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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P.GEORGE
आदेश / O R D E R PER ABRAHAM P.GEORGE, ACCOUNTANT MEMBER:
The assessee in this appeal, assailing an order dated 28.09.2017 of Commissioner of Income Tax(A) has raised the following grounds: 1. For that the order of the Commissioner of Income Tax (Appeals) is contrary to the law, facts and circumstances of the case to the extent prejudicial to the interest of the assessee and is opposed to the principles of equity, natural justice and fair play. 2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdiction. 3. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the reopening was bad in law. 4. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the reopening was done on a mere change of opinion.
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For that the Commissioner of Income Tax (Appeals) erred in holding that the Toyota Innova Car operated by the appellant was eligible for depreciation at the rate of 25% (half of 50%) of the written down value. 6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Toyota Innova Car which is acquired by the appellant after 01.01.2009 but before 01.10.2009 is eligible for depreciation at the rate of 50% as per clause (via) of Entry 111(3) of para A of the New Appendix to the Income Tax Rules. 7. For that the appellant objects to the levy of interest u/s.234B. PRAYER
For these grounds and such other grounds that may be adduced before or during the hearing of this appeal it is most humbly prayed that the Hon’ble Tribunal may be pleased to i. Quash the order of reassessment or ii. Allow the depreciation at the rate of 50% or iii. Pass such other orders as the Hon’ble Tribunal may deem fit.
A reading of grounds 2 to 4 shows that assessee is aggrieved on the re-
opening done for the impugned Assessment Year.
Ld. Counsel for the assessee submitted that original assessment for the
impugned Assessment Year was completed on 23.12.2011 u/s.143(3) of the Income
Tax Act (in short “the Act”). As per the Ld.AR, the said assessment was completed
after scrutinizing the details filed by the assessee. Submission of the Ld.AR was that
the assessee was issued a notice u/s.148 of the Act on 30.03.2015, seeking re-
opening of the assessment. As per the Ld.AR, assessee had through a letter dated
30.04.2015 requested the AO to furnish the reasons for re-opening. However, as per
the Ld.AR, this was never supplied to the assessee. According to the Ld.AR, the re-
assessment which was completed on 28.12.2015 clearly indicated that the re-
opening was done for disallowing a part of the claim of depreciation preferred by the
assessee on a Toyota Innova Car. As per the Ld.AR in the original assessment, this
was considered by the AO as a commercial vehicle and depreciation allowed.
However, according to the Ld.AR, in the re-assessment, the Toyota Innova Car was
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not considered as a commercial vehicle and the AO denied the depreciation available
to commercial vehicles. As per the Ld.AR, the re-assessment was made on a
change of opinion and there were no fresh tangible materials with the AO. Further,
as per the Ld.AR, the AO had also failed to furnish the reasons for the re-opening.
Relying on the judgments of the Hon’ble Apex Court in the case of CIT v. Kelvinator
of India Ltd., reported in 320 ITR 561 and GK Drive Shaft (India) Ltd. Vs. ITO (2002)
70 CCH 1264 ISCC Ld.AR submitted that the re-assessment done was bad in law.
Per contra, the Ld.DR strongly supporting the orders of the authorities below,
submitted that the re-assessment was justified since assessee had claimed a Toyota
Innova Car to be a commercial vehicle. As per the Ld.DR, this aspect was never
examined by the AO during the course of the original assessment proceedings.
Contention of the Ld.DR was that it was not on account of any change of opinion that
the re-assessment was done. According to him, the assessee had no case that
Toyota Innova Car was a commercial vehicle. As per the Ld.DR, the re-assessment
was validly initiated and done.
We have heard the rival contentions and perused the orders carefully. It is not
disputed by the Revenue and that the assessee was not given the reasons for which
the re-opening was done, despite a specific request from the assessee in this regard.
By virtue of the judgment of the Hon’ble Apex Court in the case of GK Drive Soft,
supra, non-furnishing of reasons, despite a request from assessee, can render such
re-opening invalid. That apart, there was no fresh material available with the AO for
resorting to a re-opening. The re-opening was done only for restricting the claim of
depreciation on a Toyota Innova Car and it was not based on any fresh material. The
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Hon’ble Delhi High Court in the case of CIT v. Orient Craft Ltd., reported in 354 ITR 536 has clearly held that without any tangible material which came into the possession of the AO, after the original assessment, a re-assessment could not be done only based on the material filed by the assessee along with its return of income. Here in the case before us re-opening was done after four years from the end main Assessment Year and proviso to Sec.147 clearly applied. We are of the view that the re-opening done on the assessee had no legs to stand. Impugned orders are set aside.
In the result, the appeal of the assessee is allowed.
Order pronounced in the Open Court in June 21, 2018, in Chennai.
Sd/- Sd/- (एन.आर.एस. गणेशन) (अ�ाहम पी. जॉज�) (N.R.S. GANESAN) (ABRAHAM P.GEORGE) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER
चे�नई/Chennai, /दनांक/Dated: June 21, 2018. TLN
आदेश क( &�त0ल1प अ2े1षत/Copy to: 1. अपीलाथ%/Appellant 4. आयकर आयु3त/CIT 5. 1वभागीय &�त�न�ध/DR 2. &'यथ%/Respondent 6. गाड" फाईल/GF 3. आयकर आयु3त (अपील)/CIT(A)