9911796707
TMI Blog2020 (5) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... Briefly stated, the facts of the case are that the assessee is engaged in the business of manufacturing and sales of textiles (yarn & fabrics) and generation of power. It e-filed its return of income on 28.09.2012 declaring total income of Rs. 4,94,32,33,840/-. The assessment was completed u/s 143(3) on 17.03.2015 at total income of Rs. 4,95,59,27,360/-. Thereafter, the Assessing officer issued notice u/s 148 dt. 15.11.2016 by recording the following reasons:- "The assessee e-filed its return of income for AY 2012-13 on 28.09.2012 declaring total income of Rs. 494,32,33,840/-, which was assessed u/s 143(3) at the total income of Rs. 495,59,27,360/- on 17.03.2015. On going through the records, it was noticed that assessee had made additions amounting to Rs. 52,55,72,612/- under the head wind mills at wind power generation unit in the depreciation chart and claimed additional depreciation of 20% (10% for less than 180 days) thereupon. Total depreciation claimed to the tune of Rs. 26,27,86,306/- (i.e. ½ of 80% + ½ of 20%=50%). The assessee was allowed additional depreciation of Rs. 5,37,14,642/- on new machinery. On going through the provisions of clause (iia) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on record by AO before initiating action u/s 148. Therefore, the observation of AO in the reasons recorded that there is a failure on the part of the assessee to disclose all material fact is incorrect. Thus, reopening the assessment u/s 148 on an issue which is already considered by AO in original assessment proceedings is only on account of change of opinion. On such change of opinion, reassessment proceedings initiated by him, even within a period of 4 years, is illegal and bad in law. For this purpose reliance is placed on following cases:- * CIT Vs. Hindustan Zinc Ltd. (2016) 241 Taxman 392 (Raj.) * ACIT Vs. Mangalam Cement Ltd. (2017) 148 DTR 329 (Jaipur) * ITO Vs. Techspan India (P) Ltd. & Anr. 255 Taxman 152 (SC) * PCIT Vs. Tupperware India Pvt. Ltd. (2015) 127 DTR 161 (Del.) 6. It was further submitted that the Ld. CIT(A) has confirmed the validity of reopening of reassessment by referring to clause (c) of Explanation 2 to section 147 according to which computation of excessive depreciation allowance is deemed to be a case where income chargeable to tax has escaped assessment. However, in the present case, the additional depreciation allowed by the AO on power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the original proceedings and an opinion has been formed by the Assessing officer and the claim of the assessee has been allowed, then on the same matter, the Assessing officer cannot initiate the reassessment proceedings disallowing such a claim made by the assessee. 9. For the purposes, it is relevant to examine whether in the instant case, the Assessing officer has examined the claim of additional depreciation in the original assessment proceedings and any findings recorded in the assessment order passed u/s 143(3) of the Act. In APB, Page 4, we find that in response to information sought by the Assessing officer u/s 142(1) dated 5.11.2014, the assessee has filed its submission dated 3.12.2014. At point no.5, the Assessing officer has sought information on "details of Fixed Assets on which additional depreciation of Rs. 19,09,306 is claimed and calculation thereof". In response, the assessee company has submitted as under: "The assessee has the honour to submit that the additional depreciation of Rs. 19,09,306/- is pertaining to the fixed assets in the nature of New Plant & Machinery acquired and installed in the previous year 2010-11 and used for less than 180 days in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter under examination by the Assessing officer was limited to claim of normal depreciation @ 80% as claimed by the assessee as compared to depreciation @ 10% on civil works (buildings) and @ 15% on electrical items (plant and machinery). The matter relating to claim of additional depreciation was therefore not examined by the Assessing officer. Where the matter has not been examined by the Assessing officer, there is no question of change of opinion as there is no formation of opinion at first place. Therefore, the contentions so advanced by the ld AR that it is a case of change of opinion and reassessment proceedings cannot be sustained on such change of opinion is not accepted. 13. Further, we find that in the reasons so recorded by the Assessing officer, he has stated that by virtue of amendment brought-in by the Finance Act, 2012, the claim of additional depreciation u/s 32(1)(iia) is allowable w.e.f 1.04.2013 relevant to assessment year 2013-14 which ex-facie suggest that such claim has been wrongly claimed and allowed in the original assessment proceedings without examination is clearly a case of excess claim of depreciation and jurisdiction has been rightly invoked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aipur) (Trib.) wherein AO disallowed additional depreciation on power generating plant on the ground that generation and distribution of electricity was inserted in sec. 32(1)(iia) for the first time by the FA, 2012 which is prospective in operation. It was held that the amendment cannot be read to negate the settled legal position that generation of electricity is akin to manufacture or production of an article or thing. The amendment by the FA, 2012 given an impetus to the view that generation of electricity is a manufacturing process. Further, once the AO has accepted the assessee claim of depreciation u/s 32(1)(ii), there is no reason why the assessee should be denied the claim of additional depreciation on the same assets u/s 32(1)(iia). It was further submitted that the said decision of the Coordinate Bench has since been affirmed by the Hon'ble Rajasthan High Court in case of Pr. CIT, Kota vs M/s Mangalam Cement Ltd (DB Appeal No. 211/2017 & 213/2017 dated 4.09.2017) wherein the Hon'ble High Court has held that "we are in complete agreement with the view taken by the Tribunal. No substantial question of law arises." Further, reliance in this connection was placed on followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generation or generation and distribution of power". Before the amendment inserted by the Finance Act, 2012, additional depreciation was not admissible on any plant or machinery acquired or installed by an assessee engaged in the business of generation and distribution of power and our reference was drawn to the Memorandum explaining the Financial Bill, 2012. It was accordingly submitted that there is no infirmity in the action of the ld CIT(A) where he has confirmed the disallowance of additional depreciation of Rs. 5,37,17,642/-. 21. We have heard the rival submissions and perused the material available on record. Firstly, we find that in respect of claim of additional depreciation of Rs. 11,60,381/- on energy saving devices of Rs. 1,16,03,810/- which have been acquired and installed during the year, there cannot be any dispute as the same is clearly allowable under section 32(i)(iia) of the Act and the amendment brought in by the Finance Act, 2012 doesn't in any manner impact such a claim of the assessee and thus, the disallowance so made of additional depreciation is hereby directed to be deleted. 22. In respect of additional depreciation of Rs. 5,25,57,261/- on windmills in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for an additional depreciation of 20% of the actual cost of such machinery and plant. It further provides that a machinery of plant should be a new machinery or plant (other than ships and aircraft) which has been acquired and installed after the 31st day of March, 2005. It further provides that the additional depreciation in new machinery or plant shall be allowed in the hands of the assessee who is engaged in the business of manufacture or production of any article or thing or in the business of generation or generation & distribution of power. In the instant case, it is not in dispute that new machinery or plant has been acquired and installed after the 31st March 2005. It is also not in dispute that the assessee has claimed depreciation u/s 32(1)(ii) of the Act. Once the AO has accepted the assessee's claim u/s 32(1)(ii) of the Act, we do not see a reason why the assessee should be denied the claim of additional depreciation on the same assets u/s 32(1)(iia) of the Act. 16.8 It is now a settled position as held by the Hon'ble Supreme Court and the various Co-ordinate Benches of the Tribunal that the process of generation of electricity is akin to manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X
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