Tax Appeals Partially Allowed for Specific Years

The Tribunal partly allowed the appeals for the years 2001-02 to 2004-05 and allowed the appeals for the years 2005-06 and 2006-07 for statistical purposes. The AO was directed to reconsider the depreciation claimed based on the respective returns filed under section 153A. The Tribunal clarified that assessments for non-abated years could only be changed based on search material, while abated years required consideration of both original and reassessed income.

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Issues involved:
- Assessment based on return filed under different sections
- Disallowance of excess depreciation claimed
- Denial of refund of taxes based on income disclosed in return

Analysis:

Issue 1: Assessment based on return filed under different sections
The appeals were filed against the orders of the Ld. CIT(A) confirming the assessment made by the Assessing Officer (AO) on the basis of the return filed under section 139 instead of the return filed under section 153A of the Income Tax Act, 1961. The Tribunal considered the argument that the assessment proceedings had not abated for the assessment years 2001-02 to 2004-05 as they were completed before the search date. The Tribunal held that for these years, the AO cannot disturb the income assessed in the original return unless based on material found during the search. However, for the abated years 2005-06 and 2006-07, the AO was directed to decide the depreciation allowable as per law based on the return filed under section 153A.

Issue 2: Disallowance of excess depreciation claimed
The dispute centered around the excess depreciation claimed by the assessee in the return filed under section 153A compared to the return filed under section 139(1). The Tribunal held that for the years where assessments had not abated, the AO could only make changes based on material found during the search. In the case of abated years, the assessment had to include both the original and reassessment based on search material. The Tribunal directed the AO to recompute the income for the years 2001-02 to 2004-05 by starting with the income declared in the return filed under section 153A and then adjusting for the excess depreciation claimed.

Issue 3: Denial of refund of taxes based on income disclosed in return
The Tribunal addressed the denial of the refund of taxes based on the income disclosed in the return filed under section 153A. It was argued that the AO should start the computation of income with the amount declared in the return filed under section 153A and then make adjustments for excess depreciation claimed. The Tribunal directed the AO to recompute the income for the abated years 2005-06 and 2006-07 based on the return filed under section 153A and determine the depreciation allowable as per law.

In conclusion, the Tribunal partly allowed the appeals for the years 2001-02 to 2004-05 and allowed the appeals for the years 2005-06 and 2006-07 for statistical purposes, directing the AO to reconsider the depreciation claimed based on the respective returns filed under section 153A.

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