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TMI Blog2024 (8) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... ion claimed by the assessee on the above issue. The impugned notice u/s 148 is therefore, not tenable and is accordingly quashed and set aside - Decided in favour of assessee. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE NIRAL R. MEHTA Appearance: For the Petitioner(s) No. 1: Mr B S Soparkar (6851) For the Respondent(s) No. 1: Ms Maithili D Mehta (3206) ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Standing Counsel Ms. Maithili D. Mehta for the respondent. 2. Having regard to the issue involved which is in a very narrow compass, with the consent of learned advocates for the respective parties, the matter is taken up for hearing. 3. Rule returnable forthwith. Learned Senior Standing Counsel Ms. Maithili D. Mehta waives service of notice of rule on behalf of the respondent. 4. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for quashing and setting aside the notice issued under section 148 of the Income Tax Act, 1961 (For short the Act ) dated 31.03.2021 for Assessment Year 2014-2015. 5. Brief facts of the case are that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing increase in exchange rate liability = Rs. 204,38,14,367/- (4) Additional depreciation 10% claimed on Rs.496,07,54,080/- being P M of Rs.459,57,93,053/- put to use on or after 01.10.2013 plus Rs. 36,49,61,027/- being increase in exchange rate liability = Rs. 49,60,75,409/- Total depreciation claimed Rs.2991 41,66,989 (2700,22,20,657 37,20,56,556 + 204,38,14,367 +49,60,75,409) Note. Actual depreciation claimed and allowed is Rs 2991:11,66,989/- which is less than 30 lakh calculated which appears that assessee has mistakenly calculated by taking figure of 4 as 1. It is clear that assessee has claimed additional depreciation on exchange rate fluctuation of Rs. 1017,23,59,719/- arisen on 29.09.2013 being its liability enhanced on earlier years Imported plant and machinery acquired and put to use. It is also evident from the fact that during the FY 2013-14 (AY 2014-15) on or before 30.09.2013 (on 29.09.2013 to be exact) new P M only of Rs. 4,67,12,120 acquired and put to use, This has resulted in claiming of excess depreciation of Rs.203,11,71,943/- 3. Analysis of information collected/received: Scrutiny of records, it is noticed from balance sheet, profit and loss account, notes on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment, irrespective of the method of accounting adopted by the assessee, shad be added to or as the case may be, deducted from the actual cost of the assets and the amount arrived at after such addition or deduction shall be taken to be the actual cost of the asset or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the capital asset as aforesaid. The combined reading of above mentioned provisions gives the following conclusions: 1. Additional depreciation @ 20 percent (10 percent, if put to use less than 180 days in the year of acquisition) of cost of acquisition of new plant and machinery is allowable. 2. Effect of fluctuation in exchange rate on liability in foreign currency for acquiring a plant and machinery from outside India or foreign loan for such acquisitions of plant and machinery has to be given in written down value of assets and depreciation is allowable accordingly. 3. Additional depreciation is not allowable on addition in value of old plant and machinery due to exchange rate fluctuation as it is allowable only on new machinery acquired and put to use during the year. It is evident from these two tables that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned advocate Mr. B.S. Soparkar submitted that there is no fresh tangible material distinct from what was made a part of the assessment proceedings being recorded in the reasons and reopening is sought to be made based on material already on record. It was submitted that in absence of fresh tangible material after the scrutiny assessment is over, reopening in such circumstances is not permissible. Reliance was placed on the decision in case of Shanti Enterprise reported in (2016) 76 taxmann.com 184. 14. It was further submitted that as per proviso to section 147 of the Act, reopening beyond the period of four years from the end of relevant assessment year is also not tenable as there is no failure on part of the assessee to disclose fully and truly all facts necessary for the assessment. It was submitted that on perusal of the above reasons recorded, it clearly shows that the case records available was scrutinised and only on basis of audit objection, the reopening is made without there being any independent application of mind on part of the Assessing Officer. It was also pointed out that there is no reason to reopen the assessment as there is no failure on part of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent opinion. (ii) With reference to paragraphs 3 (3.1 to 3.4) of the petition, I deny the contents of the said para in its entirety. I state that the contention raised by the assessee is without any base and not tenable in law. The notice u/s. 148 of the Act has been issued to the assessee after following the due procedure of law mandated in the Income-tax Act, 1961. All the statutory requirements as per the Income-tax Act have been followed prior to the issuance of notice. The Assessing officer has recorded the reasons in writing after due application of mind and forming independent opinion. The procedural requirements such as proper recording of reasons, issuing of notices within limitation date and forwarding of reasons have been met. Notice u/s 148 was issued after recording reasons as per provisions of sub-section (2) of section 148 read with section 151 of the Income Tax Act. Necessary approvals of the competent authority were also taken before such reopening proceedings. Further the, objections raised by the assessee against the Notice issued u/s. 148 of the Act disposed off in accordance with the guidelines laid down by the Hon'ble Apex Court in the case of GKN Drivesha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para in its entirety I state that the contention raised by the assessee is without any base and not tenable in law. Scrutiny of records and from balance sheet, profit and loss account, notes on account, 3CD report and computation of income, it revealed that the assessee has claimed depreciation of Rs. 3049,91,75,122/-. However, on the basis of analysis of records and on the basis of facts and after proper investigation from the materials on record, it is substantiated that during the year under consideration, the assessee has wrongly claimed additional depreciation of Rs. 203,11,71,943/- on exchange rate fluctuation of Rs. 1017,23,59,719/-. Hence, it is found that income of Rs.203,11,71,943/- for the year under consideration has escaped assessment within the meaning of section 147 of the I.T. Act and is required to be disallowed. The contention raised by the petitioner is not acceptable. It is well settled that audit objection on the point of fact can be a valid ground for reopening of assessment. In this regard reliance is placed on the decision of Hon'ble Supreme Court in the case of CIT vs. P.V.S. Beedies Pvt. Ltd (237 ITR 13). The Hon'ble Supreme court ruled that, We ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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