revenue on this issue. Issue 2: Nature of Expenditure on Total Productivity Maintenance Programmed and ISO 9001 Certification The Assessee contested the re-opening of assessment under Section 147/148, claiming that the expenditure on Total Productivity Maintenance Programmed and ISO 9001 certification was revenue expenditure. The Tribunal examined the nature of these expenses and concluded that they should have been treated as capital expenditure, contrary to the Assessee's assertion. The Tribunal sided with the Revenue on this issue. Issue 3: Validity of Reopening Assessment under Section 147/148 The core issue revolved around the validity of reopening the assessment under Section 147/148 of the Income Tax Act. The Assessee argued that the reassessment was merely a change of opinion and lacked fresh material to support the escapement of income. The Tribunal concurred with the Assessee, citing legal precedents and Supreme Court judgments to declare the reopening invalid. The Tribunal quashed the reassessment proceedings, ruling in favor of the Assessee and dismissing the Revenue's appeal as infructuous. In conclusion, the Tribunal upheld the Revenue's appeal on the depreciation rate issue and the nature of expenditure issue, while ruling in favor of the Assessee on the validity of reopening assessment under Section 147/148. The Tribunal's detailed analysis and reliance on legal precedents ensured a thorough examination of each issue, resulting in a balanced and legally sound judgment.
|
