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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI RAMIT KOCHAR
Per Saktijit Dey, Judicial Member:
These cross appeals and CO are directed against consolidated order of Ld. CIT(A)-XXI, Mumbai dated 20.03.09 pertaining to assessment year 2001- 02.
At the outset, we will take up assessee’s appeal in ITA No.3417/M/2009. Assessee has raised the following grounds:
2 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) “Being aggrieved by the order dated March 20, 2009 passed under section 250 of the Income-tax Act, 1961 (hereinafter referred to as the Act), by the Learned Commissioner of Income Tax (Appeals) - XXI, Mumbai, [hereinafter referred to as the CIT(A)], the Appellant submits the following Grounds of Appeal for your sympathetic consideration:
1) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding that the Gateway Digital Switch (GDS) is not 'computer' within the meaning of entry 111(5) of Appendix I to the Income-tax Rules,1962 and thereby restricting rate of depreciation to 25% as applicable to the general category of 'Plant & Machinery' on the written down value of GDS amounting to Rs.51,78,15,649/- instead of allowing 60% as applicable to 'computer'.
2) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in restricting depreciation to 25% (applicable to the general category of Plant & Machinery) instead of 60% claimed by the Appellant on the incidental charges of Rs.2,00,60,320/- paid for installation and commissioning of highly integrated and sophisticated computerised billing and accounting system viz., "Interconnect System - Traffic Accounting System" comprising of hardware and software which in the impugned appellate order itself has been upheld as qualifying to be 'computer' by the learned CIT(A) and consequently depreciation has been allowed thereon @ 60% by the learned CIT(A).
3) It is prayed that the Assessing Officer may kindly be directed to grant interest under section 244A on the refund, if any arising out of above grounds, in accordance with the law.
The Appellant craves leave to add, alter, amend or withdraw the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appellate hearing.”
In addition to the above said grounds raised in the memorandum of appeal, on 27.07.12 assessee has filed a petition before the Tribunal seeking permission to urge the following additional grounds challenging the validity of notice issued under section 148 and the reassessment proceedings under section 147 of the Act. “4) On the facts and circumstances of the case, the notice dated March 30,
3 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) 2006 issued under Section 148, though issued within four years from the end of the relevant assessment year, is ab inito void and bad in law and therefore, the reassessment proceedings deserve to be quashed on the following counts – no new I tangible material has been brought on record at the time of - reassessment;
- the reassessment is based on mere change of opinion.
The Appellant prays that the notice issued under Section 148 dated March 30, 2006 be quashed and entire reassessment proceedings held to be ab initio void and bad in law.
The Appellant craves leave to add to, alter, amend or withdraw the above Ground of Appeal and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.”
As the issue raised by the assessee in the additional grounds are purely legal issues affecting the jurisdiction of the AO, hence, goes to the root of the, we propose to dispose of the additional grounds at the first instance.
The Ld. D.R. has raised a preliminary objection that the assessee having not raised the issue relating to validity of the assessment either at the assessment stage or before the first appellate authority it cannot be entertained at this stage unless the assessee shows sufficient cause for having not raised the ground in course of earlier proceeding.
5 The Ld. Sr. Counsel contesting the argument of Ld. D.R. submitted that the validity of reopening of the assessment under section 147 being a purely legal and jurisdictional, issue can be raised at any stage as facts relating to such issue are available on record and do not require going into new facts. Therefore, relying upon certain judicial precedents as referred to in the petition dated 27.07.12 Ld. Sr. Counsel for the assessee pleaded for admission of the additional grounds.
Having considered the submissions of the Ld. Counsels vis-à-vis the facts and materials on record as well as judicial pronouncements cited before
4 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) us we are of the view that the issue raised by the assessee in the additional grounds being purely legal issues and going to the root of the matter as if affects the very jurisdiction of the assessment proceeding, the assessee is entitled to raise such an issue even at this stage of the proceeding. Further, we are inclined to entertain the additional grounds raised by the assessee as they do not require going into fresh facts and can be decided on the basis of facts and materials already available on record. For coming to such conclusion we rely upon the decisions of the Hon’ble Supreme Court in the case of “National Thermal Power Co. Ltd.” 229 ITR 383 & “Jute Corporation of India” 187 ITR 688 and the decision of the Hon’ble Jurisdictional High Court in the case of “CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd.” (2012) 349 ITR 336 (Bom.).
