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TMI Blog2018 (3) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment is on a mere change of opinion. AO in the original assessment proceedings, has not expressed any opinion with regard to the applicability of Explanation 10 to section 423(1), however, it is evident that he had examined the issue in the original assessment proceedings. If he had any doubt he certainly would have mentioned in the assessment order that in the event of the receipt being held as capital in nature, the subsidy received should have been reduced from the actual cost for computing depreciation. Having not stated so in the original assessment order cannot lead to the conclusion that the Assessing Officer has considered the issue at all. That being the case, in the absence of any fresh tangible material, the re–opening of assessment under section 147 in the present case is invalid. - Decided in favour of assessee. - ITA no.5768/Mum./2015, ITA no.5769/Mum./2015, ITA no.5770/Mum./2015 And ITA no.250/Mum./2016 - - - Dated:- 28-2-2018 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For The Revenue : Ms. Pooja Swaroop For The Assessee : Shri Salil Kapoor a/w Shri Sumit Lal Chandani ORDER PER BENCH This bun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, in the absence of any fresh material, the reasons recorded, notice issued under section 148 and re assessment are illegal, bad in law and without jurisdiction. 4. Since grounds no.4, 5 and 6 raised as additional grounds are only extension of main ground no.1 and further, since, the issues raised in these grounds are purely legal and jurisdictional issues going to the root of the matter and can be decided on the basis of facts available on record, we admit the additional grounds for adjudication. 5. As stated earlier, in grounds no.1, 4, 5 and 6, the assessee has challenged the validity of the assessment order passed under section 143(3) r/w section 147 of the Act. In ground no.2, assessee has challenged the reduction of entertainment tax subsidy from the cost of assets for the purpose of depreciation. 6. Brief facts are, the assessee is a company engaged in the business of multiplex theatre. For the assessment year under dispute, the assessee filed its return of income on 23rd September 2008, declaring total income of 7,25,29,883 under the normal provisions and book profit of 7,65,62,158 under section 115JB of the Act. The return of income filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment which is legally impermissible. In support of his contention, the learned Authorised Representative relied upon the following decisions: i) CIT v/s Kelvinator of India, 320 ITR 561; ii) Hindustan Liver Ltd v/s R.B. Wadkar, 268 ITR 332; iii) Sabh Infrastructures Ltd. v/s ACIT, 398 ITR 198; iv) Indulata Rangwala v/s DCIT, 384 ITR 337; and v) NDT Systems v/s ITO, 363 ITR 603. 8. Learned Authorised Representative submitted, even otherwise also the issue on which the assessment was re opened under section 147 of the Act having already been decided in favour of the assessee the re opening under section 147 of the Act becomes a futile exercise. He submitted, so far as the nature of entertainment tax subsidy is concerned, there cannot be any manner of doubt that it is in the nature of capital receipt, hence, not taxable. He submitted, not only the Hon ble Supreme Court in case of CIT v/s Chaphalkar Brothers, [2018] 400 ITR 279, has held the entertainment tax subsidy provided by the Government to multiplex theatre complexes as capital in nature, but, the Hon'ble Jurisdictional High Court in assessee s own case has also held so. He submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as revenue in nature and accordingly, added it to the income of the assessee. Therefore, it is evident that the Assessing Officer has examined the issue of applicability of section 43(1) Explanation 10 during the original assessment. From the reasons recorded for re opening of assessment under section 147 of the Act which is reproduced by the Assessing Officer in the impugned assessment order it is evident that the formation of belief for escapement of income is on the reason that the entertainment tax subsidy received by the assessee should be reduced from cost of assets, thereby, no depreciation is allowable to the assessee on such assets. From the reasons recorded, it is very much evident that at the time of recording of reasons for re opening of assessment no fresh tangible material was available with the Assessing Officer. On mere re visit and re appraisal of the materials already available on record and considered by the Assessing Officer in original assessment proceedings, the Assessing Officer formed an opinion that income has escaped assessment. Thus, it is patent and obvious that the re opening of assessment is on a mere change of opinion. Though, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim of depreciation. Therefore, grounds raised are allowed. 11. In the result, assessee s appeals for A.Y. 2008 09 and 2009 10 are allowed. ITA no.5770/Mum./2015 Assessee s Appeals for A.Y. 2011 12 12. The only effective ground raised by the assessee reads as under: Appellant prays that the entertainment tax of 4,44,52,684 collected during the year under consideration cannot be reduced from the WDV and block of assets for the purpose of claim of depreciation by applying Explanation 10 to sec. 43(1) of the Act. 13. While deciding the issue raised in ground no.2 by the assessee in its appeal being ITA no.5768/Mum./2015, we have allowed assessee s claim of depreciation. Following our decision therein vide Para 10 above, we allow assessee s claim of depreciation. Ground raised is allowed. 14. In the result, assessee s appeal for A.Y. 2011 12 is allowed. ITA no.250/Mum./2016 Revenue s Appeal for A.Y. 2011 12 15. The only effective ground raised by the Revenue reads as under: On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in deleting the addition made by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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