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TMI Blog2017 (7) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee “can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return. The inevitable conclusion, therefore, in the present case, is that the ITAT was in error in holding that the assessment for AY 2008-09 should be treated as ‘pending’ whereas in terms of the above CBDT circular it should be treated as final in respect of which no scrutiny are to be started. - Decided in favour of the Assessee Addition on account of the claim of depreciation on software - Held that:- ITAT has re-examined every shred of evidence to come to clear conclusion that the Assessee was not able to demonstrate the genuineness of the purchase software. Further the story put forth by the Assessee that the software having been handed over to Sobha was also not substantiated by any documentary evidence or even otherwise. On facts, therefore, the concurrent opinions of the AO, CIT(A) and the ITAT to the effect that the purchase of the software was, in fact, a bogus transaction not entitled to depreciation cannot be said to suffer from any legal infirmity warranting interference.- Decided in favour of the revenue - ITA 581/2016, ITA 707/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 10th March, 2011 was issued by the AO to the Assessee under Section 153A(1) of the Act and asking it to file its return of income in respect of AYs 2004-05 to 2009-10. In response thereto the Assessee/AO filed a return on 28th April, 2011 declaring the same income as was originally declared in the return filed under Section 139(1) of the Act. Assessment orders 8. In the consequent assessment order dated 30th December, 2011 for AY 2008-09, the AO made an addition of ₹ 84,84,910 under the head bogus depreciation claimed . The AO held that the Assessee had not filed any document about the use of the software. The software was supposed to have been purchased from M/s. Macro Infotech Limited ( MIL ). A detailed questionnaire had been issued to the Assessee on 19th August, 2011 requiring inter alia the Assessee to furnish the nature and description of the product/goods purchased from MIL, copies of the purchase bills obtained from MIL as well as copies of the bank statement of the Assessee evidencing payments. 9. The AO noted that the head office and site office of MIL was shown to be in Dehradun and a branch in Karol Bagh. However, on verification of both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the assessment orders for AY 2008-09; 2009-10 and 2010-11. Order of the ITAT 13. In the impugned order, the ITAT examined again the evidence furnished by the Assessee in support of the purchase of the software of the value of over ₹ 4.24 crore. It noted that there was no purchase of any hardware corresponding to the extent of purchase of the software. How the software was installed and how it was used was not demonstrated by the Assessee. All payments had been made in August, 2007. For claiming depreciation the Assessee had to establish inter alia that the asset was partly or fully owned by it and used it for the purposes of business. Further the act of providing software to Sobha was not established. The Assessee was only a confirming party in the cancellation agreement which stated that the software was destroyed and compensation was waived by the party of the first part (which was not the Assessee) but the seven persons who were different companies and individuals. It was not shown how those seven persons had the right to waive compensation in respect of the software which was the property of the Assessee and not of the seven persons. Even in the cancell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the material on the basis of which the AO came to the conclusion about income having escaped assessment during the block assessment period was not forthcoming in the present case. Mr Syali submitted He that for AYs 2009-10 and 2010-11 the matter should go back to the AO for afresh examination of all materials with the Assessee being provided copies of the material that is adverse to it and which formed basis of the additions made by the AO. Submissions of Senior Standing counsel for the Revenue 18. On the other hand, Mr. Asheesh Jain, learned Senior Standing Counsel for the Revenue, submitted that the view taken by the ITAT that the assessment for AY 2008-09 should be taken to be pending was a plausible view. On merits he pointed out that the evidence placed on record by the Assessee was examined thoroughly by the CIT(A) as well as the ITAT and there was a categorical finding that the Assessee had not been able to show that the purchase of software was genuine. Accordingly it is submitted that the finding of the ITAT, concurrent with the findings of the AO and the CIT(A) in this regard did not call for any interference. AY 2008-09 19. The above submissions have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on 27th March, 2010. It has held by this Court in Indu Lata Rangwala v. Deputy Commissioner of Income Tax (supra) that the mere processing of a return under Section 143(1) of the Act and the sending of an intimation to the Assessee will not make it an assessment . At the same time, the consequences of the Department not issuing a notice under Section 143(2) of the Act within the time stipulated as far as the filing of the return in normal course is concerned was not examined either in Commissioner of Income Tax v. Kabul Chawla (supra) or Indu Lata Rangwala v. Deputy Commissioner of Income Tax (supra). As notice by the Punjab Haryana High Court in Vipan Khanna v. Commissioner of Income Tax (supra), the CBDT circular makes it abundantly clear that once an Assessee does not receive a notice under Section 143(2) of the Act within the period stipulated then such an Assessee can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return. 22. The inevitable conclusion, therefore, in the present case, is that the ITAT was in error in holding that the assessment for AY 2008-09 should be treated as pending where ..... X X X X Extracts X X X X X X X X Extracts X X X X
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