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TMI Blog2018 (1) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... 01. 3.Two issues arise for consideration in this writ petition. Firstly, whether the respondent can be justified in holding that the petitioner has not opted to pay tax under Section 7-C of the TNGST Act. The second issue for consideration is whether the respondent can re-open the assessment without there being a prior order from the Commissioner in accordance with Rule 15(5-B) of the TNGST Rules. On the first issue, it is seen that the petitioner while filing the return for the relevant assessment year, opted to pay tax in accordance with Section 7-C of the TNGST Act and computed the tax payable at 2% viz., Rs. 37,600/-. This return was processed and the nature of work done by the petitioner being 'works contract', the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision Bench of this Court in the case of Commissioner of Income-tax v. M/s.Kikani Exports P. Ltd., in TCA No.330 of 2013 etc., batch dated 09.09.2014. The substantial question of law, which arose for consideration before the Hon ble Division Bench was whether the return of income filed by the assessee under Section 139(1) of the Income Tax Act claiming depreciation can be treated as exercising of option before the due date as prescribed in second proviso to Rule 5(1A) of the Income Tax Rules. This question was answered in favour of the assessee and against the revenue on the following terms:- "16. Short of repetition, the issue that arise for consideration is for the purpose of claiming depreciation, whether the assessee should exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in exactitude what he claims under different heads of depreciation. Schedules DOA and DEP in Form ITR # 6 contain the break up of various heads under which depreciation can be claimed. All that the second proviso to Rule 5(1A) of the Income Tax Rules states is that the assessee has to exercise the option before the due date for furnishing the return of income. In other words, if the option is exercised after furnishing of the return of income under sub-section (1) of Section 139, it is of no avail. This assumes importance, as no procedure is prescribed for exercising the option. Form ITR- 6 gives the methodology on which depreciation can be claimed and therefore, the statue did not provide for any other method to exercise the option except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessees are selected and their registration numbers are to be intimated to the assessing officer on or before 15th June of every year for detailed scrutiny of accounts and passing assessment orders. The petitioner s specific case is that the procedure under Rule 15(5-B) of the TNGST Rules has not been followed. 8.In the written instructions given to the learned Special Government Pleader by the assessing officer vide his letter dated 20.12.2007, there is no whisper about adherence to the procedures contemplated under Rule 15(5-B) of the TNGST Rules. Therefore, the petitioner is entitled to succeed on the second question as well. In the written instructions, the respondent has referred to the power conferred under Section 16-AA of the TN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d while deciding the case in favour of the assessee, it was held as follows: "As rightly pointed out by the learned counsel for the petitioner, the question of apportionment at 70:30 would be only in respect of regular assessment and not in the case of assessment opted for composition under Section 7-C of the Tamil Nadu General Sales Tax Act. Given the fact that the method of composition of payment of tax is a choice of assessment given to the assessee as an alternative to the regular assessment and the process of the assessment being on the entire turnover to be assessed at 4%, the mere fact that the petitioner's business was subjected to inspection and there are incriminating materials, by itself is no ground for rejecting the praye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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