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Income Tax Appellate Tribunal, KOLKATA BENCH ‘C’, KOLKATA
Before: Shri M. Balaganesh, A.M. & Shri S.S.Viswanethra Ravi, J.M.)
ORDER Per Shri S.S.Viswanethra Ravi, J.M. This is an appeal preferred by the assessee against the order dated 21.03.2013 passed by the CIT(Appeals)-XIX, Kolkata in Appeal No.41/CIT(A)-XIX/Wd-33(3)/Kol/12-13 for the assessment year 2006- 07 framed under section 143(3)/147 of the I.T.Act.
The assessee filed this appeal on 13.06.2013. The assessee originally raised two effective grounds, i.e., (i) the ld. CIT(A) was not justified in confirming the disallowance made by the AO and (ii) the ld. CIT(A) erred in holding that the rate of depreciation of furniture / buildings on hoardings and the rate of depreciation of private vehicles be allowed on mobile hoarding van on hire.
2.1 Thereafter the assessee preferred additional ground before this Tribunal on 16.04.2015 which was admitted by this Tribunal and later Atul Kumar Dalmia Assessment Year: 2006-07 the assessee filed revised additional ground on 28.09.2015, which is also admitted as it goes to the root of the matter and does not require any verification of facts thereon. The same is reproduced as under: “1) That reopening of assessment is bad in law since it is based on a mere change of opinion and not based on any fresh tangible materials.”
2.2 Therefore, the only consideration before us is whether the AO reopened the assessment is justified or not. For better appreciation and understanding, brief facts of the case are as under: a) That the assessee originally filed its return on 29.10.2006 and the assessment was completed on 31.12.2008. Again on 28.03.2011, a notice under section 148 is issued for the reason that the depreciation rates were incorrectly adopted, which resulted in excess claim of depreciation to an extent of Rs.1,41,305/-. b) That the assessee is an individual carrying on the business of providing advertisement services and publicity services and consultancy under the name and style as ADIDEAS. c) That the assessee claimed depreciation of Rs.1,74,900/- on mobile hoarding van at 30% at Rs.5,83,000/- but however in the reassessment the AO took a view that as per the Act, al allowable depreciation is at 15% but not 30%. Therefore, the AO added Rs.1,74,900/- to the income of the assessee. d) Regarding depreciation on hoarding, the AO applied 10% against 15% as claimed by the assessee. Therefore, he added Rs.53,855/- being excess against Rs.1,61,562/-.
Atul Kumar Dalmia Assessment Year: 2006-07
Against which the assessee preferred an appeal before the ld. CIT(A) who found that the assessee is the owner of mobile hoarding van. In view of the audit report under section 44AB, confirmed the addition made by the AO, finding the depreciation at 30% is not allowable to the own assets but it is only available to the hired assets against which the assessee is before us with this appeal.
The ld. Counsel for the assessee contended that the reopening of assessment is erroneous and bad in law and not in accordance with the settled principles of law. Further, the ld. Counsel contended that the assessee disclosed every material fact before the AO during original assessment on the relevant claims. The AO, only on the mere change of opinion, issued a notice under section 148 but nothing was before him to reopen the assessment. The ld. DR contended that in spite of knowing fully that the assessee is eligible for depreciation @15% and intentionally adopted at 30% depreciation on mobile hoarding van and 15% depreciation on hoardings against 10%. Thereby, the AO originally issued a notice for reassessment which was confirmed by the ld. CIT(A), while considering all the material facts before him. In reply, the ld. Counsel for the assessee submitted that his case is squarely covered by the case of CIT-vs- Kelvinator of India 320 ITR 561(SC). The ld. Counsel has also submitted various Tribunal’s decision which followed the said decision of the Hon’ble Supreme Court stated supra including the Hon’ble Jurisdictional High Court at Kolkata reported in 344 ITR 187 (Cal) in the case of Amrit Feeds Ltd. –vs- ACIT.
It is true that after 1st April, 1989, the AO has power to reopen 5. provided there is any tangible material to come to the conclusion that Atul Kumar Dalmia Assessment Year: 2006-07 there is escapement of income from assessment. The Tribunal in Mumbai “I” bench in for the assessment year 2002-03 while following the Hon’ble Supreme Court judgment (supra) held as under: “5.1 It is apparent that a detailed disclosure was made by the assessee in relation to the claim of expenditure. Reopening the assessment on the very same set of facts which were very much available at the time of the original assessment proceedings is nothing but a change of opinion. In our considered opinion one needs to give a schematic interpretation of the words" reason to believe" failing which, section 147 would give arbitrary powers to the AO to reopen the assessment on the basis of "mere change of opinion", which cannot be per se reason to reopen. There is conceptual difference between power to review and power to reassess. The AO has no power to review, he has the power to re-assess. But assessment has to be based on fulfillment of certain conditions and if the concept of "change of opinion" is removed, then, in the garb of reopening of assessment, review would take place. Hon'ble Supreme Court in the case of CIT vs.Kelvinator of India India, 320 ITR 561 has held that the Aa must have some tangible material for reopening the assessment.”
In the present case, we are of the view that the AO reopened the assessment after having accepted the contention of the assessee that higher rate of depreciation is allowable. Again reopening the assessment on same set of facts is not justified. The assessee also filed the statement claiming depreciation along with the return and basing on which the depreciation was allowed in the original assessment. It could not be said that the AO did not apply his mind and there was non- disclosure of facts by the assessee. The AO completed the assessment proceedings in the year 2008 and again a notice under section 148 was issued in the year 2011, wherein he did not find anything new material against the assessee to reopen the assessment but he only basing on the Atul Kumar Dalmia Assessment Year: 2006-07 facts of the original assessment, he issued the said notice for reassessment and passed the reassessment changing only the rates of depreciation available to the said claims. Therefore, we are of the view that in this present case the AO on mere change of opinion only issued the said notice much less for any tangible material found during these three years. By respectfully following the ratio or principle laid down by the Hon’ble Supreme Court stated supra, we are of the view that no tangible materials are found by the AO to reopen the assessment for A.Y. 2006-07, which was originally concluded in the year 2008 and we find no justification in reopening the assessment. Accordingly, the revised additional ground raised by the assessee is allowed. Since the reassessment is quashed on assumption of jurisdiction, we refrain to go into the merits of the issue and other grounds.
In the result, the appeal filed by the assessee is allowed. Order Pronounced in the Open Court on 10th December, 2015. Sd/- Sd/- (M. Balaganesh) (S.S.Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:10/12/2015 Talukdar/Sr.PS Copy of order forwarded to: 1 Atul Kumar Dalmia, 19A, J.L. Nehru Road, 2nd floor, Kolkata – 700 087 2 I.T.O., Ward-33(3), Kolkata 3 The CIT(A), 4 CIT, 5. D.R. 5 True Copy, By order,