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TMI Blog2015 (7) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... ee claims that the figures per the TAR are in fact per the ‘revised’ TAR, filed on 20.11.2003, which were however omitted to be considered by the AO while framing the assessment. In our clear view, there has been thus no consideration of the material being now relied upon by the A.O., i.e., in recording the reasons for the reopening and in issuing the notice u/s.148. We are unable to read any further limitation in law in the A.O. proceeding to initiate the reassessment under such a situation, except of course of ‘reason to believe’, on which aspect there is again no doubt, as discussed earlier (refer: Asst.CIT v.Rajesh Jhaveri Stock Brokers [2007 (5) TMI 197 - SUPREME Court ]. Though the ld. CIT(A) has made out a case of there being no provision in law in filing a revised TAR and, therefore, the assessee’s claim of having furnished fully and truly all material facts, as not correct, we are not inclined to dwell on that aspect of the matter inasmuch as, without doubt, the revised claim represents, by the assessee’s own admission, the correct claim of depreciation. Whether legally permissible or not, the AO is not constrained to take cognizance thereof or form an opinion on its basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . S. Padmaja ORDER Per Sanjay Arora (AM): This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-1, Mumbai ( CIT(A) for short), dated 29.03.2011 dismissing the assessee s appeal contesting its assessment u/s. 143(3) r/w s. 147 of the Income Tax Act, 1961 ( the Act hereinafter) for Assessment Year (AY) 2002-03 vide order dated 27.11.2007. 2. The assessee s challenge to the impugned order, which is on, both, the legal ground/s, as well as the merits of the adjustment/s made to the returned income, is per four grounds, as under: 1. That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals) [here-in-after referred to as Ld. CIT(Appeals)] has grossly erred in confirming the action of the AO in initiating the reassessment proceedings u/s 147 without appreciating the fact that the same had been done in utter disregard of the express provision of the Act on fresh application of mind on the same set of facts, more so when there was no failure on the part of the appellant to disclose truly and fully all the facts necessary for completion of the original assessment u/s 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income for the preceding years, were, correspondingly, decapitalized so as to avoid a claim of depreciation on an amount already claimed and allowed as revenue expenditure and, as such, a double claim by way of depreciation on sums liable to be decapitalized. The de-capitalization for the current year was at ₹ 2987.43 lacs. In the deprecation chart forming part of the return, however, the said reduction was for/under the first half and the second half of the year, i.e., under the columns put to use for 180 days or less and other , at ₹ 52.96 lacs and ₹ 2934.46 lacs respectively, and not from the opening written down value (WDV) of the relevant block of assets. The second reason for re-opening was that the reduction per the depreciation schedule forming part of the Tax Audit Report (TAR) was at ₹ 2975.07 lacs and ₹ 12.36 lacs for the first half and the second half of the year respectively. This led to a difference between the exigible depreciation allowance as per the two depreciation charts at ₹ 420.24 lacs. The figure as per the TAR, being certified by the Auditors, was more authentic. This led to the belief as to an excess claim and allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in the case of Amitabh Bachchan (supra) is, again, misconceived. The whole premise of the said decisions is that a change of opinion is not permissible. This is as the law does not authorize a review by the assessing authority of its order, which is thus impermissible in law. It is, however, an admitted fact in the present case that the AO had overlooked the assessee s revised claim of depreciation while framing the original assessment on 28/2/2005. Reference for this may be made to paragraph 4.1 of the assessee s letter dated 05.11.2007 (PB pages 91- 98), also reproduced at pages 4-6 of the assessment order, as well as paragraph B(1.1) of the assessee s written submissions in the appellate proceedings, reproduced at paragraph 4.4 of the appellate order. The assessee thereby seeks to correct its earlier claim, and which forms the basis of its claim of having disclosed fully and truly all material facts in relation to the computation of its income. The non-consideration of the revised, correct claim being patent, rather, admitted; manifest from the record, where, then, is the question of a change of opinion? The question of change of opinion would arise only in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon by the A.O., i.e., in recording the reasons for the reopening and in issuing the notice u/s.148. We are unable to read any further limitation in law in the A.O. proceeding to initiate the reassessment under such a situation, except of course of reason to believe , on which aspect there is again no doubt, as discussed earlier (refer: Asst.CIT v.Rajesh Jhaveri Stock Brokers [2007] 291 ITR 500 (SC). Though the ld. CIT(A) has made out a case of there being no provision in law in filing a revised TAR and, therefore, the assessee s claim of having furnished fully and truly all material facts, as not correct, we are not inclined to dwell on that aspect of the matter inasmuch as, without doubt, the revised claim represents, by the assessee s own admission, the correct claim of depreciation. Whether legally permissible or not, the AO is not constrained to take cognizance thereof or form an opinion on its basis; the sole criteria being its relevancy and credibility (refer: Pooran Mal v. DI (Inv.) [1974] 93 ITR 505 (SC)). The Revenue has also relied on case law, which has not been met by the assessee, viz. IPCA Laboratories Ltd. v. Dy. CIT [2001] 251 ITR 420 (Bom); Praful Chuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nizance or account of the corrected claim. The same would have also enabled the assessee to bring any other aspect of the matter, where apparent from the record, beneficial to it, to the fore. This is as the scope of the reassessment proceedings is restricted only to bringing the under-assessed income to tax (refer: CIT v. Sun Engineering Works (P.) Ltd. [1992] 198 ITR 297 (SC)). The asessee accordingly fails on this ground. 6. The fourth and final ground relates to a like adjustment made in determining the books profit u/s. 115JB of the Act. A company can provide for depreciation at different rates, adopting a different method of computing depreciation in books, which is to be consistent with the mandate of the Companies Act. If, as it appears, no part of the interest component stands charged to the operating statement (P L a/c), there is no occasion to or question of decapitalizing the same in the assessee s books of account, necessitating an adjustment to the book profit on account of revision in the book depreciation. We, accordingly, restore the matter back to the file of the assessing authority to allow the assessee an opportunity to satisfy the AO that the adjustment to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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