Having held so, we will deal with the facts of the case. Briefly stated, the assessee during the relevant period was a Government of India Company in the name and style of Videsh Sanchar Nigam Ltd. For the assessment year under consideration assessee had filed its return of income on 31.10.01 declaring total income of Rs.1972,05,06,220/-. Subsequently, assessee filed a revised return of income on 31.03.03 declaring total income of Rs.1869,68,46,000/-. Assessment in case of the assessee was completed under section 143(3) of the Act vide order dated 25.11.03 determining the total income of Rs.2283,11,94,609/-. Subsequently, as it appears, on verifying the assessment records the AO formed an opinion that the assessee has claimed excess depreciation by treating certain assets as computers instead of plant & machinery. Accordingly, after recording reasons for formation of belief that income has escaped assessment or has been under assessed, AO issued a notice under section 148 of the Act on 30.03.06. During the reassessment proceedings, though, the assessee objected to the proposed disallowance of depreciation on GDS and interconnect tax audit system (TAS) claiming them
5 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) to be part of computer system, hence, eligible for depreciation at the rate of 60% and in support of such claim furnished an opinion from a technical expert but the AO was not convinced with the same. He observed that GDS system does not process any data or generate any new entity. He therefore held that GDS is to be treated as plant & machinery and not computer and the proper rate for depreciation is 25% which was also the decision by the AO in the assessment year 2000-01. Similarly, the AO also held that interconnect system TAS is also not computer but part of plant & machinery, hence depreciation at the rate of 25% is allowable. Accordingly, he completed the assessment. Being aggrieved of such decision of the AO assessee preferred appeal before the Ld. CIT(A).
The Ld. CIT(A) after considering the submissions of the assessee during the appellate proceedings disallowed assessee’s claim of depreciation at the rate of 60% by treating it as a computer as far as GDS is concerned. As far as interconnect system TAS is concerned, Ld. CIT(A) after considering the submissions of the assessee and facts and materials on record observed that the same is nothing but a combination of computer system and software. He observed, hardware of interconnect TAS consisting of input/output, storage and processing devices qualifies as computer. He also observed that software is also an integral part of computer system. Further, he noticed that the assessee has not claimed entire software expenditure as revenue. He therefore held that the assessee would be entitled for depreciation on hardware and software systems of TAS. However, he found that there is also another component to the value of the WDV of the TAS system viz. installation and commissioning expenses of Rs.2,00,60,320/-. As far as this component of expenditure is concerned, Ld. CIT(A) observed that assessee has not furnished details to prove that these expenses are purely in the nature of labour and consultancy charges for installation of hardware and software, hence, they
6 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) cannot be considered to be part of computer expenses. He therefore upheld the allowance of depreciation at the rate of 25% by AO treating the same as plant & machinery. Being aggrieved of the aforesaid decision of the Ld. CIT(A), the assessee is before us. The Department has also preferred an appeal challenging the partial relief granted by the Ld. CIT(A) which will be dealt with at the appropriate stage while dealing with Department’s appeal.
