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TMI Blog1991 (4) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ial depreciation in the form of return and, therefore, it cannot be said that the assessee had failed to disclose fully and truly all material facts necessary for its assessment within the meaning of section 147(a) of the Income-tax Act, 1961 ?" " The assessee had installed items of new machinery during the assessment years 1949-50 to 1954-55 in respect of which it was entitled to and was allowed initial or further depreciation at the rate of 20% of the cost of the new machinery under section 10(2)(vi), proviso, clause (c) of the Indian Income-tax Act, 1922. While completing the assessments under reference under section 143(3), the Income-tax Officer had not accepted the assessee's claim for depreciation as such. He made his own calculati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation in all these years was on account of the assessee's failure to disclose fully and truly all material facts necessary for the assessment. It is common ground that unless it could be held that the under-assessments or excessive allowance of depreciation was due to the assessee's failure to do so, the reopening of the assessments would be invalid. The Appellate Assistant Commissioner and the Tribunal have given a finding that there was no obligation on the part of the assessee to point out to the Income-tax Officer that the assessee had been granted initial depreciation during the assessment years 1949-50 to 1954-55 and that the aggregate of all depreciations ought not to have exceeded the cost of the plant or machinery. They conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to believe that the income has escaped assessment is not enough to give the Income-tax Officer jurisdiction to reopen an assessment under section 147(a). There must also be material to show that the assessee failed to disclose fully and truly all material necessary for the assessment. The Supreme Court, in the case of Calcutta Discount Co. Ltd. [1961] 41 ITR 191, has held long back that the duty of the assessee is to disclose primary facts and it is for the Income-tax Officer to draw correct inferences of facts or law from the primary facts. This view has been reaffirmed by the Supreme Court in a number of subsequent cases. The next provision to be considered is the proviso, clause (c) to section 10(2)(vi) of the 1922 Act, which reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticular asset the cost of which included earth work and masonry work. The details of the break-up were not given. The Income-tax Officer could have, no doubt, found the break-up of the cost with a little probe. But it could not be denied that it was primarily for the assessee to give the break-up of the cost. It is in this background that the Supreme Court observed that whether there was nondisclosure of primary facts as to the cost of the assets was basically a question of fact and the Tribunal had found that the assessee had not disclosed primary facts. Likewise our court's judgment in Technocraft Industries v. J. C. Shan, Second ITO [1990] 186 ITR 514 is also not applicable to the facts of the case. Having regard to the discussion abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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