RANSAR INDUSTRIES LTD.,CHENNAI vs. DCIT, COIMBATORE

आदेश / O R D E R

PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the Order dated 06.08.2014 of Commissioner of Income Tax (Appeals)-1, Chennai, in for the AY 2005-06.

ITA No.2319/Mds/2014 :- 2 -:

2.0 Ground Nos.(i) & (viii) are general in nature which do not require specific adjudication.

3.0 Ground No.(ii) is related to the notice issued u/s.148 of Income Tax Act (in short ‘the Act’). The assessment in this case was completed by an Order dated 25.03.2013 u/s.143(3) r.w.s.147 of the Act. The Assessing Officer (hereinafter referred to as ‘AO’) has communicated the reasons for re-opening of the assessment which was discussed in the Assessment Order as under:

“On perusal of records it was found that the assessee company has claimed huge depreciation on windmill. The claim of additional depreciation of Rs. 89,81,651/- includes additional depreciation for the assets for which depreciation / additional depreciation have already been claimed during the earlier assessment years. As seen from the detailed statement of depreciation for the A.Y 2005-06, additional depreciation has been claimed in respect of the assets forming part of the opening WDV. Additional depreciation is not allowable in respect of the old plant and machinery. Additional depreciation is allowable only on the new assets acquired and installed during the P.Y relevant to the A.Y i.e., is allowable only in the year of acquisition and use and not year after year the WDV. Hence, there are reasons to believe that the income has escaped assessment due to inappropriate claim of depreciation on windmill. Hence, the assessment is reopened u/s.147 of the Income Tax Act.”

4.0 The re-assessment was completed on a total income of Rs.14,85,07,372/- disallowing the additional depreciation on wind mill amounting to Rs.3,24,38,932/-. The assessee went on appeal before the CIT(A) and Learned Commissioner of Income Tax(Appeal) [hereinafter referred to as ‘Ld.CIT(A)’] confirmed the addition on account of additional depreciation and allowed the normal depreciation on wind mill. However, before the Ld.CIT(A) in Ground No.2, the assessee has challenged the validity of re-opening the assessment, as a change of opinion which was ITA No.2319/Mds/2014 :- 3 -: not adjudicated by the Ld.CIT(A). Therefore, the assessee filed appeal before this Tribunal challenging the validity of re-opening of assessment and relief for claim of additional depreciation. The Ld.A.R argued that the issue regarding the allowability of depreciation was examined by the AO in original assessment and on the same issue, the assessment was reopened which is a mere change of opinion and not permitted as per law. This ground was raised before the Ld.CIT(A) and the Ld.CIT(A) has passed the order without adjudicating the Ground No.2. Therefore, the Learned Authorized Representative (hereinafter referred to as ‘Ld.AR’) argued that the case should go back to the file of the Ld.CIT(A) to decide the issue regarding re-opening of assessment. On the other hand ld.D.R relied on the lower authorities orders.

5.0 We heard the rival submissions and perused the material placed on record.

We have observed that the assessee has raised the ground of validity of re-opening of assessment before the CIT(A) and the Ld.CIT(A) has not adjudicated the ground. Therefore, we remit the matter back, to the file of the Ld.CIT(A) with a direction to adjudicate the validity of issue of notice u/s.148 and pass Orders afresh. Accordingly, we set-aside the orders of the Ld.CIT(A) and issue remitted to the file of the CIT(A).

ITA No.2319/Mds/2014 :- 4 -: 6.0 In the result, the appeal of the assessee allowed for statistical purposes. Order pronounced in the Open Court on 31st January, 2017, at Chennai.