Ld. Sr. Counsel, Shri Dinesh Vyas appearing for the assessee submitted, the reopening of assessment is invalid as no new tangible material has been brought on record at the time of reopening of the assessment/recording of reasons. The Ld. Sr. Counsel referring to the reasons recorded, copy of which is placed at page 2 of the paper book, submitted a reference to the reasons recorded would show that the AO has no new material or information available with him for formation of belief that income has escaped assessment. He submitted, the AO only reviewing or revisiting the materials available on record which were considered at the time of original assessment proceedings has reopened the assessment. Further, explaining Ld. Sr. Counsel submitted, in the tax audit report filed by assessee along with the return of income in compliance to section 44AB of the Act all materials/informations relating to claim of depreciation on GDS as well as interconnect TAS was disclosed. He submitted, in course of the original assessment proceeding under section 143(3) of the Act, the AO had not only inquired into assessee’s claim of depreciation but has also applied his mind to the facts and materials on record and completed the assessment after accepting assessee’s claim. He therefore submitted that the AO having already formed his opinion with regard to assessee’s claim of depreciation on GDS and interconnect TAS at the time of completion of original assessment, reassessment proceeding on the basis of very same material amounts to review of the earlier order passed on a mere change of opinion. To demonstrate the fact that the assessee’s claim of
7 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) depreciation on GDS was enquired into and examined by the AO during the original assessment proceeding be referred to letter dated 19.11.03 filed before the AO in course of the original assessment proceeding. He submitted, after considering the assessee’s submissions/reply with regard to claim of depreciation on GDS system the AO accepted the same. As far as claim of depreciation on interconnect TAS which were claimed on the basis of additions made to fixed assets during the relevant previous year Ld. Sr. Counsel referring to the statement of depreciation forming part of the tax audit report submitted, all informations relating to claim of deprecation on interconnect TAS is submitted in the tax audit report. He submitted, tax audit report submitted in compliance to the provisions of section 44AB is a statutory document, hence, cannot be considered to be an ordinary piece evidence. He submitted, tax audit report constitutes a valid piece of evidence and cannot be ignored. Ld. Sr. Counsel submitted, as assessee’s claim of depreciation is fully disclosed in the tax audit report which was available before the AO at the time of completion of original assessment and the AO has accepted assessee’s claim after examining such a statutory document, in absence of further tangible material or information coming to the possession of the AO after completion of the original assessment, the reopening of assessment on the very same material is nothing but a review of his own order on a mere change of opinion. In support of his contention that tax audit report submitted in compliance to section 44AB of the Act is in the nature of a statutory document and has certain sanctity and cannot be considered to be a ordinary piece of evidence which could not have been noticed by the AO with due diligence. Ld. Sr. Counsel relied upon the following decisions: 1. Ranbaxy Laboratories Ltd. vs. DCIT (351 ITR 23) 2. 31 Infotech Ltd. vs. CIT (329 ITR 257)
8 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) 10. The Ld. Sr. Counsel referring to the observations made by the AO in the original assessment order submitted, a reading of the assessment order would reveal that the AO has in detail examined assessee’s claim of depreciation on different items. Therefore, it cannot be said that the AO while completing the original assessment has not examined assessee’s claim of depreciation on GDS and interconnect TAS. In support of his contention Ld. Sr. Counsel relied upon a number of decisions of the Hon’ble Supreme Court as well as different High Courts including the Jurisdictional High Court.
The Ld. CIT D.R. Shri G.M. Doss on the other hand justifying the validity of reopening of assessment submitted, when the AO has not examined the issue relating to claim of depreciation on GDS and interconnect TAS and has not applied his mind to that issue it cannot be said that there is formation of opinion by the AO resulting in change of opinion, hence, reopening of assessment is invalid. The Ld. D.R. submitted, the assessee has not demonstrated that the AO during the original assessment proceeding has examined the issue relating to claim of deprecation on GDS and interconnect TAS. The Ld. D.R. submitted, in the questionnaire issued by the AO during the original assessment proceedings there is nothing to suggest that AO has specifically inquired into these two issues. Though, in the statement of depreciation forming part of tax audit report assessee has furnished information relating to claim of depreciation on interconnect TAS but there is no indication that the AO has either examined the issue or applied his mind relating to assessee’s claim of depreciation on it. As far as claim of depreciation on GDS is concerned, the Ld. D.R. submitted, the statement of deprecation in the tax audit report does not specifically refer to such asset. He submitted, even in the questionnaire the AO has not raised any issue relating to claim of depreciation on GDS. The Ld. D.R. submitted, therefore, there was no occasion for assessee to submit its reply dated 19.11.03 explaining its claim
