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TMI Blog2011 (10) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh for Appellant Mr. Vimal Gupta for Respondent Judgement Per: D Y Chandrachud: 1. The assessment of the Petitioner for Assessment Year 200405 has been sought to be reopened by a notice dated 17 March 2011 issued under Section 148(1) of the Income Tax Act 1961. 2. The Petitioner filed its return of income for Assessment Year 2004-05 on 19 October 2004. The Assessing Officer passed an order of assessment under Section 143(3). The assessee had declared a loss of Rs. 2.10 Crores. Depreciation in the amount of Rs.2.11 Crores was claimed by the assessee on fixed assets. The Assessing Officer made a general disallowance on the depreciation claimed by the assessee in the amount of Rs.20 lacs on the following grounds : On perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause either the assets were used or were not used. In the event that the assets were not used, the claim of depreciation should have been disallowed in its entirety. The bills of purchase which were furnished by the assessee indicated that the assets were put to use during the year. At that stage, it would appear that there was no reason to disbelieve the veracity or the authenticity of the bills on purchase. 4. During the course of the assessment proceedings for Assessment Year 2008-09 the assessee claimed depreciation in the amount of Rs. 81.67 lacs at 100% of the cost of an asset described as an Effluent Treatment Plant (ETP) system. The assessee, by a notice dated 11 October 2010, was requested to justify the claim and produce documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re as follows : During the assessment proceedings of the assessee company for A.Y. 2008-09, it was observed that the assessee had, interalia, claimed depreciation to the tune of Rs.81,67,860/@ 100% of the cost of asset described as ETP System . The assessee was requested to justify the claim and submit supporting evidences in respect of the same. In response the assessee filed a copy a bill pertaining to the purchase of the said equipment. The copy of the bill indicated that the said asset was supplied to the assessee by M/s. Praneet Enviroquips Private Limited having address at D169, Industrial area, Phase 7, Mohali (PB) 160055. On an enquiry under the provisions of section 133(6) of the Act, this company denied having any transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act has been computed. 6. Counsel appearing on behalf of the Petitioner submitted that in the present case (i) No specific information was before the Assessing Officer and there was nothing to indicate that the bills for Assessment Year 2004-05 were fabricated; (ii) The jurisdictional condition for the reopening of an assessment beyond a period of four years of the end of the relevant assessment year is that there must be a failure on the part of the assessee to fully and truly disclose all the material facts necessary for the assessment for that assessment year; (iii) The jurisdictional condition is absent in the present case and the assessment is sought to be reopened to circumvent the order passed by the CIT (Appeals). 7. On the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Learned counsel urged that in these circumstances, the reasons on the basis of which the assessment is sought to be reopened clearly indicate that there was a failure on the part of the assessee to disclose fully and truly all material facts. The Assessing Officer has reason to believe that the assessee has claimed depreciation on the basis of an alleged supply of a whole ETP System from a third party which for Assessment Year 2008-09 has confirmed that the bills were bogus, that no supplies were effected and that no payments were received from the assessee. 8. The assessment in the present case is sought to be reopened beyond a period of four years of the end of the relevant assessment year. The powers of the Assessing Officer in suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase during Assessment Year 2004-05 was from the same party from whom the assessee claimed to have purchased an ETP system for Assessment Year 2008-09. The latter purchase from the same alleged vendor is found to be bogus. This is a case where the Assessing Officer has tangible material which has come before him in the course of the assessment proceedings for Assessment Year 2008-09 and which would form the subject matter of further investigation once the assessment proceedings for Assessment Year 2004-05 are reopened. The exercise of the power to reopen the assessment, though beyond a period of four years, is therefore not in excess of jurisdiction so as to warrant the issuance of a writ of certiorari. 9. A Division Bench of this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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