Reopening barred by change of opinion; higher depreciation allowed on leased vehicles used in hire business.

Reassessment under Section 147(a) was invalid where the original assessment had been completed under Section 143(3), depreciation had been allowed in earlier and later years, and no new material came before the Assessing Officer; the reopening amounted to a mere change of opinion and failed. The assessee was also entitled to depreciation at 40% on vehicles leased to third parties, because the Court applied its earlier view that higher depreciation is available for leased vehicles used in the business of running them on hire, including use through third parties. The Tribunal's view was upheld and the Revenue's appeal failed.

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Issues: (i) Whether reassessment proceedings under Section 147(a) of the Income-tax Act, 1961 were validly initiated; (ii) whether the assessee was entitled to depreciation at 40% on vehicles leased out to third parties.

Issue (i): Whether reassessment proceedings under Section 147(a) of the Income-tax Act, 1961 were validly initiated.

Analysis: The record showed that depreciation had been allowed in earlier and subsequent years, and the original assessment for the year in question was completed under Section 143(3) of the Income-tax Act, 1961. No new material or information had come to the notice of the Assessing Officer to justify the belief that income had escaped assessment.

Conclusion: Reassessment was not validly initiated; the action was barred as a mere change of opinion.

Issue (ii): Whether the assessee was entitled to depreciation at 40% on vehicles leased out to third parties.

Analysis: The Court followed its earlier view that an assessee is entitled to higher depreciation on leased vehicles used in the business of running them on hire, including where such use is by third parties.

Conclusion: The assessee was entitled to depreciation at 40% on the leased vehicles.

Final Conclusion: The Tribunal's view was upheld and the Revenue's appeal failed in full.

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