9 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) of depreciation on GDS. He submitted, even accepting that the AO has called for information relating to claim of depreciation on GDS and in pursuance to which the assessee has submitted such information in letter dated 19.11.03, but, considering the fact that AO completed the assessment on 25.11.03, the time being too short it cannot be accepted that the AO has applied his mind to the submissions of the assessee. The Ld. D.R. submitted, if the AO while completing the assessment has ignored to examine certain facts and materials as result of which there is underassessment or escapement of assessment then the AO is empowered under the Act to reopen such assessment under section 147. In support of such contention the Ld. D.R. relied upon the following decisions:
Honda Siel Power Products Ltd. vs. DCIT (340 ITR 53) 2. Indian Hume Pipe Co. Ltd. (348 ITR 439) 3. ACIT vs. Manubhai Sons & Co. (18 SOT 297) 4. Export Credit Guarantee Corporation of India Ltd. vs. Addl. CIT (350 ITR 651)
The Ld. D.R. submitted, the assessee having not objected to the reopening of assessment before the AO and having participated in the reassessment proceeding he cannot challenge the reopening of assessment at the subsequent stage. For such proposition he relied upon the decision of ITAT in case of Sushil Kumar Jalan vs. ITO in ITA No.34/Gau/2011- order dated 03.02.2012.
In rejoinder, the Ld. Sr. Counsel submitted, the doubt expressed by the Ld. D.R. with regard to assessee’s reply dated 19.11.03 is unfounded as GDS is not the only issue in such reply was filed before the AO. The Ld. Sr. Counsel specifically referring to the reply dated 19.11.03 submitted, the assessee has also explained one more issue relating to lease rental from BKC property which was also examined by the AO in course of original assessment proceeding and assessee’s claim was rejected. He therefore submitted the
10 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) contention of the Ld. D.R. that there was no occasion to file such a reply before the AO is not relevant.
We have patiently heard the Ld. Counsels and carefully considered the submissions made by them on the basis of facts and materials on record and relevant case laws. The sum and substance of the argument from assessee’s side is the reopening of assessment is invalid as no new information/tangible material came to the possession of the AO after completion of original assessment to form a belief that income has escaped assessment or has been under assessed.
The second contention from the assessee’s side is, AO having examined all these materials and formed an opinion while accepting assessee’s claim of depreciation in the original assessment, the reopening on basis of very same material amounts to review of the earlier order passed on a mere change of opinion which is not permissible under law. For examining the validity/acceptability of the above said contentions of the assessee it is necessary to examine the facts on record to ascertain whether the AO in course of the original assessment proceeding has examined assessee’s claim of depreciation on GDS and interconnect TAS and whether subsequent to the completion of original assessment there is any fresh information/tangible material available with the AO to form a belief that assessee has claimed excess depreciation by treating the GDS and interconnect TAS as computer instead of plant & machinery thereby causing escapement of income or under assessment of income. As could be seen, the assessee along with the return of income filed has submitted a tax audit report from the statutory auditor in compliance to the provisions of section 44AB of the Act. Further, reference to the tax audit report reveals that in the statement of depreciation forming part of the tax audit report assessee has disclosed all informations relating to the depreciation claimed for the relevant assessment year. There is no dispute to
11 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) the fact that in course of original assessment proceeding along with the return of income the above said tax audit report was available before the AO. Further a careful reading of the assessment order demonstrates that the AO has extensively referred to assessee’s claim of depreciation on different items of fixed assets. Therefore, it cannot be accepted that claim of depreciation on GDS and interconnect TAS would have escaped the attention of the AO as in the statement of depreciation the assessee has specifically mentioned the claim of depreciation under different heads. In addition to the information disclosed in the tax audit report, it is observed that in letter dated 19.11.03 assessee in response to query raised by the AO during the original assessment proceeding has specifically explained the justification of claim of depreciation at 60% on GDS by treating it as computer. The aforesaid facts would clearly suggest that in course of original assessment proceeding under section 143(3) of the Act the AO has examined not only assessee’s claim of depreciation on GDS and interconnect TAS but has accepted the claim after application of mind. Whether the acceptance of assessee’s claim by the AO is proper or improper is a different issue. But, facts remain the AO has examined the issue and completed the assessment. That being the case in absence of any fresh/tangible material coming to the possession of the AO, the reopening of assessment on the basis of very same material would amount to review of the earlier order passed on a mere change of opinion as the AO has already formed an opinion with regard to assessee’s claim of depreciation, whether rightly or wrongly.
