9911796707
TMI Blog2012 (9) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act and is regularly assessed to tax. For the assessment year 1996-1997, the petitioner had filed its return of income on 30.11.1996. The petitioner had in that year as in the past claimed depreciation at the rate of 40% on the commercial vehicles purchased by the petitioner from time to time. The opening Written Down Value of such purchases for the assessment year 1996-1997 was Rs.8.50 crores. On such Written Down Value, the petitioner had claimed depreciation at the rate of 40%. In the second half of the year relevant to the assessment year 1996-1997, the petitioner had made fresh purchases of such commercial vehicles and supplied to one Shriram Transport Finance Co. Ltd. on lease. On such purchases of commercial vehicles, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n plant and machineries, commercial vehicles, vehicles, furnitures and equipments and Building(residentials) as per the APPENDIX (I) see rule(5). We have claimed depreciation on commercial vehicles at the rate of 40% and on other vehicles we have claimed depreciation at the rate of 20%. The working is reproduced as under :- Depreciation of Block of Assets Cost/Opening W.D.V. Rs. Rate of Dep. Depreciation Closing W.D.V. Rs Vehicles Commercial Addition during Asstt. Year 1995-96 8,5000,000 0.4 34000,000 51000,000 Addition during Asstt. Year 1996-97 eligible for pro-rata Depreciation 2222,540 0.2 444,508 1778,032 Vehicles Addition during Asstt. Year 1996-97 2225 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh third member's opinion in case of Garden Finance Ltd. v. Assistant Commissioner of Income-tax reported in 268 ITR 48 who permitted the petitioner to raise objections to the proposal of reopening in terms of decision of the Apex Court in case of GKN Driveshafts (India) Ltd. v. Income-Tax Officer and others reported in 259 ITR 19. Thereupon the petitioner raised detailed objections before the Assessing Officer which when were turned down the present petition came to be filed. 4. The Assessing Officer had recorded reasons for impugned notice of reopening. Such reasons read as under : "The assessee company is a non-banking finance company engaged in the business of financing, money lending and trading in shares and financing on lease of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at the higher rate of 40% as claimed and allowed while finalizing the assessment. Excess depreciation on motor vehicles(commercial) has been allowed by Rs.1,70,00,000 while computing taxable income, which has escaped assessment to that extent." 5. On the basis of said facts on record, counsel for the petitioner vehemently contended that the notice for reopening which has been issued beyond the period of four years from the end of relevant assessment year is wholly without jurisdiction. The petitioner had made true and full disclosures about its claim for depreciation at higher rate. The Assessing Officer had examined such claim and made no disallowance in the final computation in the scrutiny assessment that he farmed. Such assessment ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently followed in case of Deputy Commissioner of Income-tax v. Pradip N. Desai (HUF) reported in (2012) 341 ITR 277 (Guj) and in case of Commissioner of Income-tax v. Aravali Finlease Ltd. reported in (2012) 341 ITR 282(Guj.) 7. At the outset we may record that in the present case, we are not concerned with the validity of the belief of the Assessing Officer that income chargeable to tax had escaped assessment. We are far more concerned with the question whether the income chargeable to tax even if can be stated to have escaped assessment, same was for the reason of assessee not disclosing truly and fully all material facts. This would be relevant because in the present case admittedly the notice of reopening has been issued beyond a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said vehicles were given on lease. The lessee has used the said commercial vehicle for the business of running them on hire. We also draw your kind attention that, the re is no requirement in Section 32 or in the rules there under that the owner of the commercial vehicles shall use the vehicle himself for the business of hire. We rely on following decisions ....." 9. Thus full facts were laid before the Assessing Officer in context of the petitioner company's claim for depreciation at the higher rate on commercial use for running on hire. The petitioner in fact firmly asserted that though such vehicles were leased out, the lessee had used such vehicles for the business of running them on hire and that therefore, as per the statutory p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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