Though a catena of decisions have been cited by Ld. Counsels, it is not necessary to deal with each one of them. Suffice to say, we would prefer to discuss the principles laid down in some of the judicial precedents placed before us. In case of Ranbaxy Laboratories Ltd. vs. DCIT (supra) the Hon’ble Delhi High Court referring to explanation 1 of section 147 observed that disclosure made by the assessee in a tax audit report is in the nature of
12 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) statutory disclosure hence cannot be considered to be a piece of evidence which was hidden in some books of account which the AO could have possibly with due diligence discovered. It was held that the tax audit report having placed before the AO along with the return which the AO was duty bound to go through before completing the assessment will not fall in the category of material as referred to in explanation 1 to section 147. The Hon’ble Bombay High Court in case of 3 I Infotech Ltd. vs. CIT (supra) after examining the true import of explanation 1 to section 147 and the legislative intent expressed similar view. The Hon’ble Supreme Court in much referred case of CIT vs. Kelvinator of India Ltd. 320 ITR 561 has in clear terms held that even after the amendment of section 147 of the Act by the Direct Tax Laws Amendment Act, 1987 it cannot be construed that the AO has been given a wider power to reopen the assessment by giving go bye to the two basic conditions for reopening the assessment viz. there must be tangible material in possession of AO indicating escapement of income and there must be a live link between such material and formation of belief. The Hon’ble Court held, unless a schematic interpretation is given to the words ‘reason to believe’ it will give arbitrary power to AO to reopen assessment on mere change of opinion. The Hon’ble Supreme Court thereafter proceeded to hold that unless there are tangible material coming to the possession of the AO to show that income has escaped assessment, the assessment cannot be reopened on a mere change of opinion. In case of Asian Paints 308 ITR 195 the Hon’ble Jurisdictional High Court held that when an assessment is completed under section 143(3) of the Act it is to be presumed that the AO has completed such assessment after taking into consideration all facts and materials on record. Therefore, on the very same set of facts and circumstances assessment cannot be reopened as it will amount to change of opinion. In contrast, the decisions cited by Ld. CIT DR are found to inapplicable to the present case. On perusal of these decisions it was seen that most of them are in the context of true and full disclosure of all
13 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) material facts by the assessee in terms of proviso to section 147, which is not an issue in the present appeal. Moreover, none of the decisions lay down the proposition that in absence of any tangible material assessment can be reopened on mere change of opinion. Be that as it may, on examination of facts and materials on record in the light of the principles laid down in the judicial precedents referred to above it is found that there is no fresh/tangible material in the possession of the AO while recording his reasons for reopening of the assessment. It is evident that action under section 147 has been initiated by revisiting/re-appreciating the very same materials on the basis of which original assessment under section 143(3) of the Act was completed. As the AO while completing the original assessment has examined these facts and materials and passed the assessment order after application of mind, the reopening of assessment on the very same set of facts and materials would tantamount to review of the assessment order passed earlier that too on a mere change of opinion which is not permissible under law. Accordingly, in our considered opinion issuance of notice under section 148 of the Act in the present case is invalid. As a natural consequence the assessment order passed in consequence thereof also has to be declared as invalid and accordingly is to be quashed. Before parting, we may make it clear that the decision rendered by us as above is purely in the context of validity of reopening of assessment under section 147 of the Act and cannot be considered to be a precedent for assessee’s claim of depreciation on GDS and interconnect TAS at the rate of 60% by treating them as a computer. That issue has to be decided according to its own merit in an appropriate case. As we have quashed the assessment order while considering the issue raised in the additional ground, the grounds raised on merits are of mere academic interest, hence there is no necessity to adjudicate them.
In the result, assessee’s appeal is allowed.
14 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.)
ITA No.3326/M/09 17. Department has raised the following grounds in its appeal: "1(a) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to treat the expenses on hardware at Rs.2,81,99,152/- and software expenses at Rs.5,64,70,898/- as expenses on computer in respect of TAS and allow depreciation at 60%.
(b) The Ld. CIT(A) further erred in directing the AO to grant depreciation on TAS for the full year of the eligible depreciation.
On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to delete the disallowance of depreciation of Rs. 18,12,35,478/- on GDS.
On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to delete the interest levied u/s.234D of Rs.2,17,45,272/-.
The appellant craves leave to add to, amend or withdraw the aforesaid ground of appeal".
Before deciding the grounds of the Department it is necessary to briefly deal with the facts. As already stated herein before, assessment in case of the assessee was reopened under section 147 of the Act and ultimately completed under section 147 read with 143(3) vide order dated 10.11.06. After completion of the assessment as aforesaid the AO again reopened the assessment under section 147 of the Act for the second time by issuing a notice under section 148 of the Act beyond the period of four years from the end of relevant assessment year for the reason that depreciation on GDS and interconnect TAS has been wrongly allowed to the assessee for the entire year, whereas, the assessee is eligible at the rate of 50% of the amount claimed as asset was used for less than six months. The AO ultimately completed the assessment by restricting the claim of depreciation to the 50% of the amount claimed by holding that the asset was used for less than six months. Assessee challenged both the reassessment orders before the CIT(A) by preferring separate appeals.
15 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.)
The Ld. CIT(A) however disposed off both the appeals filed by assessee in a consolidated order passed by him, as referred to herein before. In the said order Ld. CIT(A) allowed partial relief to the assessee in respect of appeal preferred against the first reassessment order by allowing claim of depreciation at 60% on part of interconnect TAS. As far as appeal against second reassessment order is concerned, Ld. CIT(A) allowed assessee’s claim by holding that assessee has used the asset for more than six months, hence, eligible to claim full depreciation. Against the aforesaid order of the Ld. CIT(A) the Department is before us.
However, as could be seen from the grounds raised, they relate to relief granted by the Ld. CIT(A) in both the appeals filed by the assessee, though, the Department has filed a single appeal. As far as ground Nos.1(a) and 2 are concerned they relate to the relief granted by the Ld. CIT(A) against the first assessment order passed on reopening. As we have held the reopening of assessment to be invalid in that case and quashed the assessment order these grounds have become redundant and do not require to be adjudicated. As far as ground Nos.1(b) is concerned, on a perusal of the order passed by Ld. CIT(A) it is observed that after examining the relevant facts and materials on record he has given a categorical finding of fact that interconnect TAS was put to use in July 2000 hence the observation of the AO that it was used for less than six months is not proved on record. As the Ld. D.R. has not brought any material before us to controvert the above said finding of the Ld. CIT(A), we are unable to accept the plea of the Department. Accordingly, this ground is also dismissed.
In the result, Department’s appeal is dismissed. CO No.201/M/2012
16 ITA No.3417/M/2009, CO No.201/M/2012 & ITA No.3326/M/2009 M/s. Tata Communications Ltd. (formerly known as Videsh Sanchar Nigam Ltd.) 22. As far as CO No.201/M/2012 is concerned, the assessee has challenged the maintainability of the appeal of the Department as well as the validity of assessment under section 148 beyond four years by raising various technical/legal objections. However, considering the fact that Department’s appeal has been dismissed the cross objection of the assessee has become infructuous. Accordingly, the same is dismissed.
To sum up, assessee’s appeal in ITA No.3417/M/2009 is allowed, Department’s appeal in ITA No.3326/M/2009 and cross objection of assessee in CO No.201/M/2012 are dismissed.
Order pronounced in the open court on 29.01.2016.
Sd/- Sd/- (Ramit Kochar) (Saktijit Dey) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 29.01.2016. * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [ By Order
Dy/Asstt. Registrar, ITAT, Mumbai.